Mary Ann Morse Healthcare Corp. v. Board of Assessors of the Town of Framingham(August 19, 2008)

COMMONWEALTH OF MASSACHUSETTS

APPELLATE TAX BOARD


MARY ANN MORSE 			BOARD OF ASSESSORS OF
HEALTHCARE CORP.   	 v.		THE TOWN OF FRAMINGHAM


Docket Nos. F281323, 			Promulgated:
		  F283633				August 19, 2008

 
These are appeals under the formal procedure pursuant to G.L. c. 59, § 64 and 65, from the refusal of the Board of Assessors of the Town of Framingham ("appellee" or "assessors") to abate taxes on certain real estate located in the Town of Framingham owned by and assessed to Mary Ann Morse Healthcare Co. ("appellant") under G.L. c. 59, § 38, for fiscal years 2005 and 2006 ("tax years at issue").
Commissioner Rose heard these appeals.  Commissioners Scharaffa and Egan joined him in decisions for the appellee.  
These findings of fact and report are made at the request of the appellant pursuant to G.L. c. 58A, § 13 and 831 CMR § 1.32.

George A. Balko, III, Esq., Donna M. Truex, Esq. and Joshua Lee Smith, Esq. for the appellant.

James F. Sullivan, Esq. for the appellee.


FINDINGS OF FACT AND REPORT
On the basis of the testimony and exhibits entered into evidence at the hearing of these appeals, the Appellate Tax Board ("Board") made the following findings of fact. 
The appellant is the sole owner of the property located at 747 Water Street, Framingham, ("subject property"), which it operates as an assisted-living facility.    
The appellant timely filed its Form 3ABC and Form PC for fiscal year 2005 with the assessors.  The assessors timely issued to the appellant a fiscal year 2005 tax bill, valuing the property at $7,196,100, upon which a tax of $84,842.02 was due.  The appellant timely paid this tax, without incurring interest.  On February 1, 2005, the appellant timely filed an abatement application with the assessors.  The assessors denied the abatement application on May 2, 2005.  The appellant timely filed an appeal with the Board on July 13, 2005.  Based on the foregoing, the Board found and ruled that it had jurisdiction over the fiscal year 2005 appeal. 
The appellant timely filed its Form 3ABC and Form PC for fiscal year 2006 with the assessors.  The assessors timely issued to the appellant a fiscal year 2006 tax bill, valuing the property at $11,671,300, upon which a tax of $132,352.54 was due.  The appellant timely paid this tax, without incurring interest.  The appellant timely filed an abatement application on January 30, 2006, which the assessors denied on March 27, 2006.  The appellant seasonably filed its appeal with the Board on May 11, 2006.  Based on the foregoing, the Board found that it had jurisdiction over the 2006 appeal.
The appellant is a Massachusetts non-profit entity organized under G.L. c. 180.  It is exempt from federal income taxes under Internal Revenue Code § 501(c)(3).  It has no shareholders or capital stock.  No part of its income inures to the benefit of anyone associated with the appellant, nor is its income used for anything other than the appellant's charitable purposes.  The appellant's Articles of Organization set forth its purposes as follows:
To establish, acquire, operate, and maintain nursing homes and long term care facilities within the Commonwealth of Massachusetts . . . and to provide such medical, educational, and charitable services as may be consistent with any license granted to the corporation by any governmental agency or as may be otherwise lawful.
To advance the knowledge and practice of medicine and nursing through research and education relating to the care, treatment, and healing of patients.
To improve public health in cooperation with federal, state, municipal, and other health departments and offices.

