Sterling Condo Association Sues Developer | Status of housing company is in question
Troubled developer Massachusetts Housing Opportunities Corp. is facing a lawsuit from the condominium association at a project that it helped build in Sterling.
The suit by the Chocksett Crossing Condominium Trust, demanding $115,004, is aimed primarily at an affiliate company, MHOC of Sterling.
It accuses the company, which, like MHOC, is based in North Andover and run by Gerard E. Welch, of failing to pay $106,000 in DEP-mandated charges for the continuing operations of an on-site sewage treatment facility, plus additional money in common area fees for a unit owned by the company and other charges.
“A large portion of those funds were not funded by the developing entity,” said Charlie Perkins, a senior partner with Perkins & Anctil, which is representing the condo association.
No Answer
The association originally filed suit in July and amended the complaint on Sept. 5 to include the charges related to the sewage treatment facility. Perkins said the condo association is now waiting for a response from MHOC of Sterling.
MHOC itself is named in the suit as a mortgage holder. The suit contends that the common area fees are entitled to priority over all mortgages.
The current status of both MHOC and MHOC of Sterling is unclear. Both companies had been classified as nonprofit entities under Massachusetts law, but last year the state Attorney General’s office complained about inconsistencies in their financial filings and accused them of wording their articles of incorporation to render them “mere shells that insiders’ for-profit business may pass through.”
According to Jill Butterworth, deputy press secretary for the Attorney General’s office, MHOC representatives told the agency’s public charities division last year that they intended to dissolve the nonprofit entities, which they considered inactive.
Phone numbers listed for MHOC and MHOC of Sterling are no longer active, and Welch did not return a message left with a lawyer representing him.
MHOC also appears not to be proceeding with three projects it had planned in Central Massachusetts. It sold off an apartment development it was planning in Lunenburg a few months ago. In Harvard, according to the town planning board office, the company received permits for two projects in town about a year ago but hasn’t moved forward with them. The Massachusetts Housing Finance Agency withdrew the offer of a $3.2 million loan for one of the Harvard projects after a window to close the loan expired, according to spokesman Tom Farmer. Farmer said the agency has been moving away from financing of that sort because of the downturn in the new housing market. He said it informed MHOC early last spring that it would not extend the loan.
“We’re basically out of that deal,” he said.
Meanwhile, another lawsuit over the Sterling condominiums is still crawling forward. In 2006, Welch and MHOC sued Vincent CampoBasso, a former partner in the development, accusing him of failing to provide money he had promised, giving bad legal advice and offering discounts on condos to his friends and family members. CampoBasso countersued, saying he had never been provided with good financial information about the project.
In May, both parties agreed to extend the discovery period for that suit through the end of September. A pre-trial conference is now scheduled to be held “on or after” Dec. 15.
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