Crown Communities, LLC v. Austin

Summary

The Massachusetts Supreme Judicial Court considered whether a signed petition constituted reasonable evidence that at least 51 percent of residents of a manufactured housing community approved a resident association’s exercise of a statutory right of first refusal. The court held that the petition qualified as reasonable evidence under G. L. c. 140, § 32R, but concluded that the association failed to obtain binding financing within the statute’s 90-day deadline. The court therefore reversed the portion of the Superior Court judgment holding that the association validly exercised the right of first refusal.

Holdings

1. Crown had standing to seek a declaration concerning whether the association validly exercised the statutory right of first refusal because the declaration would immediately and significantly affect Crown's contractual right to purchase the property.
2. The statutory requirement to submit reasonable evidence that at least fifty-one percent of occupied homes support the association's purchase may be satisfied by a document signed by eligible resident tenants, including a signed petition; affidavits or certifications are not categorically required.
3. The required support is measured among resident tenants and resident-occupied homes; subtenants and nonresident tenants are not included in the relevant support calculation.
4. The association did not forfeit its right of first refusal by failing to request sale information before the trust entered into the agreement with Crown because the trust had not timely notified residents of its intention to sell under § 32R (a).
5. The association's failure to obtain a binding commitment for necessary financing within ninety days after execution of the purchase and sale agreement terminated its statutory right of first refusal, and the lis pendens did not excuse noncompliance absent evidence that it actually prevented timely financing or that the association made good-faith efforts to obtain financing or an agreed extension.
6. The Superior Court properly rejected the association's tortious-interference and G. L. c. 93A counterclaims because the challenged conduct was not shown to involve improper motive or means, knowing falsity, or unscrupulous conduct.

Questions Presented

1. Whether Crown had standing to seek declaratory relief concerning the association's compliance with the statutory right-of-first-refusal requirements.
2. Whether a petition signed by resident tenants constitutes reasonable evidence of the support required by G. L. c. 140, § 32R (c).
3. Whether the statutory fifty-one-percent support requirement is calculated using resident tenants and resident-occupied homes rather than subtenants and nonresident tenants.
4. Whether the association's failure to request or receive timely notice under G. L. c. 140, § 32R (b), forfeited its right of first refusal.
5. Whether the association's failure to obtain a binding financing commitment within ninety days terminated its statutory right of first refusal, notwithstanding Crown's filing of a lis pendens.
6. Whether Crown's statements to residents and financial incentives supporting Crown's purchase constituted tortious interference or unfair or deceptive conduct under G. L. c. 93A, § 11.

Disposition

reversed