At all relevant times, the appellant operated an assisted-living facility at the subject property known as Heritage of Framingham ("Heritage").  Heritage consists of two buildings:  one ("Building A") which contains common areas and 48 assisted-living apartments, and one ("Building B") which contains 40 assisted-living apartments intended for use by individuals with Alzheimer's disease, dementia, and memory impairment ("Homestead" apartments).
The appellant claims that all parts of Heritage which are used by the Homestead residents are exempt from taxation under G.L. c. 59 § 5, Third as property owned by a charitable organization.  This portion comprises 71% of the subject property.  It includes all of Building B (containing 40 Homestead apartments) and 17,100 square feet of Building A, comprising Heritage's common areas, including kitchen, dining, recreational, administrative, and laundry facilities. 
Roger Peloquin, the President and CEO of the appellant, testified on behalf of the appellant.  He testified that admission to Heritage is available by submitting a preliminary application, along with a $1,200 "community fee."  Applicants are also required to submit to medical evaluations prior to execution of a Residency Agreement, and periodically through their stay at Heritage.  Mr. Peloquin explained that the purpose of these medical evaluations is to ensure that the residents do not have needs which exceed the level of services which the appellant provides.  
While an applicant is not required to produce evidence of finances at the time of application, the applicant must complete a "financial questionnaire," which includes questions about the applicant's income and assets and information about the cost of residency, and thus requires the applicant to represent an ability to pay monthly fees.  
At the time of the hearing, monthly fees for Homestead apartments started at $4,100 (per person, double occupancy), and reached $5,920 for a "suite."  Mr. Peloquin explained that these rates were at or near the market for similar facilities, and that Heritage had lost $3.8 million since it opened its doors in 1995.  He estimated that the average stay at Heritage is between 18 and 30 months.  According to these figures, an eighteen-month stay in the lowest-priced Homestead apartment, including the fee paid at application, would cost $75,000.  Neither Heritage's monthly fees nor additional fees are covered by Medicaid.
Upon passing the medical evaluation, paying the community fee, and completing the financial questionnaire, the applicant is offered an apartment.  A personal care plan is prepared for the resident.  The applicant and the appellant also enter into a "Residency Agreement" which outlines the rights and obligations of the parties.  Sections II.B and IX.D of the Residency Agreement provide that when a resident's medical condition deteriorates, the appellant reserves the right to terminate the Residency Agreement.  Section II.C requires medical evaluations at least annually, and at any time following a hospitalization or upon the appellant's "determination that there has been a significant change in Resident's ability to function within the Community."  
Pursuant to Section V.G of the Residency Agreement, the appellant reserves the right to enter an apartment without notice.  Mr. Peloquin testified that, for safety purposes, Homestead apartments lack door locks.  However, Section VI.B of the Residency Agreement provides that, except in cases of emergency and to carry out the services provided in contract, the appellant must give all residents 24-hours' notice before entering an apartment.  Moreover, pursuant to Section IX.D.3(D), all residents of Heritage have rights under the landlord/tenant laws established under G.L. c. 186 and G.L. c. 239, including the safeguard that any eviction for nonpayment or otherwise must be pursued through a court proceeding in accordance with landlord-tenant laws.  Furthermore, the Residency Agreement, at Section VIII, emphasizes that residents have a right to "[b]e treated with consideration and respect and with due recognition of personal dignity, individuality, and the need for privacy," which includes the right to private communications, the right to use and retain personal property and personal space, confidentiality of all records and communications, and the right to present grievances and recommendations to the appellant as well as to representatives of the Assisted Living Ombudsman program, the Elder Protective Services and the Disabled Persons Protection Commission established under Massachusetts law.
Section IV.C of the Residency Agreement requires residents to pay their last month's rent up front as a deposit, and they must increase the amount of this deposit to match any increase in monthly rental charges.  Section X.A states that residents are responsible for maintaining their own health insurance and apartment insurance.   
