John Bertram House of Swampscott, Inc. v. Board of Assessors of the Town of Swampscott (May 4, 2006)

COMMONWEALTH OF MASSACHUSETTS

APPELLATE TAX BOARD



JOHN BERTRAM HOUSE OF        v.   BOARD OF ASSESSORS OF
SWAMPSCOTT, INC.           	    THE TOWN OF SWAMPSCOTT

     
Docket Nos. F256860, F259522,		Promulgated:
  F263185, F266939 		May 4, 2006	
     			   


	These are appeals under the formal procedure pursuant to G.L. c. 59, §§ 64 and 65 from the refusal of the appellee to abate taxes on certain real estate in the Town of Swampscott assessed under G.L. c. 59, § 38 for fiscal years 2000, 2001, 2002, and 2003.
Commissioner Rose heard the appeals and was joined in the decision for the appellee by Commissioners Scharaffa, Gorton, and Egan.
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.

Martin J. Newhouse, Esq. for the appellant.

Richard P. Bowen, Esq. for the appellee.


	FINDINGS OF FACT AND REPORT
	On the basis of testimony and exhibits introduced at the hearing of these appeals, the Appellate Tax Board ("Board") made the following findings of fact.  
	Mr. Francis Mayo testified on behalf of the appellant.  In the early 1990s, Mr. Mayo was a member of the board of trustees of the John Bertram House of Salem ("Salem House").  At that time, Mr. Mayo testified, the Salem House decided to expand their operations.  Not able to do so within Salem, the board of trustees began to explore options in neighboring communities.  Eventually, the John Bertram House of Swampscott, Inc. ("appellant") was formed.
The appellant is a Massachusetts corporation organized as a not-for-profit charitable corporation under G.L. c. 180.  The corporation has no capital stock, none of its net earnings, property or other assets may inure to the benefit of, or be distributed to, any private person or individual or member, and upon its dissolution, its net assets are to be used for charitable purposes pursuant to its Articles of Organization.  The appellant also has Internal Revenue Code ("Code") Section 501(c)(3) status, and has received Massachusetts Department of Revenue certificates of exemption from sales tax on its purchases.
     The purpose of the appellant, as stated in its Articles of Organization, is:
[t]o maintain, support and operate on a non-profit basis a residential home for elderly persons of low and moderate income, including the provision of congregate living facilities designed to foster the physical and emotional security of the residents . . . .

After its incorporation, the appellant purchased an option on a parcel of real estate located at 565 Humphrey Street in Swampscott ("subject property"), which had been identified as a potential building site.  The subject property, however, is located in a Business-1 zoning district which allows only a two-family structure.  Therefore, the appellant petitioned the Zoning Board of Swampscott ("Zoning Board") for an exemption.  On March 1, 1994, the Zoning Board granted the appellant's petition and allowed construction of an assisted-living facility with up to sixty units.  In exchange for the variances set forth in the zoning exemption, the appellant was required to set aside twenty percent of its total units to be made available to low or moderate income tenants as defined by Massachusetts law.
	Subsequently, in order to construct the structure, the appellant applied for and received a mortgage from the Massachusetts Housing Finance Agency ("MHFA").  In return for what Mr. Mayo testified was a "favorable interest rate," and also a repayment period of forty years, the appellant agreed to set aside twenty percent of its units for low or moderate income families as defined by Massachusetts law, a commitment previously made to the Zoning Board.
The Board of Assessors of the Town of Swampscott ("assessors") valued the subject property and assessed taxes thereon in accordance with the following table.

Docket No.	Fiscal
Year	Assessed Value	Tax 
Rate	Tax
Assessed	
F256860	2000	$5,114,200	$15.25	$77,991.55	
F259522	2001	$5,625,700	$14.44	$81,235.11	
F263185	2002	$6,092,100	$13.33	$81,207.69	
F266939	2003	$6,173,900	$13.52	$83,471.13	

The taxes were paid without accruing interest and the appellant timely applied to the assessors for abatement of the taxes assessed and exemption of the subject property.  The assessors denied each of the applications.  The appellant seasonably filed petitions with the Board seeking an exemption for the subject property.  The pertinent filing dates are set forth in the following table.


