Condominium Developer Authorization In Master Deed
In Levy v. Reardon, the master deed purported to reserve to the developer "the right to remove from the land subject to the Condominium the parcels." 43 Mass. App. Ct. 431, 432-433 n.5, 683 N.E.2d 713.
However, as noted by the Levy Court, once land is submitted to the provisions of the condominium statute any division of the common areas requires the consent of seventy-five percent of the unit owners and all affected lien holders. 43 Mass. App. Ct. at 438. See G. L. c. 183A, 5(c) and 19.
The infirmity in Levy is that the master deed purported to authorize the developer to take future action divesting the condominium association of its interest in portions of the common areas, without observing the requirements of the condominium statute.
Similarly, in Strauss, the master deed purported to authorize individual unit owners to expand their units into the common areas of the condominium and, thereby, to alter the allocation of percentage interests in the condominium common areas held by all unit owners. 417 Mass. at 443.
The Strauss Court observed that "a developer may retain a property interest by excluding it from the interest subjected to the condominium statute," but noted that "that is not, however, what the master deed does.
There is no reservation of a retained interest, nor is there a grant of such an interest to the trustees of the condominium trust."
The fundamental flaw in the interests retained in Levy is that they purported to authorize the developer to deal with the common land in a manner prohibited by the condominium statute.
It is questionable whether (even if recorded prior to the master deed) an instrument could validly authorize a developer simply to "remove" in the future portions of the common areas of a to-be-formed condominium; to be effective, a developer's right to acquire portions of the prospective common areas would likely need to be framed as an option to purchase or, perhaps, as a reversionary interest created by an exchange of deeds through a straw.
Similarly, it is unclear what (if any) form of instrument recorded prior to the master deed might validly have retained the rights declared invalid in Strauss.
In both Strauss and Levy, the fundamental problem was that the nature of the retained interest was repugnant to the condominium statute, and not merely that it was not created in an instrument recorded prior to the master deed.