The Residency Agreement also outlines the services provided to residents.  These services include three meals a day, light weekly housekeeping, recreational programs, some utilities, transportation to doctor's appointments, and 45 minutes per day of "personal care services," which include assistance with toileting, dressing, and grooming.  Additional assistance is offered to residents of the Homestead apartments, including reminders and supervision for medications, activities, and recreational and socialization assistance.  Some services, like hairstyling, visits from a physician, and transportation via medical escort, are provided at additional cost.  The appellant is not a skilled nursing facility and is thus not equipped to provide triage or acute care services. 
Section IV.F of the Residency Agreement allows the appellant to demand that residents obtain a third-party guarantor if the resident has failed to pay a monthly fee.  Alternately, the same section allows the appellant to terminate the Residency Agreement for non-payment.  Mr. Peloquin testified that Heritage has never received an application from an individual whose financial questionnaire revealed insufficient assets to pay all applicable fees.  As a result, Heritage has never had the opportunity to turn away an applicant for insufficient financial resources.  Mr. Peloquin also testified that, notwithstanding Section IV.F of the Residency Agreement, he was unaware of any residents who were required to have a guarantor.  He explained that on only one occasion had a resident become unable to pay during his stay.  The appellant made arrangements for that resident to remain at Heritage until the resident became medically ineligible for residency. 
Mr. Peloquin testified that Heritage's residents come from a broad geographic area, which he attributes to the appellant's advertising efforts and its participation in state-wide and national civic and charitable organizations.  The appellant hosts BayPath Elder Services' annual meetings and is involved with the Massachusetts Alzheimer's Association through sponsorship of walks and concert fundraisers.  However, Mr. Peloquin also testified that 8 of the 40 Homestead apartments were empty and "mothballed" at the time of the hearing.  He explained that the vacancy was a result of low demand for the apartments.  On cross-examination, Mr. Peloquin responded that the appellant did not consider offering any apartments for reduced fees in order to increase interest, because it was the appellant's belief that Homestead's prices were in keeping with the average prices in the geographic area for similar assisted-living facilities. 
On the basis of the foregoing, and as will be explained further in the Opinion, the Board found that the appellant is not a charitable organization for purposes of the Massachusetts property tax exemption at G.L. c. 59, § 5, Third.  Homestead provides services only to a limited segment of the population, namely, those financially able to afford, or those able to secure a third-party guarantor to pay, the $4,100 to $5,920 monthly rent, plus the refundable $1,200 "community fee" and last-month's rent.  Medicaid payments are not accepted for the services provided by Homestead, so residents must maintain their own health insurance and/or pay for medical costs out-of-pocket.  Although Mr. Peloquin testified that Heritage does not require applicants to verify their financial assets prior to residency, his testimony also revealed that no individual without means to pay has ever filled out a preliminary application.  While Mr. Peloquin mentioned one resident who was not evicted when he became unable to afford his rent, the Board found that this one anecdotal example was insufficient evidence to meet the burden of proving that the appellant served a sufficiently broad segment of the elderly population.  Moreover, despite its vacancies, the appellant made no effort to market Homestead apartments to lower-income elders, and did not reduce its fees to fill vacant apartments.  
Elders of limited financial means are the ones who would most likely require government-provided care.  However, the elders living at Homestead are able to afford the fees, and are thus not the elders who would rely on government assistance to pay for their care.  The appellant thus failed to prove that, but for Homestead, the government would have been charged with the burden of caring for Homestead residents.  Accordingly, the Board found and ruled that the appellant failed to meet its burden of proving that Homestead lessened any burden of government.
Moreover, the Board found that while Heritage offers specialized services, its residents are nonetheless guaranteed full, legal tenancy.  The Board found that, beyond health circumstances that govern the level of care that residents require, residents enjoy a protected right to privacy, and a right to tenancy protected by statutory eviction proceedings.  The Board thus found that the individual Heritage residents rather than the appellant occupied the subject property.  
Therefore, for the reasons further explained in the Opinion, the Board found that the appellant did not qualify as a charitable corporation for purposes of G.L. c. 59, § 5, Third, and thus the subject property did not qualify for exemption under that statute. Accordingly, the Board entered decisions for the appellee. 