Docket No.	Fiscal Year	Abatement Application Filed	Abatement Application Denied	Appeal Filed with Board	
F256860	2000	01/25/00	03/02/00	06/01/00	
F259522	2001	01/31/01	02/28/01	05/07/01	
F263185	2002	01/18/02	02/08/02	05/07/02	
F266939	2003	01/31/03	03/14/03	04/08/03	

Based on these facts, the Board found that it had jurisdiction over these appeals.
The subject property consists of two acres of land improved with a three-story structure that houses a total of fifty-nine units.  Since the end of 1997, and at all times relevant to these appeals, the appellant has operated on the premises an assisted living development known as "Bertram House."  The majority of units at Bertram House are studios ranging in size from 300 to 350 square feet.  There are a few one-bedroom units which are essentially a studio with an added room.  The third floor of the building, the "Reminiscence Neighborhood,"  contains twenty-two units and is set aside for patients with Alzheimer's or other debilitating forms of dementia.  
Each unit at Bertram House, including those within the Reminiscence Neighborhood, contains a bathroom and a small kitchenette with a half-size refrigerator, a counter with a sink, a few cabinets, and a microwave.  Stoves and burners are expressly prohibited due to safety concerns.  Bertram House also contains common living areas, including dining and social areas, entertainment and activity centers, and common walkways. 
As an assisted living residence, Bertram House is not licensed to offer around-the-clock nursing care.  Therefore, by Massachusetts law, prospective residents are subjected to a screening process to determine whether they meet the physical and medical requirements of Bertram House.  Once accepted for admission and prior to moving in, residents must submit a physician's report on a form provided by the appellant.  This report, together with completion of a Resident Assessment Form and an Individual Service Plan for each resident, allows the appellant and the resident to determine the level of care needed.
Upon acceptance for residency, a prospective resident must enter into a Resident Agreement ("Resident Agreement").  The Resident Agreement assigns the resident to a particular unit for a one-year period of occupancy renewable on a month-by-month basis thereafter.  Bertram House may terminate the Resident Agreement for various reasons including a resident's failure to pay fees and charges when due.  Residents are assigned a specific unit when they enter Bertram House.  From that point, the appellant may transfer a resident only if failure to do so would jeopardize the health or safety of the resident or anyone else at Bertram House, or if the resident requires a higher level of care.  Generally, only the resident may occupy his or her assigned unit.  However, another person may occupy the same unit, at the resident's request, if: the unit is suitable for multiple occupancy; the second person meets all requirements for admission to Bertram House; and, the second person executes a separate Resident Agreement.  During the time that Bertram House has a separate Resident Agreement for the second resident, each resident is required to pay Bertram House the full amount of all applicable fees and charges for the unit. 
The Resident Agreement "strongly recommends" that residents maintain their own insurance coverage, including health, personal property, liability, and renter's insurance.  The Resident Agreement also requires a third party to sign a Responsible Party Agreement ("RP Agreement") guaranteeing payment if the resident does not make payments when due.  
All units at Bertram House are equipped with locks.  Pursuant to the Resident Agreement, Bertram House personnel "will respect the Resident's privacy and make their presence known (except in emergency) when entering the Suite and will schedule the entry in advance whenever possible."  Employees are trained to knock before entering a resident's room to protect the resident's privacy.   Residents, however, are required to allow Bertram House personnel to enter their units for the following reasons: (1) to perform necessary inspections and repairs, and to fulfill the appellant's obligations to provide assisted-living services; (2) during the last sixty days of the residency to show the apartment to prospective residents; (3) when there is "good reason" for the staff to believe that the resident requires assistance, including if the resident has used an emergency signaling device or has failed to respond; and (4) when there is "good reason" for the staff to believe that the resident has damaged the unit.  
Most residents of Bertram House require some degree of assistance with daily living.  As part of its basic service, Bertram House staff provides to the residents "basic assistance including prompting, monitoring and observing" with activities of daily living, including, but not limited to, bathing, dressing, grooming, ambulating, and orientation.  Bertram House also provides the residents  with three meals a day, health monitoring, laundry, housekeeping, and social activities.  At an additional cost, the "Assisted Living Plus" program is offered to residents who require more assistance with activities of daily living, including physical assistance with bathing, dressing, clothes selection, grooming, eating, and walking.  Also at an additional cost, the "Reminiscence Neighborhood" provides specialized assistance within a secure environment for residents with Alzheimer's Disease and other forms of memory-impairment and dementia.  Bertram House provides other services and supplies for additional fees, including transportation for personal trips, incontinence products, beauty parlor services, guest meals, and toiletries.  These fees are included on the residents' monthly bills.
Base rates for Assisted Living at Bertram House, for the years at issue, were as follows:
			Daily			Monthly

