Kinchla v. Rent Control Bd. of Brookline

• Decision Date: 20 April 1988
• Docket Number: No. 87-359,87-359
• Citation: 25 Mass.App.Ct. 656,521 N.E.2d 1032
• Parties: Joanne M. KINCHLA et al., 1 trustees, v. RENT CONTROL BOARD OF BROOKLINE.
• Court: Appeals Court of Massachusetts

Page 1032

521 N.E.2d 1032

25 Mass.App.Ct. 656

Joanne M. KINCHLA et al., ¹ trustees, v. RENT CONTROL BOARD OF BROOKLINE.

No. 87-359.

Appeals Court of Massachusetts Norfolk.

Argued March 8, 1988.

Decided April 20, 1988.

Stephen A. Greenbaum, Boston, for plaintiffs.

David William Adams, Brookline, for defendant.

Before GREANEY, C.J., and PERRETTA and SMITH, JJ.

GREANEY, Chief Justice.

The plaintiffs filed an application with the Brookline rent control board (board) for a certificate of exemption pursuant to § 3(b)(5) of the rent and eviction control by-law, art. XXXVIII of the by-laws of the town of Brookline (by-law), for the three-family house owned by them at 31 Perry Street. ² The exemption was sought on the basis that one of the dwelling units in the house was occupied by an owner, Joanne M. Kinchla. A hearing examiner held an adjudicatory hearing. The examiner recommended that the exemption be denied because the plaintiffs had failed to establish that Kinchla was a "beneficial owner of th[e] property." After reviewing the evidence before the examiner, the board entered a decision denying the application. A judge of the Brookline District Court reviewed the administrative record and entered a judgment upholding the board's decision. A report to the Appellate Division was dismissed.

The following is the pertinent background. The three-family house at 31 Perry Street was conveyed on June 5, 1984, to the plaintiffs as tenants in common. The plaintiffs financed the purchase by means of a first mortgage given to a bank and a second mortgage to the sellers. On September 19, 1984, the plaintiffs conveyed title to the property to themselves as the cotrustees of the 31 Perry Street Trust. The trust instrument indicates that the plaintiffs were also the sole beneficiaries, each holding a fifty-percent beneficial interest.

Kinchla moved into the third-floor dwelling unit in July, 1984, and, at least as of the date of the board's decision, she continued to reside there. The plaintiff Michael Lebner is not an occupant of the house. Lebner is in the business of owning and managing property. In addition to 31 Perry Street, he has an ownership interest in 7-9 Kendall Street, Brookline, a three-family house, and in 206 Aspinwall Avenue, Brookline, a two-family house. Lebner also claims to have a "partner" involved with him in the Kendall Street and Aspinwall Avenue houses, each of whom also had applied under the by-law for a certificate of exemption for the house in which the partner lived based upon the assertion that it was owner-occupied.

At the hearing before the board, the plaintiffs asserted that they had a financial arrangement in 31 Perry Street which called for them to share equally all contributions, profits and losses. No agreement was produced to show that the arrangement had been memorialized in writing. Kinchla testified that she had contributed fifty percent of the down payment towards the purchase price of the property; yet she could not recall the exact amount of the total down payment. She did not produce any cancelled checks or other documents showing the amount of her alleged contribution. Kinchla also claimed that she made mortgage payments, but, as of the date of the hearing, she was able to produce only one cancelled check made payable to the first mortgagee. That check was dated twelve days after the plaintiffs had filed their application for a certificate of exemption. No payments were shown to have been made by Kinchla to the second mortgagee. No other proof of payment was introduced in evidence to establish that Kinchla was sharing equally in the expenses of operating the property. Although the hearing examiner left the proceedings open to receive a copy of the deed by which the plaintiffs took title to the property, the plaintiffs did not request the opportunity to submit additional documentation to support Kinchla's claim of ownership.

Brookline has declined to adopt legislation setting forth a rigid test for determining whether two-family or three-family houses otherwise subject to rent control are occupied by a person who is an owner. When an exemption is sought under the by-law, the board's approach is to consider record title as evidence of ownership but not to deem the state of the title decisive in every case. As a general rule, this approach is permissible. "It is suggested that there may be some administrative convenience in looking solely to record ownership, but that would seem to invite a nonoccupant landlord to evade rent control by transferring record ownership to a tenant who resides in the two or three family dwelling." Trovato v. Walsh, 363 Mass. 533, 536, 295 N.E.2d 899 (1973).

Where circumstances warrant, therefore, the board may go beyond external appearances and inquire whether the applicant seeking the exemption as an owner-occupant has shown a significant measure of control over the property. For example, the board may ask whether the applicant has demonstrated responsibility for the property's management, and its occupancy and rents, and whether the applicant, in fact, bears a demonstrable share of its financial burdens. In some cases, the applicant claiming ownership may be able to show a history of involvement with the property, financial or otherwise, which indicates that the applicant has been, and continues to be, a true owner. See, e.g., Trovato v. Walsh, supra; Dopazo v. Rent Control Bd. of Brookline, 25 Mass.App.Ct. 990, 522 N.E.2d 1 (1988). In other cases, the board may want to be reasonably satisfied not only that the applicant is either a legal or beneficial owner but also...