OPINION 	
General Laws c. 59 § 5, Third, ("Clause Third") provides an exemption for:
Real estate owned by or held in trust for a charitable organization and occupied by it or its officers for the purposes for which it is organized or by another charitable organization or organizations or its or their officers for the purposes of such other charitable organization or organizations.

A taxpayer claiming exemption under G. L. c. 59, § 5, Third thus must demonstrate that the property fulfills three requirements: 1) the property must be owned by a charitable organization; 2) the property must be occupied by a charitable organization; and 3) the property must be used in order to further a charitable purpose. See Jewish Geriatric Services, Inc. v. Longmeadow. Mass. ATB Findings of Fact and Reports 2002-337, 351, aff'd, 61 Mass. App. Ct. 73 (2004) (citing Assessors of Hamilton v. Iron Rail Fund of Girls Club of America, 367 Mass 301, 306 (1975)).  "Any doubt must operate against the one claiming an exemption, because the burden of proof is upon the one claiming an exemption from taxation to show clearly and unequivocally that he comes within the terms . . . ."  Boston Symphony Orchestra, Inc. v. Assessors of Boston, 294 Mass. 248, 257 (1936).  "It is well established that a party claiming exemption bears a grave burden of proving the claim."  Kings' Daughters and Sons Home v. Board of Assessors of Wrentham, Mass. ATB Findings of Fact and Reports 2002-427, 452 (citing Meadowbrooke Daycare Center, Inc. v. Assessors of Lowell, 374 Mass. 509, 513 (1978)).  

