On Dec. 14, the Supreme Judicial Court, issued its decision in Terrence Marengi & others vs. 6 Forest Road, LLC & others. The court ruled, in line with an amicus brief submitted on behalf of several real estate groups, that a new law to prevent frivolous, anti-development lawsuits applied to affordable housing developments. The case was an important win for the Massachusetts Association of Realtors and housing development statewide. 

In 1969, the state legislature enacted Chapter 40B, also known as the Comprehensive Permit Law. The law has been one of the most successful creators of housing in the state ever since. It enables local Zoning Boards of Appeals to approve housing developments under flexible rules if at least 20 percent to 25 percent of the units are affordable. The streamlined zoning board approval process creates a so-called comprehensive permit because it includes all necessary local approvals rather than the board handling each decision related to the project separately. 

In 2014, the Massachusetts Association of Realtors began advocating for statutory language requiring plaintiffs appealing zoning board decisions to post a bond. The goal of the law was to deter frivolous appeals and help offset financial burdens these appeals presented for housing developers.  

In early 2021, this bond requirement was included in the state’s 2020 economic development bill along with better known sections, Housing Choice (decreasing local smart growth zoning vote thresholds from super- to simple-majority) and MBTA Communities (requiring by-right multifamily zoning near MBTA transit stations). The new law states that courts have discretion to require that plaintiffs post a bond when appealing a decision to approve “a special permit, variance or site plan.” 

Salisbury Suit Over Condo Project 

The lawsuit at issue originated when the Salisbury Zoning Board of Appeals decided to issue a comprehensive permit under Chapter 40B to developer 6 Forest Road LLC for a 56-unit condominium development. A group of abutters and nearby homeowners filed suit in September 2021.  

The developer asked the court to require a $50,000 bond, permitted under the 2020 economic development law. The court granted the request in part, approving a $35,000 bond. The abutters appealed that decision, until it was taken up by the state’s highest court in order to interpret the new law. The basic argument centered on whether appealing a comprehensive permit under Chapter 40B fit within the new statutory language, “special permit variance or site plan.” 

An amicus, or “friend of the court” brief allows groups or individuals with a special interest in a case or special knowledge about the issues involved to advise the court. The Massachusetts Association of Realtors joined a brief with several other housing and real estate interest groups arguing that the bond requirement should apply to Chapter 40B comprehensive permit appeals.  

The brief, which was cited at oral argument, made two basic arguments. 

First, the “permits and approvals” granted under Chapter 40B are included in the language of the new law which applies to “special permit, variance, or site plan.”  

Second, historical context shows that the legislature intended to create language that would reduce frivolous appeals of affordable housing development, including Chapter 40B developments. 

Court Sets Bounds on Bonds 

The Supreme Judicial Court’s decision aligns with the aforementioned amicus brief, finding that the plain language of the new law strongly suggests, and legislative history confirms, that the new law does apply to Chapter 40B appeals.  

The court went on to add some additional bounds for the new requirement.  

First, they examined whether a finding of bad faith or malice was needed. Though not explicitly stated in the new statute, when read in context with existing law (see: M.G.L. Ch. 40A, section 17), they concluded that a court must find that the appeal is meritless or in bad faith in order to require a bond. The court found that this requirement was also in line with the purpose of the new law, to stop frivolous appeals without chilling meritorious ones.  

Second, the justices discussed expenses covered by the bond. They reasoned that expenses included nontaxable litigation costs like those recoverable under Chapter 93A. This would cover the cost of experts, but not attorney’s fees, carrying costs or other delay damages. Their reasoning included a practical examination of costs that made sense under the $50,000 bond limit as well as the absence of specific language requiring coverage of certain expenses such as “attorney’s fees.” 

As a result of these additional requirements, the court sent the case back down to the Superior Court, requesting that the judge address a potential finding of bad faith and justification for the $35,000 bond within the covered bond expenses as laid out by the Supreme Judicial Court. 

In sum, this decision was a significant win for the commonwealth and will help limit frivolous appeals on affordable housing developments. 

David McCarthy is the 2023 president of the Massachusetts Association of Realtors and a Realtor representing Keller Williams in the Back Bay, Beacon Hill and South End neighborhoods of Boston, and in Brookline, Framingham and Newton.