  $ 98 - $152 	       $2,940 - $4,560
  $102 - $158		  $3,060 - $4,740
  $107 - $166         $3,210 - $4,980
2002		  $109 - $174         $3,270 - $5,220

Residents enrolled in the Assisted Living Plus program were charged an additional $22 to $25 per day and, residents of the Reminiscence Neighborhood were charged an additional $32 to $37 per day.  In addition, residents were required to pay a one-time community fee equal to sixty times the daily rate, which calculated to $5,880 to $10,440.
Bertram House offered three types of subsidies:  MHFA set-aside rooms; cash subsidies; and Medicare reimbursements.  The majority of Bertram House's so-called subsidies are in the form of foregone rents attributable to the twelve set-aside units, required by agreement with MHFA and the Zoning Board, and also participation in the Federal Group Adult Foster Day Care ("GAFDC") program.  Since the rental rate of the GAFDC rooms is limited to the amount charged for MHFA rooms, individuals who participate in this program are placed in one of the twelve set-aside rooms.  In total, the appellant's reported foregone revenues were as follows:  $345,084 for 1999; $374,808 for 2000; $373,356 for 2001; $227,136 for 2002; and, $366,384 for 2003.  Cash subsidies for these years were as follows:  $0 for 1999; $30,180 for 2000; $72,828 for 2001; $20,280 for 2002; and, $40,000 for 2003.  The appellant provided no evidence as to the number of residents that applied for and received a subsidy, the type of subsidy, or the total amount that a particular resident received in a given year.  
On the basis of all of the evidence offered at the hearing of these appeals, the Board made the following findings of fact.  The Board found that the subject property was not operated as a charitable endeavor because it provided services to a limited segment of the population.  Prospective residents are subjected to a screening process to determine whether they meet the physical and medical requirements of Bertram House.  To live at Bertram House, residents must pay significant monthly fees that ranged from $2,940 to $5,490, for the years at issue.  In addition, residents must have a third party sign an RP Agreement whereby payment is guaranteed.  Furthermore, the Board found that even though Bertram House set aside twelve units, twenty percent, for low to moderate-income persons, and also awarded minimal financial assistance to residents, it was insufficient to demonstrate the affordability of the facility for a broad spectrum of the elderly population.  The Board thus found that the appellant failed to meet its burden of proving that Bertram House benefited a sufficiently large or indefinite segment of the community.  
Moreover, elders of poor health and limited financial means are the ones who most likely would require nursing home or other government-provided services.  The appellant thus failed to prove that, but for Bertram House, the government would have been charged with the burden of caring for the elders who resided at Bertram House.  Therefore, the Board found that the appellant failed to meet its burden of proving that Bertram House relieved or lessened any burden government would have been under an obligation to assume.  
The Board further found that while Bertram House offered specialized services and some common living areas, Bertram House essentially offered its residents full, legal tenancy.  The Board found that beyond extenuating health circumstances that governed the level of care that a resident required, residents had a protected right to live in their own units.  For example, the Board found that the policies of Bertram House, as evidenced by the Resident Agreement, emphasized and ensured respect for the residents' privacy.  The appellant's staff had limited rights to enter the residents' units for emergencies, repairs, or to show the apartment to prospective tenants at the remainder of the residents' occupancy, similar to a traditional tenancy.  All employees were expected to schedule appointments with the residents in advance and to knock before entering the residents' units except in emergencies.  A resident could be transferred from his or her unit only if there were safety concerns or if the resident required a higher degree of care.
Finally, the Board found that the safeguard granted to residents under Massachusetts law, that any attempted eviction would have to be pursued through a court proceeding and in accordance with landlord-tenant laws, bestowed upon the Bertram House residents the legal status and protection of traditional tenants.  Therefore, the Board found that the appellant was not the actual occupant of the subject property.  Rather, the Board found that the residents of Bertram House were tenants of the complex and, accordingly, they were the actual occupants of the subject property.  
Accordingly, the Board found that the appellant did not operate the subject property so that it acted as a public charity, nor did the appellant "occupy" the subject property. Therefore, the Board issued a decision for the appellee in these appeals.  