The appellant does not operate as a public charity for purposes of G.L. c. 59, § 5, Third.

 "The provision of healthcare has been recognized as a traditional charitable purpose, see Harvard Community Health Plan v. Assessors of Cambridge,  384 Mass. 536, 543 (1981), as has the provision of nursing home care for the elderly, see H-C Health Services, Inc. v. South Hadley, [42 Mass. App. Ct. 596, 599 (1997)]."  Western Massachusetts Lifecare Corp. v. Assessors of Springfield, 434 Mass. 96, 103 (2001).  However, espousing a recognized charitable purpose does not, in itself, mean that an organization operates as a public charity.  See, American Inst. For Economic Research v. Assessors of Great Barrington, 324 Mass. 509, 513 (1949).  The organization "must prove that it is in fact so conducted that in actual operation it is a public charity."  Jacob's Pillow Dance Festival, Inc. v. Assessors of Becket, 320 Mass. 311, 313 (1946).  
The test for determining whether an organization is operating as a public charity is two-fold.  First, "the persons who are to benefit must be 'of a sufficiently large or indefinite class so that the community is benefited by its operations.'"  Western Massachusetts Lifecare, 434 Mass. at 103-4 (quoting Harvard Community Health Plan, 384 Mass. at 543).  "An organization 'operated primarily for the benefit of a limited class of persons,' such that 'the public at large benefits only incidentally from [its] activities,' is not charitable."  Western Massachusetts Lifecare, 434 Mass. at 104 (quoting Cummington School of the Arts, Inc. v. Assessors of Cummington, 373 Mass. 597, 600 (1977)).  "While there is no 'precise number' of persons who must be served in order for an organization to claim charitable status, and 'at any given moment an organization may serve only a relatively small number of persons,' membership in the class served must be 'fluid' and must be 'drawn from a large segment of society or all walks of life.'"  Western Massachusetts Lifecare, 434 Mass. at 104 (quoting New England Legal Foundation v. Assessors of Boston, 423 Mass. 602, 612 (1996)).  "[S]election requirements, financial or otherwise, that limit the potential beneficiaries of a purported charity will defeat the claim for exemption."  Western Massachusetts Lifecare, 434 Mass. at 104.
The appellant contends that its facility draws a geographically diverse pool of residents, and thus its services are available to an indefinite class of beneficiaries.  Yet the class of individuals able to benefit from the services provided by the appellant is limited by the appellant's fee structure.  "The fact that an organization charges fees for its services does not preclude a determination that the organization is charitable."  Western Massachusetts Lifecare, 434 Mass. at 104. (citing Assessors of Boston v. Garland School of Home Making, 296 Mass. 378, 389, (1937); New England Sanitarium v. Assessors of Stoneham, 205 Mass. 335, 342, (1910)).  However, when the fees charged effectively limit access to the services provided, an organization cannot be regarded as charitable.  Western Massachusetts Lifecare, 434 Mass. at 105; Boston Symphony Orchestra, 294 Mass. at 255-256; New England Sanitarium, 205 Mass. at 341. 
The Supreme Judicial Court in Western Massachusetts Lifecare found that financial selection requirements and high fees charged by the taxpayer organization constituted a severe limitation on access to the taxpayer's services:
The benefits of [the facility] are limited to those who pass its stringent health and financial requirements, requirements that make most of the elderly population ineligible for admission.  The class of elderly persons who can pay an entrance fee of $100,000 to $300,000 and have, from   their remaining assets, monthly income of   $2,000 to $7,000 is a limited one, not a class that has been "drawn from a large segment                of society or all walks of life."

