Derelict Fee Statute Defines Property Rights

For decades Mas­sachusetts courts followed an an­cient common law rule regarding ownership of land underlying roads and streams. Under this rule, transfers of land abutting roads and streams generally did not include the land beneath those roads and streams, unless the deed specified otherwise.

This rule created title problems involving strips of land beneath roads, especially un­developed paper roads, and waterways, be­cause the owners of such marginally useful properties were often difficult to identify.

In 1971, the Massachusetts legislature en­acted the derelict fee statute as a solution. The statute provides that deeds transferring land abutting roads and streams automati­cally include the ownership interest of the grantor in such roads or streams, generally to the center line, except when deeds specif­ically state otherwise.

The statute’s implementing legislation gave it retroactive effect, so it would cure both existing and future title problems. But this retroactivity has two exceptions.

The first is for land established by the Land Court as registered land before the statute was enacted. The second applies where a prior owner of land beneath a road or stream “changed his position as a result of a decision of a court of competent juris­diction.”

This second exception played an impor­tant role in an Appeals Court decision is­sued last March in Town of Hull v. Ferrara.

Town Claims Ownership of Undeveloped Road

John Ferrara and Kathleen Ferrara pur­chased a house lot and a beach lot on Nan­tasket Beach in 2017.

Between the two lots is a road known as Beach Avenue. Most of Beach Avenue is de­veloped and maintained by the town of Hull but not the small segment between the Ferr­aras’ two lots.

The town claimed ownership of that un­developed portion of Beach Avenue and sued the Ferraras in Land Court to establish title. The Ferraras counterclaimed that they owned the disputed area because of the der­elict fee statute. A land court judge ruled in the Ferraras’ favor, and the town appealed.

Reviewing the early history of the Ferr­aras’ neighborhood, the Appeals Court noted that in 1886 the Nantasket Co. sold the house and beach lots, but not the intervening segment of Beach Avenue, to Henry Norwell.

The Nantasket Co. next sold several lots and Beach Avenue, including the disputed area, to Eban Jordan. Jordan’s estate con­veyed Beach Avenue and the disputed area to the town in 1913.

The court also discussed the Supreme Ju­dicial Court’s 1915 decision in Hobart v. Towle, which involved a dispute over own­ership of land beneath Manomet Avenue near Nantasket Beach.

Because the Hobart case arose decades before the derelict fee statute took effect, the SJC applied the old common law rule, and held that the land beneath Manomet Av­enue belonged to the town, instead of the owner of an abutting lot. The town later took responsibility for paving and maintain­ing Manomet Avenue and most of Beach Av­enue, but not the disputed area claimed by the Ferraras.

Retroactive Statute ‘Not a Time Machine’

The court’s decision noted that “the dere­lict fee statute applies retroactively, but it is not a time machine.”

It then applied the following logic to over­rule the Land Court decision.

Beach Avenue, including the disputed area, was transferred to the town in 1915, before the derelict fee statute was in effect. Therefore, when the Ferraras acquired their house lot and beach lot decades later, they could not have acquired the disputed area, because the person who sold them the two lots did not own the disputed area.

After the Hobart decision, the town paved and maintained roads in Nantasket Beach, including most of Beach Avenue. The court found that this amounted to a change of po­sition by the town, in reliance on the earlier SJC decision, falling within the second ex­ception to retroactive application of the der­elict fee statute.

The court was not persuaded by the Ferr­aras’ argument that the town never changed its position as to the disputed area because the town did not develop it as a road.

One Appeals Court judge dissented from the decision. He would have applied the stat­ute retroactively to uphold the land court’s judgment for the Ferraras, despite the trans­fer of Beach Avenue to the town in 1913.

He also observed that the town’s paving and maintenance of public ways is a munici­pal activity independent of ownership of land beneath the ways. That activity was not sufficient reliance on the 1915 SJC decision for the exception to the statute’s retroactiv­ity to apply.

Earlier this month, the Supreme Judicial Court allowed the Ferraras’ application for further appellate review. This case is not over yet.

Download the article as seen in Banker & Tradesman on May 25, 2026. Learn more about Christopher R. Vaccaro.

Landlords Want to Ensure Compatibility Among Tenants

For commercial landlords and their retail tenants, shop­ping centers operate like ecosystems, with each retailer occupying its own ecological niche.