OPINION
"[S]tatutes granting exemption from taxation are strictly construed."  Animal Rescue League of Boston v. Assessors of Bourne, 310 Mass. 330, 332 (1941).  Therefore, "[a] taxpayer is not entitled to an exemption unless he shows that he comes within either the express words or the necessary implication of some statute conferring this privilege upon him."  Milton Hospital & Convalescent Home v. Board of Assessors of Milton, 360 Mass. 63, 67 (1971) (quoting Boston v. Quincy Mkt. Cold Storage & Warehouse Co., 312 Mass. 638, 654 (1942)) (other citations omitted). The relevant provision of G.L. c. 59, § 5, Third, the exemption at issue in these appeals, exempts from taxation "real estate owned by . . . a charitable organization and occupied by it or its officers for the purposes for which it is organized."
	Pursuant to this provision, the appellant must establish, inter alia, two criteria: (1) its operations were such that in fact it was a public charity and (2) that Bertram House was the occupant.  See Board of Assessors of Hamilton v. Iron Rail Fund of Girls Club of America, Inc., 367 Mass. 301, 306 (1975)("Iron Rail Fund of Girls Club of America").  The assessors did not challenge the status of the appellant as a charitable corporation.  They did, however, challenge whether the appellant's operation of the subject property was in furtherance of the charitable purpose for which Bertram House was organized and whether the appellant was the actual occupant of the subject property.  The Board found and ruled for the assessors on both issues.
Charitable Operation

