Appeals Court: A House is Real Property, Unless It's Not

The Massachusetts Appeals Court has decided that two waterfront homes located on Essex’s secluded Conomo Point constitute real estate while two neighboring homes do not, with dramatic consequences for residents.  

Conomo Point and Its Residents

In 1826, the Town of Essex, looking for cheap property to house its poor, purchased the “old Proctor Farm,” a 130 acre parcel at the town’s easterly Conomo Point, for $4,600. The property, now considered one of the town’s most desirable, then held little value as it was unsuitable for shipbuilding or farming. Half a century later, visitors from surrounding towns and Boston  began flocking to the point during summer months, particularly after the development of a rail line into town. In 1875, the town began leasing lots at the point to individuals for use as summer residences; a practice that continues to this day.[1]

In 1962, Paul Touher leased a Conomo Point lot from the town for $75 a year and initially built a two-bedroom, one bathroom cabin. Mr. Touher, like his neighbors, paid real estate taxes on his cabin in addition to his annual town rent. In the ensuing decades, Conomo Point rose dramatically in value and the affordable leases became increasingly unfavorable to the town.

End of an Era

In 2011, the town sought to terminate its relationship with existing Conomo Point residents, apparently to seek rents that reflected the fair market value of the property. With the end of their lease terms nearing, a number of residents filed a complaint in the Superior Court seeking a determination that they owned the homes constructed on their lots as personal property that could be moved elsewhere. In other words, the residents sought to prevent the town from selling the homes along with the underlying real estate once the leases terminated.

By 2011, the Touhers and their neighbors, the Wendells, owned homes that could no longer be characterized as small cottages. As the Appeals Court describes, the Touhers’ home had doubled in size, was built upon concrete walls, and possessed a large concrete fireplace and concrete patio which had been built into the bedrock below. The Wendells’ home was an “impressive” three story house likewise anchored into the bedrock. The Appeals Court characterized the homes of other neighbors joining in the lawsuit simply as “cottages.”

Personal vs. Real Property

The Superior Court first found that the leases between the town and the residents did not govern the residents’ rights to the homes. The leases were, in fact, totally silent on this issue. The Superior Court therefore turned to the law of “fixtures,” which provides that where an object has “been so affixed that its identity is lost, or so annexed that it cannot be removed without material injury to the real estate or to itself,” that object becomes part of the real estate. The Superior Court held that the “cottages” could be easily removed and were therefore the personal property of their owners. In contrast, the Touher and Wendell homes, affixed as they were to the bedrock, had become fixtures of the real property and therefore belonged to the town.

In Touher v. Town of Essex, an appeal by the Touhers and Wendells, the Appeals Court affirmed the judgment of the Superior Court, reasoning that neither home could be removed without causing substantial damage to both the home and the underlying land. Moreover, while the Appeals Court did express some sympathy for the Touhers and Wendells, it found that they had built their homes “with eyes wide open” knowing full well they did not own the land.

In hindsight, it is easy to see that the Touhers and Wendells could have avoided this seemingly harsh result by simple written agreement with the town, a point expressed by the Appeals Court in a footnote. As lawyers frequently find themselves advising their clients: always put it in writing, no matter how much the parties believe they understand one another. 

[1] This paragraph relies on information from The Conomo Point Planning Committee, A History of Conomo Point, (viewed August 25, 2015).

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