Id. at 104 (quoting New England Legal Found., 423 Mass. at 612).  
Moreover, a facility's acceptance of Medicaid indicates that the facility's benefits are available to a broad range of recipients, particularly low-income elders.  See, e.g., H-C Health Services, 42 Mass. App. Ct. at 597 (in finding that an elderly facility qualified as a charitable organization, the Appeals Court noted that [t]he population at the nursing home [was] predominantly Medicaid patients."); see also, William B. Rice Eventide Home, Inc. v. Board of Assessors of the City of Quincy, Mass. ATB Findings of Fact and Reports 2006-457, 481, rev'd in part, on other grounds, 69 Mass. App. Ct. 867 (2007) (in finding a nursing home to be a charitable organization, the Board noted that approximately two-thirds of the residents were Medicaid patients and that the taxpayer operated at a substantial deficit for the years at issue); Fairview, Mass. ATB Findings of Fact and Reports at 1997-805 (in finding that a nursing facility was entitled to an exemption, the Board noted that residents were predominantly Medicaid patients, representing 65%-70% of the population).   
With respect to organizations serving the elderly, the Board has previously found that, where financial requirements, including high fees and the lack of Medicaid subsidies, bar access to the organization's services, the organization is not a public charity.  See, e.g., Kings Daughters and Sons, Mass. ATB Findings of Fact and Reports at 2007-1057 ("Courts and this Board have consistently ruled that a facility serving the elderly must be affordable to limited-income elders to qualify for the charitable exemption under clause Third."); Eventide, Mass. ATB Findings of Fact and Reports at 2006-479 ("[A] facility serving the elderly must be affordable to limited income elders to be recognized as charitable."); Jewish Geriatric Services, Mass. ATB Findings of Fact and Reports at 2002-361 (Board denied exemption because "[t]he high cost of [the appellant facility] created a barrier to the provision of services to a wide variety of elderly prospective residents.").
In the instant appeal, the Board found that the fees charged by the appellant - the $1,200 application fee, last month's rent and monthly fees ranging from $4,100 to $5,290 for Homestead apartments - were on par with the fee schedule in Jewish Geriatric Services, which the Board found to be beyond the reach of a sufficiently broad cross-section of the elderly population.  Given the fee schedule at Heritage, coupled with the fact that Medicaid is not available to cover the cost of these fees, the Board found and ruled that the selection requirements of Heritage impermissibly restricts its pool of applicants, such that access to Homestead is not available to a sufficiently broad cross-section of the elderly population.      
The appellant contended that it does not restrict access to Homestead apartments, because it does not require applicants to verify their finances on its financial questionnaire.  The appellant also stressed that no resident has ever been evicted for non-payment, and that no resident has been required to obtain a cosigner or guarantor.  However, Mr. Peloquin cited only one example of the appellant financially supporting a resident who had become unable to afford the fees during his stay.  The Supreme Judicial Court has noted that the lack of financial assistance being offered to residents demonstrates the effectiveness of the facilities' screening process:  "While [the facility] has a policy of not displacing a resident solely because the resident later becomes unable to pay the fees, the financial screening criteria are such that, to date, no resident has been unable to meet the monthly fees."  Western Massachusetts Lifecare, 434 Mass. at 99.  Likewise, the fact that the appellant could produce only one anecdotal example of a resident becoming unable to pay the appellant's fees demonstrated to the Board that the appellant's stringent screening procedure all but guarantees that its residents will be able to pay for their stay at Homestead, which results in a population of elders that is not drawn from a sufficiently broad cross-section of the general elderly population.  See, Jewish Geriatric Services, Mass. ATB Findings of Fact and Reports at 2002-366 ("The slim showing of actual subsidies being awarded demonstrated that the screening processes successfully narrowed the pool of applicants to an impermissibly small portion of the elderly community."). 
The appellant's fee structure and screening procedure significantly narrows the pool of potential Homestead residents.  The Board thus found and ruled that the appellant did not meet its burden of proving that Homestead's benefits are available to a sufficiently broad segment of the population to qualify as a public charity. 
The second component of the charitable test requires the organization to "perform activities which advance the public good, thereby relieving the burdens of government to do so."  Sturdy Memorial Foundation v. Board of Assessors of the Town of North Attleborough, Mass. ATB Findings of Fact and Reports 2002-203, 218, aff'd, 60 Mass. App. Ct. 573 (2004)(citing Molly Varnum Chapter DAR v. City of Lowell, 204 Mass. 487 (1909)). "The fact that an organization provides some service that would, in its absence, have to be provided by the government, 'is frequently put forward as the fundamental reason for exempting charities from taxation.'"  Western Massachusetts Lifecare, 434 Mass. at 105 (quoting Assessors of Quincy v. Cunningham Foundation, 305 Mass. 411, 418 (1940)).  
In Eventide, the taxpayer was operating a skilled nursing facility which served an elderly population, whose average age was 93; the facility accepted Medicaid and thus "had no selection requirements, financial or otherwise, that limited a potential resident's admission, so long as Eventide could meet their personal and medical needs."   Eventide, Mass. ATB Findings of Fact and Reports at 2006-483.  The Board found that the facility "serviced a segment of the population that otherwise would have required a government-provided alternative means of care, including care provided by another skilled nursing facility or even by a hospital."  Id.  Moreover, the facility was successful in its treatment of this population:  "In fact, as indicated by its rate of zero hospitalizations for 'preventable' conditions, the care provided by Eventide relieved government of the burden to provide costly hospital care."  Id. (citing Fairview Extended Care Services, Inc. v. Board of Assessors of Danvers, Mass. ATB Findings of Fact and Reports 1997-800, 810).      
By contrast, where elder care facilities provide services which would not otherwise be within the realm of services provided by government, these facilities have not been recognized as charities.  For example, in Western Massachusetts Lifecare, "[t]he vast majority of its residents enjoy sufficient good health to live independently (a pre-requisite for admission to [an independent-living apartment]), all of its residents must have significant assets and income with which to meet [the taxpayer's] fee schedule, and all of its residents must maintain adequate health insurance"; therefore, the Supreme Judicial Court ruled that "[t]his is not a population that, but for the operation of [the taxpayer], would be requiring governmental assistance with housing or health care."  Western Massachusetts Lifecare, 434 Mass. at 106; see also Jewish Geriatric Services, Mass. ATB Findings of Fact and Reports at 2002-369 ("The fact that Ruth's House did not accept any Medicaid supplements further revealed that Ruth's House provided a service for recipients who could afford the fees.").
The appellant provides care to a population which can afford an assisted-living facility, a non-Medicaid-subsidized, alternative means of care.  Moreover, despite its vacancies, the appellant makes no effort to market Homestead apartments to lower-income elders, and does not reduce fees to fill vacant apartments.  This appeal is thus akin to Western Massachusetts Lifecare and Jewish Geriatric Services, cases which involved high-priced assisted-living communities which cared for financially-independent elderly residents who would not have otherwise depended upon government assistance for their care.  Therefore, as in those appeals, the Board here found and ruled that the care provided by the appellant did not relieve any burden of government.
The Board found and ruled that the appellant did not provide services to a sufficiently broad elderly population, and that it did not relieve any government burden.  Accordingly, the Board found and ruled that the appellant was not a charitable organization for purposes of G.L. c. 59, § 5, Third. 