"A corporation claiming that its property is exempt under § 5, Third, has the burden of proving that it comes within the exemption, and that it is in fact operated as a public charity."  Town of Norwood v. Norwood Civic Association, 340 Mass. 518, 525 (1960) (citing American Inst. For Economic Research v. Assessors of Great Barrington, 324 Mass. 509, 512-14 (1949)).  In the instant appeals, the appellant was organized as a charitable corporation pursuant to its Articles of Organization.  However, an organization's Code Section 501(c)(3) status is not dispositive in determining whether its property qualifies for the Massachusetts property tax exemption.  See H-C Health Services v. Board of Assessors of South Hadley, 42 Mass. App. Ct. 596, rev. denied, 425 Mass. 1104 (1997) ("H-C Health Services").  "The mere fact that the organization claiming exemption has been organized as a charitable corporation does not automatically mean that it is entitled to an exemption for its property. . . .  Rather, the organization 'must prove that it is in fact so conducted that in actual operation it is a public charity.'"  Western Massachusetts Lifecare Corp. v. Board of Assessors of Springfield, 434 Mass. 96, 102 (2001) ("Western Mass Lifecare")(quoting Jacob's Pillow Dance Festival, Inc. v. Assessors of Becket, 320 Mass. 311, 313 (1946)).  The organization bears the burden of proving that its operation of the property is in furtherance of the charitable purposes for which it was organized.  See Iron Rail Fund of Girls Club of America, 367  Mass. at 306.    
a.  Sufficiently inclusive class of beneficiaries
In determining whether an organization is in fact operating as a public charity, a court must consider whether the organization's benefits are readily available to a sufficiently large or indefinite segment of the population.  Western Mass Lifecare, 434 Mass. at 105.  While charging a fee for services will not necessarily preclude charitable exemption, "the organization's services must still be accessible to a sufficiently large and indefinite class of beneficiaries in order to be treated as a charitable organization."  Id.  In other words, it is necessary that "the persons who are to benefit are of a sufficiently large or indefinite class so that the community is benefited by its operations."  Harvard Community Health Plan, Inc. v. Assessors of Cambridge, 384 Mass. 536, 543 (1981) ("Harvard Community") (citing Children's Hospital Medical Center v. Board of Assessors of Boston, 353 Mass. 35, 44 (1967), Assessors of Boston v. Garland School of Home Making, 296 Mass. 378, 388-89 (1937), and 4 A. Scott, Trusts at 2897-2898 (3d ed. 1967)).  Another key factor to be considered is whether the operation of the program "'lessen[s] any burden government would be under any obligation to assume.'"  Western Mass Lifecare, 434 Mass. at 105 (quoting Boston Chamber of Commerce v. Assessors of Boston, 315 Mass. 712, 717 (1944)).
The courts' attention to the costliness of fees reflects the well-established principle that "selection requirements, financial or otherwise, that limit the potential beneficiaries of a purported charity will defeat the claim for exemption."  Western Mass Lifecare, 434 Mass. at 104 (quoting Boston Symphony Orchestra v. Board of Assessors of City of Boston, 294  Mass. 248, 255-256 (1936)) (finding that the charitable exemption was properly denied where an educational organization charged substantial admission fees and gave seating preferences to season ticket holders).  For example, in disallowing a charitable exemption to a retirement community corporation, the Supreme Judicial Court in Western Massachusetts Lifecare focused on selection requirements which limited the availability of the organization's services to the elderly population at large.  
The residential community at issue in Western Massachusetts Lifecare, Reeds Landing, was a facility offering three different types of elderly housing: independent living units ("ILU"); assisted living units ("ALU") providing some assistance with activities of daily living and certain safety and security features for a limited number of residents with impaired memory; and a skilled nursing facility ("SNF") providing twenty-four hour nursing care to residents.  Western Massachusetts Lifecare, 434 Mass. at 99-100.  Entry into the ILUs required a resident to pay a high initial entrance fee ranging from $100,200 to $230,500, which was only partially refundable if the resident vacated Reeds Landing, or from $128,000 to $290,200 for a guaranteed refund of eighty-five per cent, and then monthly service fees ranging from $1,325 to $2,050.  Id. at 99.  For entry into the ALUs, an existing ILU resident could transfer for "a slightly increased monthly fee," and thus avoid the entrance fee, or new ALU residents could contract for guaranteed future entrance into an SNF and thereby pay an ALU entrance fee of $75,000 and monthly service fees ranging from $2,200 to $2,800.  Id. at 100.  
