A Massachusetts law, Mass. Gen. L. c. 61A, permits land used for agriculture or horticulture to be valued at that use rather than its highest and best use, resulting in a lower tax rate. Parallel provisions apply to forest, open space, and recreational land. When that land is converted to residential or commercial use, the municipality has an option to purchase the land at full and fair market value. If the change in use is in connection with a proposed sale, the municipality has a right of first refusal to meet a bona fide offer to purchase the land. The statute provides that the municipality’s 120-day option period commences when the owner gives notice of intent to convert. This case arose out of the Town of Sudbury’s attempt to exercise these rights. The 70 acres in question had been used, classified, and taxed as agricultural land for a number of years. In July, 1999 the owner sold the property to defendant Scott for $1.3 million. At the sale Scott signed an agreement verifying that he was purchasing the land for agricultural uses, and filed an affidavit to that effect with the Board of Assessors of Sudbury. In November, 1999 Brendon Homes made an offer to Scott purchase 24 acres for $3 million. Scott and Brendon Homes signed a purchase and sale agreement in late November, and Scott gave notice to the Town of Sudbury of his intention to sell that parcel for residential use, as required by statute. The Town gave notice that it intended to exercise its first refusal option to meet the bona fide offer. However, the Town instead offered to purchase the entire property for $1.3 million, the price at which Scott had purchased it. The Town maintained that the parties had formed an intent to convert the property to residential use when the owner sold the land to Scott. Scott rejected the offer as untimely and non-responsive, and the Town sued. The Land Court found in favor of Scott. However, the Land Court rejected the argument that signing a purchase and sale agreement and giving notice triggered the Town’s option period. Rather, the Land Court made a fact-specific inquiry into the pre-purchase due diligence actions of the parties to determine their intent.
The Town appealed, the SJC accepted direct appellate review, and NELF filed an amicus brief in support of Brendon Homes. NELF argued that the Land Court reached the right result with the wrong rationale. NELF urged the SJC to adopt the certain and predictable rule that a landowner’s duty to notify a municipality of his intent to sell for residential or commercial use is triggered when he signs a purchase and sale agreement, in order to provide a fixed date from which the city or town’s 120-day exercise period could be counted and to provide a date certain for the end of the option period. NELF argued that the Land Court’s inquiry into state of mind is unworkable as a practical matter and invites litigation.
A deeply divided SJC ruled on May 1, 2003 in favor of the Town, holding that it was error to grant summary judgment for Scott when there was a material issue of fact regarding Scott’s intent when he purchased the 75-acre parcel. The majority reasoned away the plain language of the statute, which refers to an “intent to sell” and places the notice obligation on the seller, not the buyer. In a vigorous dissent in which Justices Marshall and Sosman concurred, Justice Cordy argued that the majority opinion was at odds with the statutory language and “will cast a troubling shadow overt the sale of agricultural land.”