In the late 1970s and early 1980s a condominium boom hit Massachusetts. A new market for condos was created by a prosperous economy that attracted young professionals and first-time home buyers who needed a cheaper form of homeownership and sought entrance into the expensive real estate market. Apartments in Boston and its suburbs became vulnerable to condominium conversion. Thousands of rental units were converted to condominium ownership.2 In some communities the entire stock of rental housing was converted.
As condominiums continued to escalate in value, property owners converted their rentals to condominiums and absentee owners bought condos as investments. As a result, units previously affordable to lower-income residents were converted to condos and became unaffordable.3
In 1983, in response to the threat of displacement tenants faced as a result of condo conversion, the state legislature passed a law that adopted certain basic protections for tenants. The law also allowed communities to adopt greater or different protections.4
Then, in the early 1990s, the condo market sagged and there was a glut of newly converted condos. While at first condos provided affordable shelter to young families, many owners became dissatisfied with the cumbersome rules and regulations, as well as with the lack of freedom to make repairs or alterations without condominium association approval. At the same time, absentee owners of many condominiums saw their investments fail, causing them to ignore or abandon their responsibilities as owners. More and more condominiums fell into disrepair. In response, the state legislature adopted more laws to protect tenants and responsible condominium owners.
In the mid-1990s came the abolition of rent and eviction controls, coupled with a real estate boom. Market forces dramatically raised rent levels for tenants, and the purchase of condominium units had become in many cases unrealistic even for middle-income tenants.
During the foreclosure crisis from 2006 until recently, there was a lot of uncertainty in the market. Some of the tenants facing displacement due to foreclosure were in units converted to condominiums, and some of these units were later reconverted. Some of the properties were not covered by condo conversion protections because they had 3 units or less.
Key Terms to Know
Under both state and local condo laws, the following words usually mean:5
2 . See report commissioned by the Boston Redevelopment Authority and authored by Patrick Dober, House of Cards: Absentee-Owned Condominiums and Neighborhood Instability (March 1991).
3 . The Legislature also prohibited condominium conversion in rental housing created as part of a G.L. c. 121A urban renewal development, through the life of the G.L. c. 121A agreement. See G.L. c. 121A, §18D. Moreover, while cooperative conversion is not banned in a G.L. c. 121A development, it is a fundamental change that would require approval of the urban renewal agency. See Bronstein v. Prudential Ins. Co. of America, 390 Mass. 701, 710-712 (1984); Gross v. Prudential Ins. Co. of America, 48 Mass. App. Ct. 115, 122 (1999), rev. denied, 430 Mass. 1114 (2000).
4 . By 1983, several communities had already adopted similar protections based on rent control or other enabling authority.
5 . On occasion, communities with local condo laws have used slightly different definitions for these terms. These are described in the discussion about such local laws.
6 . Chapter 527 of the Acts of 1983, Section 3 (approved November 30, 1983) (defining “low or moderate income,” “elderly,” and “handicapped”); G.L. c. 183A, §§2 and 8 (defining “master deed”). Note that in the state condo law, Chapter 527 of the Acts of 1983, Section 3 (approved November 30, 1983) defines the term “handicapped” as a person who is “physically handicapped” as defined in G.L. c. 22, §13A as of the date the notice is given. Persons who are not physically handicapped do not come within the statute’s protections, but may qualify for protection due to their low- or moderate-income status. Some local ordinances have extended the protections to persons with other disabilities.