The SNF facility, with daily fees ranging from $165 to $185, was in theory open to the public on a per diem basis.  Id., n.3.  However, the Supreme Judicial Court ("Court") affirmed the Board's finding that "access to the SNF was, as a practical matter, only available to those who had entered Reeds Landing by way of an ILU or an ALU (and thus had already paid substantial entry fees)."  Id. at 100-01.  In the Court's opinion, the substantial fees created an insurmountable barrier to the provision of Reeds Landing's services to a sufficiently broad spectrum of the elderly population:
The benefits of Reeds Landing 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 Foundation v. Assessors of Boston, 423 Mass. 602, 612 (1996)).  Accordingly, the Court ruled that Reeds Landing did not benefit a sufficiently broad section of the community to satisfy the charitable exemption requirements.
	In Jewish Geriatric Services, Inc. et. al. v. Assessors of Longmeadow, ATB Findings of Fact and Reports 2002-337 aff'd 61 Mass. App. Ct. 73 (2004) ("Jewish Geriatric") the taxpayers sought to distinguish their facility from that of Western Mass Lifecare based on the high entrance fee charged at Reeds Landing and also the requirement that prospective residents prove that they had sufficient assets and income to pay.  Jewish Geriatric, 61 Mass. App. Ct. at 79.  The Appeals Court, however, was not
persuaded by the attempt to distinguish the facilities.  In its decision, the Appeals Court noted that residents of Reeds Landing had an option to forego the entrance fee and that Jewish Geriatric's "monthly fees of $1,890 to $5,280 are comparable to, if not higher than" those at Reeds Landing.  Id.  Furthermore, Jewish Geriatric's "demand for a guarantor operates to similarly limit the pool of financially eligible applicants."  Id.  "'Selection requirements, financial or otherwise, that limit the potential beneficiaries of a purported charity will defeat the claim for exemption.'"  Id. at 79 (quoting Western Mass Lifecare at 104).  Accordingly, the Appeals Court found and ruled that the taxpayers in Jewish Geriatric did not serve a charitable purpose.
In the present appeals, the Board found and ruled that the appellant failed to meet its burden of proving that Bertram House benefited a sufficiently large or indefinite class.  The high cost of Bertram House created a barrier to the provision of services to a wide variety of prospective elderly residents.  Although charging fees for services will not necessarily preclude an organization's charitable status, (See New England Sanitarium v. Inhabitants of Stoneham, 205 Mass. 335, 342 (1910)), the Court has nonetheless found that providing services at a lower cost, thereby making services available to a broader spectrum of the community, supports a finding that an organization is providing a charitable service.  See Harvard Community, 384 Mass. at 540 (finding that an organization which offers its enrollees high quality care at a lower cost, as much as one-fourth to one-third lower than traditional care in some parts of this country, is providing charitable service); see also H-C Health Services, 42 Mass. App. Ct. at 597 (finding that a nursing home was charitable, Appeals Court emphasized the affordability of the organization's services to limited-income elders by specifically noting that "[t]he population at the nursing home [was] predominantly Medicaid patients").
Where, as in the present appeals, the selection requirements and the monthly fees charged to residents are so restrictive that they limit the class of beneficiaries, the Board and the Court have found that the organization claiming exemption does not in fact operate as a public charity.  See Jewish Geriatric, infra, and Western Mass Lifecare, infra.  In the instant appeals, in an attempt to distinguish itself from the taxpayers in the cited cases, the appellant placed great weight on the fact that Bertram House set aside twenty percent of its units, a total of twelve, for low to moderate income individuals.  In exchange for the foregone revenues attributable to the set-aside units, however, the appellant received a beneficial, and below market, mortgage rate for an extended period of time.  Consequently, the appellant incurred lower monthly expenses by which to offset the reduced income.  
Accordingly, the Board found and ruled that the appellant failed to meet its burden of proving that Bertram House benefited a sufficiently inclusive section of the elderly community.  The health and financial selection requirements of Bertram House limited its class of potential beneficiaries to an impermissibly limited class of elderly residents.  The Board found that the nearly $3,000 to more than $5,000 monthly fees were not affordable for a sufficiently inclusive range of the elderly community. 