The subject property is occupied by the individual tenants of Homestead, not by the appellant.

Assisted-living facilities are governed by G.L. c. 19D.  Chapter 19D affords elderly residents of assisted living residences many of the rights and protections enjoyed by traditional tenants.  The Board has previously found that:
the Legislature clearly intended to emphasize the residential character of these establishments, and so in enacting G.L. c. 19D, it "further recognize[d] that assisted living residences should be operated and regulated as residential environments with supportive services and not as medical or nursing facilities."  St. 1994, c. 354,  § 1.  Accordingly, the crux of G.L. c. 19D is to ensure that assisted living residences "compensate for the physical or cognitive impairment of the individual while maximizing the individual's dignity and independence." 

Jewish Geriatric Services, Mass. ATB Findings of Fact and Reports at 2002-352 (quoting St. 1994, c. 354,  § 1).  To this effect, Chapter 19D affords elderly residents of assisted-living facilities many of the rights and protections enjoyed by tenants of traditional rental complexes.  For example, § 16 requires each residency apartment to be equipped with basic amenities like lockable doors on the entry of each apartment, private bathrooms, and a kitchenette "or access to cooking capacity" for every apartment.  G.L. c. 19D, § 16.  "These requirements underscore the legislature's concern that assisted living residences respect the privacy of elderly tenants and provide them a residential environment to the greatest extent possible, thereby 'maximizing the individual's dignity and independence.'"  Jewish Geriatric Services, Mass. ATB Findings of Fact and Reports at 2002-353 (quoting St. 1994, c. 354, § 3).
A key protection is provided under § 9:  "To not be evicted from the assisted living residence except in accordance with the provisions of landlord tenant law as established by chapter one hundred and eighty-six or chapter two hundred and thirty-nine."  G.L. c. 19D, § 9(18).  "It is this legal protection against eviction that distinguished [the assisted-living] tenants from the residents of other properties that have been found to be occupied by charitable institutions instead of by the residents."  Jewish Geriatric Services, Mass. ATB Findings of Fact and Reports at 2002-354.  The dormitory and boarding house residents in M.I.T. Student House, Inc. v. Assessors of Boston, 350 Mass. 539, 540 (1966), and the nursing home residents in H-C Health Services, Inc. v. Assessors of South Hadley, 42 Mass. App. Ct. 596 (1997), did not have rights and protections akin to traditional tenants, particularly the right for evictions to be pursued under landlord-tenant law; accordingly, the organization, not the individual residents, was considered the occupant of the property for purposes of G.L. c. 59, § 5, Third.  Cf. Franklin Square House v. Boston, 188 Mass. 409, 411 (1905) ("The occupation of the property ["a home for working girls at moderate cost"] is that of the corporation itself, and not of those to whom it affords a home, just as the occupation of a college dormitory or refectory is that of the institution of learning rather than that of its students").   
The Board found that Homestead residents are more akin to the residents in Charlesbank Homes v. City of Boston, 218 Mass. 14 (1914).  The appellant in Charlesbank Homes was a charitable corporation whose charitable purpose was "to provide wholesome and sanitary homes for working people and people of small means at moderate cost."  Id. at 16.  The Supreme Judicial Court found that the tenants "are not mere lodgers" but rather, they "have an interest in the respective apartments let to them" and accordingly "they are themselves the occupants thereof."  Id.  Therefore, while it "[did] not doubt that the plaintiff [was] a charitable corporation" within the meaning of the applicable statute and that its purpose "to provide wholesome and sanitary homes for working people and people of small means at moderate cost" was noble, the Supreme Judicial Court nonetheless found that the appellant did not meet the occupancy requirement under G.L. c. 59, § 5, Third, and accordingly, it denied the charitable exemption for the apartment house at issue.  Id.
In the instant appeal, the rights provided under G.L. c. 19D, particularly the right that evictions be pursued in accordance with landlord-tenant laws, secured for the residents of Homestead the legal status as tenants, like the renters in Charlesbank Homes.  While extenuating health circumstances require a presence of the appellant's staff within resident's apartments, residents nonetheless enjoy rights to privacy within their apartment.  Moreover, residents are expected to carry their own apartment insurance and are entitled to have their recommendations and grievances addressed.  Accordingly, the Board found and ruled that the individual residents of Homestead, not the appellant, occupied the subject property for purposes of G.L. c. 59, § 5, Third. 
The appellant contended that, despite the protection against eviction in accordance with landlord-tenant law enjoyed by residents of Homestead, the appellant occupies the subject property because the appellant's employees are present at all times to provide many services to residents, and the appellant reserves rights to the property, to the detriment of the residents, pursuant to the Residency Agreement.  For example, pursuant to Section V.G, the appellant retains the right to enter Heritage apartments "without prior notice to carry out the scheduled services."  The appellant argued that this provision limits the residents' rights to privacy in their apartments, and that privacy is even more limited in Homestead apartments, where, for safety purposes, there are no locks on the doors.  
However, the Board has previously found that "[t]he presence of the appellant's employees does not equate with "occupancy" for purposes of G.L. c. 59, § 5, Third."  Jewish Geriatric Services, Mass. ATB Findings of Fact and Reports at 2002-356.  Notwithstanding the presence of the appellant's employees, and the appellant's reservation of rights to enter Homestead apartments, practices implemented for the safety and care of the elderly residents with memory impairments, Homestead residents still enjoy many rights and protections of typical tenants.  While somewhat curtailed for residents of Homestead, the right to privacy is still secured for the residents through G.L. c. 19D, as reflected in the Residency Agreement at VI.B, which provides that, except in cases of emergency or to carry out the services provided by contract, the appellant must give 24-hours' notice before entering a Heritage apartment.  
The appellant also argued that residents do not have a protected right to their apartments, because Sections II.B and IX.D reserve the appellant's right to terminate the Residency Agreement if a resident's condition deteriorates to a point that the residents requires more services than those offered by the appellant.  However, the Board has previously found that, despite provisions relative to displacing a tenant whose health has deteriorated, which is dictated by the limited level of care offered by assisted-living facilities, assisted-living residents nevertheless enjoy many of the protections of traditional legal tenants, particularly the protection with respect to statutory eviction in accordance with landlord-tenant laws.  See Kings Daughters and Sons, Mass. ATB Findings of Fact and Reports at 2002-460 (despite the facility's right to terminate residency based upon a resident's deterioration of health, the Board found that "residents enjoy exclusive possession of a particular unit and have legal rights relating to eviction").  Therefore, the  Board found and ruled that the individual residents, not the appellant, occupy the property for purposes of G.L. c. 59, § 5, Third.  Accordingly, in conformity with Charlesbank Homes, the Board found and ruled that the charitable exemption was not available to the appellant.

