Rauseo v. Board of Assessors of Boston , 94 Mass. App. Ct. 517 ( 2018 )

NOTICE: All slip opinions and orders are subject to formal
revision and are superseded by the advance sheets and bound
volumes of the Official Reports. If you find a typographical
error or other formal error, please notify the Reporter of
Decisions, Supreme Judicial Court, John Adams Courthouse, 1
Pemberton Square, Suite 2500, Boston, MA, 02108-1750; (617) 557-
1030; SJCReporter@sjc.state.ma.us
18-P-288 Appeals Court
MICHAEL RAUSEO, trustee,1 vs. BOARD OF ASSESSORS OF BOSTON.
No. 18-P-288.
Suffolk. October 11, 2018. - November 26, 2018.
Present: Green, C.J., Hanlon, & Maldonado, JJ.
Taxation, Appellate Tax Board: appeal to Appeals Court.
Condominiums, Master deed, Parking, Common area.
Appeal from a decision of the Appellate Tax Board.
Douglas M. Kiernan for the taxpayer.
Adam Cederbaum, Assistant Corporation Counsel.
Peter Antell, for Karen Gacicia & another, amici curiae,
was present but did not argue.
GREEN, C.J. This appeal presents the question whether
parking easements reserved by a condominium developer in the
documents establishing the condominium, freely alienable and not
appurtenant to any condominium unit, are (as the defendant board
of assessors contends) subject to taxation as real property, or
(as the plaintiff contends) ineligible for such taxation under
1 Of the Broad/Franklin Development Trust.
2
G. L. c. 183A, § 14, because they are already taxed as part of
the condominium common areas. The Appellate Tax Board agreed
with the defendant, affirmed the denial of the plaintiff's
applications for abatement, and the plaintiff appealed. We
affirm.
Background. By condominium master deed dated February 15,
2006, and duly recorded with the Suffolk County registry of
deeds, certain land and buildings located at 80 Broad Street in
Boston were submitted to the provisions of G. L. c. 183A to form
the Folio Boston Condominium (condominium). The condominium
contains ninety-nine units, of which ninety-six are residential
and three are commercial. As required by G. L. c. 183A, § 8,
the master deed included, among other information, the unit
designation of each unit; a statement of each unit's location,
approximate area, and number of rooms, and the immediate common
area to which it has access; and a description of the common
areas and facilities and the proportionate interest of each unit
therein.
Section 4(c)(ii)(a) of the master deed describes the
"condominium parking area," including the "parking easements"
located therein. In particular, the declarant under the master
deed "reserves to itself and its successors and assigns and its
or their designees, the exclusive right and easement from time
to time to sell, convey, lease, rent or license easements for
3
each of the Parking Spaces (the 'Parking Easements;'
individually, a 'Parking Easement')." That section further
provides that the declarant may sell, lease, or otherwise convey
parking easements to unit owners or others, and that the parking
easements shall be easements in gross. Parking easement owners
also may convey any parking easement(s) they hold to unit owners
or to nonunit owners, entirely separate from any interest in a
condominium unit. The parking easements themselves are not
appurtenant to any unit in the condominium, and do not relate to
a designated parking space.2 The "condominium parking area" is
described as located within certain specified limited common
areas of the condominium. Section 4(c)(ii)(d) provides that, in
the event the condominium is removed from the provisions of
G. L. c. 183A, the parking easements will be deemed
extinguished, but that the owners of the parking easements will
be entitled to any insurance proceeds, eminent domain proceeds,
or other financial remuneration obtained upon termination of the
condominium and attributable to the parking easements. Parking
easement owners bear all risk of loss arising from their
easement interest, and they agree to indemnify, defend, and hold
the condominium unit owners association harmless against all
2 All parking in the condominium parking area is by valet,
and no owner or user of a parking space is allowed to retrieve a
vehicle from the parking area, except through the valet service.
4
claims arising therefrom. All expenses associated with the
parking easements are borne by parking easement owners and are
not charged to condominium unit owners as part of common area
expenses. Conversely, parking easement owners make no
contribution to common area expenses, other than those
attributable to the parking area.
By letter dated October 22, 2002, the Department of Revenue
issued a letter to the defendant, authorizing it to assess
separately from condominium units any easements in condominium
parking areas that are easements in gross and not appurtenant to
any condominium unit. The defendant thereafter apparently began
assessing such parking easements as separate property interests;
in the present case, at least, the defendant assessed and taxed
thirteen parking easements owned by the plaintiff, and the
plaintiff filed for abatements. The defendant denied the
plaintiff's applications for abatement, and the plaintiff
appealed to the Appellate Tax Board, which affirmed the denials.3
This appeal followed.
Discussion. Our role on review of a decision by the
Appellate Tax Board is well settled: "[w]e will not modify or
3 In its abatement applications and in its appeal, the
plaintiff challenged only the defendant's treatment of the
parking easements as taxable interests separate from the
condominium common areas, and not the valuations of those
easements.
5
reverse a decision of the board if the decision is based on both
substantial evidence and a correct application of the law."