 b.  Relief of governmental burden
"The operation of a private business is not charitable, no matter how noble its pursuits." Sturdy Memorial Foundation v. Board of Assessors of the Town of North Attleborough, ATB Findings of Fact and Reports 2002-203, 218 (citing Massachusetts Medical Society v. Assessors of Boston, 340 Mass. 327, 333 (1960).  Private organizations operate in the furtherance of a charitable purpose when they "perform activities which advance the public good, thereby relieving the burdens of government to do so."  Id. (citing Molly Varnum Chapter DAR v. City of Lowell, 204 Mass. 487 (1909)).  "However, to the extent that a[n] [] organization is conducting a business for profit, it is not relieving government of a burden and, accordingly, its business is not charitable."  Id. (citing Hairenik Association, Inc. v. City of Boston, 313 Mass. 274, 279 (1943)).       
In Milton Residences for the Elderly, Inc. v. Board of Assessors of the Town of Milton, ATB Findings of Fact and Reports 1983-512 ("Milton Residences"), the Board ruled that a corporation operating an elderly housing complex did not qualify for the charitable exemption where "there [was] no requirement that these elderly tenants be needy.  Nor was there any evidence produced at the hearing that they were in fact needy."  Id. at 520.  In its decision, the Board noted that the "ground for the charitable exemption is that the organization alleviates some burden of government by conferring benefits which would advance the public interest."  Id. (citing Board of Assessors of Quincy v. Cunningham Foundation, 305 Mass. 411 (1940)).  Therefore, to the extent that the beneficiary of the organization would not depend on the assistance of government in the absence of the program's operation, the organization is not alleviating government of any burden.  See generally Milton Residences at 519-521.
	In Jewish Geriatric, the Appeals Court ruled that even though some of its residents would be physically unable to live independently, it did not support the taxpayers' contention that the government would have to care for them but for the taxpayers' facility.  Jewish Geriatric, 61 Mass. App. Ct. at 80.  The Appeals Court found that there was no evidence to prove that those same residents would be unable to purchase less expensive care elsewhere and that they would be forced to resort to public assistance.  Id.  Thus, the Court concluded "it cannot fairly be said that Ruth's House relieves the government of any particular burden."  Id. 
Likewise, in these appeals, the Board found and ruled that the appellant failed to prove that Bertram House lessened any burdens that government would have been under an obligation to assume in the absence of its operation.   The Board found that the appellant failed to prove that Bertram House, an assisted living residence, serviced a segment of the population that otherwise would have required nursing home care, as opposed to a non-government subsidized alternative means of care, including at-home services.  The inability of Bertram House to provide more extensive forms of care ensured that the residents who successfully passed the screening requirements would be in relative good health and with a sufficient income and, therefore, not a group whose care would be a burden of government. 
2.  Occupation
The Board found and ruled that the subject property was not occupied by Bertram House; rather, the property was occupied by the individual Bertram House residents.  The Board based its decision on its finding that the residents were legal tenants of Bertram House who enjoyed the full range of rights and protections associated with legal tenancy.  
Where residents are afforded legal protections under landlord/tenant law, the Board has found and ruled that the residents, and not the charitable organization, occupy the property.  In this regard, the facts of the present appeals are strikingly similar to those in Jewish Geriatric in which the organization seeking charitable exemption operated a sixty-four unit assisted living facility similar in nature to Bertram House.  As with the residents of Bertram House, the residents in Jewish Geriatric were required to sign a residency agreement which assigned the resident to a particular suite and provided a one-year term of occupancy with automatic month-to-month renewal thereafter.  Jewish Geriatric, ATB Findings of Fact and Reports 2002 at 341.  The units in Jewish Geriatric, as those at Bertram House, were equipped with locks, and staff had only limited rights to enter the residents' units for emergencies, repairs, or to show the apartment to prospective tenants.  Id. at 348.