Successful centers typically have some stores that cover a lot of square footage and sell a wide variety of products at competi­tive prices, without specializing in any par­ticular line of merchandise.

These anchor tenants attract regional shop­pers who also patronize smaller stores that sell specific kinds of goods, such as house­hold furnishings, clothing, or pet supplies. Add some restaurants, specialty shops, and banking and financial establishments, and the resulting tenant mix can generate customers and sales, creating a win-win-win for the cen­ter’s developers, investors, and retail tenants.

Even Housing Can Be Restricted

To achieve this success, many retail ten­ants require landlords to prohibit or limit certain activities within the center.

Noxious uses such as composting centers and fireworks factories are clearly undesir­able and will be prohibited. But many val­ued, consumer-friendly uses are also rou­tinely banned from shopping centers.

Examples include schools, places of wor­ship, and fitness centers, which can contrib­ute to disruptive parking and traffic prob­lems. Even housing on nearby properties controlled by landlords is often restricted, because homeowners and residential ten­ants can file nuisance complaints about the noise, odors, lighting and rodents associated with shopping centers.

Landlords and tenants should not rely on local zoning laws to restrict undesirable uses at shopping centers. Zoning laws can be compromised by zoning amendments, variances and lax enforcement.

The most effective way to prevent un­wanted activities is through binding agree­ments added to leases and restrictive cove­nants, which give landlords and tenants legal rights to directly seek court orders en­joining problematic uses, without depending on local government action.

In addition to prohibiting noxious and other incompatible uses, major tenants usu­ally insist that shopping center leases grant them exclusive rights to operate their stores without competition from other tenants. Many retail leases include lengthy interlock­ing lists of prohibited uses, exclusive uses and permitted uses, designed to regulate which tenants can sell what products and services.

This can result in complicated and con­fusing regimes of exclusive use clauses in multiple leases, so retail landlords often must ask existing tenants for consents or waivers, before bringing in new tenants to fill vacant space.

Landlords Have Legal Options

When so-called “rogue tenants” disregard exclusives, many retail leases obligate land­lords to file suit and seek injunctive relief against the violators. Those leases fre­quently allow aggrieved tenants to claim rent abatements, liquidated damages or lease termination rights against landlords that fail to stop rogue tenants.

It can be frustrating for landlords when tenants with exclusives default, abandon their premises or “go dark” (that is, cease op­erations without relinquishing their space).

Landlords negotiating exclusives should reserve for themselves rights to terminate ex­clusives when tenants are not utilizing them, so the landlords can find other tenants will­ing to offer the goods and services that non-operating tenants cease to make available.

From the tenant’s perspective, exclusive rights must be vigilantly guarded, and ag­grieved tenants should promptly contest vio­lations. Specialty Retailers, Inc. v. Main Street, NA Parkade, LLC, decided by a fed­eral court in Massachusetts in 2011, is in­structive.

Specialty Retailers’ commercial lease pro­hibited its landlord from leasing more than 5,000 square feet in a North Adams shopping center to another tenant selling off-price merchandise. Despite this restriction, the landlord signed a lease with Label Shopper, an off-price retailer. Specialty Retailers ac­quiesced in this violation for 18 months, and even negotiated an amendment to its lease during that period, before taking action to enforce its exclusive.

A jury agreed that the landlord’s lease to Label Shopper breached Specialty Retailers’ exclusive, but found that Specialty Retailers waived its right to contest the breach be­cause it waited too long to contest Label Shopper’s operations.

Specialty Retailers asked the judge to set aside the jury verdict, arguing that its deci­sions on enforcing exclusives were made at its corporate headquarters in Houston, where its executives were unaware of the vi­olation. Specialty Retailers maintained that it lacked sufficient knowledge of the viola­tion to waive its exclusive.

The judge disagreed with that argument, observing that Specialty Retailers’ vice pres­ident of operations, district manager, and on-site personnel knew about Label Shop­per’s business activities long before object­ing. Therefore, the jury could attribute their knowledge to Specialty Retailers as a corpo­rate entity. The judge upheld the jury’s ver­dict on the waiver issue.

The lesson here is that national retailers with faraway corporate offices should make sure they have local eyes on the ground to monitor compliance with exclusives. If re­tail tenants snooze, they can lose.

Download the article as seen in Banker & Tradesman on April 27, 2026. Learn more about Christopher R. Vaccaro.