Boston Professional Hockey Ass'n, Inc. v. Commissioner of
Revenue, 443 Mass. 276, 285 (2005). "Although the proper
interpretation of a statute is for a court to determine, we
recognize the [tax] board's expertise in the administration of
tax statutes and give weight to the [tax] board's
interpretations." Adams v. Assessors of Westport, 76 Mass. App.
Ct. 180, 183 (2010), quoting Raytheon Co. v. Commissioner of
Revenue, 455 Mass. 334, 337 (2009). The facts in the present
case are undisputed, and we are solely concerned with the
question whether the Appellate Tax Board correctly interpreted
the law.
"We begin our discussion by recognizing that under common
law, a property owner has the right to impose limitations or
conditions on an estate that is conveyed to another . . . ."
Queler v. Skowron, 438 Mass. 304, 310 (2002). "A condominium is
created by a 'declarant' who records a master deed that
'submits' land to the provisions of G. L. c. 183A." Id. at 311.
In imposing conditions or limitations on property submitted to
G. L. c. 183A, "there is nothing in § 5 (c) [of that chapter]
that prohibits the declarant of a phased development from
retaining such an interest by operation of the master deed
itself." Id. at 313. See CBK Brook House I Ltd. Partnership v.
6
Berlin, 64 Mass. App. Ct. 913, 913-914 (2005). And the right to
impose limitations on the interests submitted to the condominium
form of ownership under the master deed is not limited to the
retention of the right to withdraw land from the condominium
ownership rather than proceed with the development of planned
phases; "[i]n Commercial Wharf E. Condominium Ass'n v.
Waterfront Parking Corp., [407 Mass. 123,] 128-130 [(1990), the
Supreme Judicial Court] . . . concluded that a developer
properly could retain an interest in land described in the
master deed, but by doing so, . . . 'its retention does not
constitute a division of the common area'" in violation of G. L.
c. 183A, § 5 (c). Queler, supra.
The retained interest at issue in Commercial Wharf E.
Condominium Ass'n, 407 Mass. at 125, was an easement for
parking, established by a "Declaration of Covenants and
Easements" recorded immediately prior to the recording of the
master deed establishing the condominium. Similarly, in CBK
Brook House I Ltd. Partnership, 64 Mass. App. Ct. at 913, the
condominium declarant retained an affirmative easement for
parking spaces located within a transient garage.4 In each case,
the court recognized the validity of the retained interests
4 The reservation of interest in CBK Brook House I Ltd.
Partnership was made by amendment to the master deed, recorded
before any units had been conveyed. See 64 Mass. App. Ct. at
913.
7
against a claim that the rights properly should be considered
part of the condominium common areas, so that their retention
constituted an impermissible division of the common areas in
violation of G. L. c. 183A, § 5 (c). See Commercial Wharf E.
Condominium Ass'n, supra at 129-130; CBK Brook House I Ltd.
Partnership, supra at 913-914.
Taken together, Commercial Wharf E. Condominium Ass'n,
Queler, and CBK Brook House I Ltd. Partnership make plain that
an easement in gross for parking, reserved by a condominium
declarant from the interests submitted under a master deed to
the condominium form of ownership pursuant to G. L. c. 183A, is
not a part of the condominium common areas. It follows that
such an easement is subject to taxation as an interest separate
from the units in the condominium.5
5 That the easement is a nonpossessory interest does not
derogate from its status as a present interest in real property.
See, e.g., Davisson v. Commissioner of Revenue, 18 Mass. App.
Ct. 748, 752 (1984). Neither party has raised any question
whether an easement may be taxed as a separate interest,
directly to the easement holder, rather than as an element of
the value of the land comprising the servient estate burdened by
the easement. We accordingly do not consider the question,
other than to observe that it would make little practical
difference in the present case inasmuch as the master deed
provides that any taxes on the value of the parking easements
imposed on the organization of unit owners would be passed
through to the parking easement holders. But see Hamilton Mfg.
Co. v. Lowell, 185 Mass. 114, 118 (1904) (easement for railway,
terminable upon occurrence of contingency, not taxable to
easement holder instead of fee owner). See generally Worcester
v. Boston, 179 Mass. 41, 48 (1901).
8
First Main St. Corp. v. Assessors of Acton, 49 Mass. App.
Ct. 25 (2000), on which the plaintiff relies, is not to the
contrary. In that case, we held that a reservation of
development rights by a condominium declarant did not constitute
a taxable present interest in real property, based in part on
the conclusion that the land subject to those development rights
was a part of the common areas of the condominium. Because the
land was part of the condominium common areas, it was taxed as
such, and as appurtenant to the condominium units, pursuant to
G. L. c. 183A, § 14. See First Main St. Corp., supra at 28-29.6
See also Spinnaker Island & Yacht Club Holding Trust v.
Assessors of Hull, 49 Mass. App. Ct. 20, 23 (2000). In the
present case, while the area within which the parking easements
are physically located is a part of the limited common areas of
the condominium, the easements themselves were reserved by the
declarant from the property interests submitted to the
provisions of G. L. c. 183A, are not appurtenant to any
condominium unit, are separately alienable as interests in real
property, and are not (and never were) part of the condominium
common areas.
Decisions of Appellate Tax
Board affirmed.
6 The court in First Main St. Corp. also observed that, in
any event, future development rights do not constitute a present
interest in real estate. 49 Mass. App. Ct. at 28.