In its Findings, the Board noted that c. 19D, § 14 requires a written residency agreement be signed by both parties, "clearly describing the rights and responsibilities of both parties, like a lease for a traditional tenancy" and that § 16 requirement that the organization provide to the residents all the "basic amenities of a traditional apartment, including locks on the entry doors to all units, private bathrooms . . . and a kitchenette or 'access to cooking capacity for every unit.'"  Id. at 353.   Therefore, the Board ruled that the residents of the assisted living facility were tenants because the organization respected the residents' privacy in their units, the units possessed all the amenities of a private residence, and the residents enjoyed legal protections afforded to tenants, especially the legal process accorded to tenants regarding eviction.  Thus, the tenants, not the organization, occupied the property at issue.   Id. at 351-358; see also Kings Daughters & Sons Home, et. al. v. Assessors of Wrentham, ATB Findings of Fact and Reports 2002-427, 461 (finding that independent living units within an age-restricted Community provide the amenities of a traditional private residence and, therefore, the residents, not the organization, are occupants of the property).  
It is the legal protection against eviction that in large part distinguished the residents of Bertram House from residents of other properties that have been found to be occupied by charitable institutions instead of by the residents.  See M.I.T. Student House, Inc. v. Board of Assessors of Boston, 350 Mass. 539, 540 (1966)(finding that the charitable organization was the occupant of a dormitory and boarding house because needy students did not have protections under landlord/tenant law); Franklin Square House v. Boston, 188 Mass. 409, 411 (1905)(finding that the charitable organization occupied the subject property because housing working girls was similar to housing students in a dormitory).
However, where residents are afforded legal protections under landlord/tenant law, the Court ruled that the residents, and not the charitable organization, occupy the property.  Charlesbank Homes v. City of Boston, 218 Mass. 14 (1914).  In that case, the taxpayer 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 Court found that the tenants "are not mere lodgers" and that they "have an interest in the respective units 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 Court nonetheless found that the appellant did not meet the occupancy requirement and, accordingly, it denied the charitable exemption for the apartment house at issue.  Id.
On this basis, the Board found that Bertram House's relationship with its residents is akin to the landlord/tenant relationship found in Jewish Geriatric.  Like a lessee, a resident at Bertram House had a right to remain in a unit as long as he or she complied with the Residency Agreement, including payment of the monthly charges.  Like a landlord, Bertram House had the right to enter the units in emergencies or at reasonable times to repair or remarket the unit.  Furthermore, as residents of an assisted living facility, residents were accorded tenants' rights relating to eviction.  See G.L. c. 19D;  Jewish Geriatric, ATB Findings of Fact and Reports 2002 at 358.
In the present appeals, as evidenced by the Resident Agreement, Bertram House respected the privacy of the residents to the highest degree possible while still enabling its employees to provide services to the residents for which the parties had contracted.  Furthermore, while Bertram House, as an assisted living residence, was required to provide certain services to its residents, the residents were nonetheless lawful tenants of the subject property and, therefore, the tenants were the actual occupants of the property.  Accordingly, the Board ruled that the appellant was not entitled to a charitable exemption for the subject property, because Bertram House did not occupy the property as required under G.L. c. 59, § 5, Third.
Conclusion
The Board found and ruled that the appellant (1) did not operate as a public charity and (2) did not occupy the subject property.  Accordingly, the Board found and ruled
that the appellant did not qualify for the charitable exemption and entered a decision for the appellee.

						APPELLATE TAX BOARD

				By:	___________________________________
					Anne T. Foley, Chairman


					___________________________________
					Frank J. Scharaffa, Commissioner


					___________________________________
					Donald E. Gorton, III, Commissioner


					___________________________________
					Nancy T. Egan, Commissioner


					___________________________________
					James D. Rose, Commissioner


A true copy,



Attest:	____________________________
		Assistant Clerk of the Board

 Residents wishing to enter the ALU without guaranteed entrance into an SNF could avoid paying the entrance fee, but the monthly fees were then increased to $2,700 to $2,800.  Id.  
 On appeal, the Appeals Court declined to consider the issue of occupancy.  Jewish Geriatric, 61 Mass. App. Ct. at 73, 76.

ATB 2006-306