Conclusion

The Board found that the appellant's services are not available to a sufficiently-broad cross-section of the elderly population, and that the appellant does not relieve any burden of government through its operation of an assisted-living facility.  Moreover, the Board found that the individual tenants, not the appellant, occupy the subject property.  Therefore, the Board found that the subject property does not qualify for the exemption at G.L. c. 59, § 5, Third.  
Accordingly, the Board issued decisions for the appellee in these appeals.
					  APPELLATE TAX BOARD
	
					By:________________________________
					   Thomas W. Hammond, Jr., Chairman
	
A true copy:
Attest: __________________________
	      Clerk of the Board

 Three months from the February 1, 2005 abatement application was Sunday, May 1, 2005.  When the last day of a filing period falls on a Saturday, Sunday, or holiday, the day for the performance of any act required by statute is extended by operation of law to the following business day.  See G.L. c. 4, § 9.  Accordingly, the last day for the assessors to act on the appellant's abatement application was May 2, 2005. 
  Eventide involved consolidated appeals for fiscal years 2004 and 2005.  The Appeals Court reversed and remanded the appeal for fiscal year 2004 on jurisdictional grounds.  The Board had ruled that it lacked jurisdiction to hear the appeal for that fiscal year.  The Board's ruling in favor of Eventide was for its fiscal year 2005 appeals.
 In Jewish Geriatrics, the fees ranged from $63.00 to $85.00 per day for one room in a companion suite, $94.00 to $101.00 per day for a one-room private suite, and $105.00 to $140.00 per day for a two-room private suite.  The rates were then increased by $23 per day for residents in the Assisted Living Plus program, or by $33 per day for residents of the Renaissance Neighborhood, which served elders suffering from memory impairments.  Jewish Geriatrics, Mass. ATB Findings of Fact and Reports at 2002-344.  At this rate, elders in the Renaissance Neighborhood were paying between $2,976.00 to $5,363.00 per month (assuming 31 days in a month), as compared with Heritage's rates of $4,100 to $5,290 per month for Homestead apartments.  
 All assisted living residences constructed after the effective date of G.L. c. 19D must include a private full bathroom with a bathing facility in every apartment.  All other residences must include at least a private half bathroom and at least one bathing facility for every three residents.  G.L. c. 19D, § 16.
 The Secretary of Elder Affairs may waive the requirements for bathrooms and kitchenettes if the secretary determines that "public necessity and convenience require and to prevent undue economic hardship."  However, in this event, the assisted living residence must "otherwise meet the purposes of assisted living to provide a home-like residential environment, which promotes privacy, dignity, choice, individuality and independence for its residents."  G.L. c. 19D, § 16.
 The implementation of the tenancy protections under G.L. c. 19D distinguishes this appeal from Island Elderly Housing, Inc. v. Board of Assessors of the Town of Tisbury, Mass. ATB Findings of Fact and Reports 1997-119, where the Board found that the organization, not the individual tenants, occupied the subject property.  Island Elderly pertained to fiscal years 1990 and 1991, prior to the passage of G.L. c. 19D.  In fact, the housing in Island Elderly was not described as "assisted-living," and there was no evidence of the landlord-tenant rights and protections guaranteed to residents like those provided under G.L. c. 19D.  Island Elderly is thus inapplicable to this appeal for purposes of the issue of occupancy. 

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ATB 2008-1104