Section 18D. For the purposes of this section, it is hereby declared the public policy of the commonwealth to permit the creation of condominiums within project areas by corporations authorized to undertake projects under this chapter as an additional means of development of property for the purposes of eliminating blighted, open, decadent or substandard conditions in certain areas of the commonwealth and promoting the construction, maintenance and operation in such areas of needed decent, safe and sanitary residential and recreational structures, including units of housing for low income persons and families. In recognition of the fact that the purposes stated herein can be greatly aided by the provisions of this chapter it is further declared the public policy of the commonwealth to permit the sale of units of a condominium so created and, for a limited duration, the transfer of certain benefits under this chapter including exemption from taxation and betterments, to the purchasers of such units, as an additional means of stimulating the investment of private capital in such areas, including the construction, operation, management and maintenance therein of housing for low income persons and families.

Any entity authorized to undertake or acquire projects under this chapter may, with the approval of the housing board and subject to the provisions of this chapter, submit the land constituting a project or a portion or portions of a project to the provisions of chapter one hundred and eighty-three A for the purposes of creating one or more condominiums. Except as otherwise provided hereunder, the provisions of chapter one hundred and eighty-three A shall govern the creation and establishment of the condominiums and the rights and obligations of the unit owners and the organization of unit owners thereof. Any such condominium authorized under this chapter shall be for residential purposes only.

No units of rental housing constructed as part of an approved project under this chapter may be converted to condominiums pursuant to this section.

Not more than fifty per cent of the residential units of any project authorized under this chapter shall be condominium units and for each condominium unit authorized for a project, the corporations shall be obligated, by written agreement with the housing board, to construct, manage, operate and maintain within the project area an equal number of units of rental housing as determined on either a per unit basis or on the basis of the aggregate number of bedrooms contained or to be contained in each such category of housing. Such agreement shall further provide that the corporations shall construct the units of rental housing in the manner and within the period of time approved by the housing board on the basis of the application submitted pursuant to this section with such modifications or changes therein as the housing board may reasonably determine to be necessary.

The housing board shall require that twenty-five per cent of the units of rental housing required within a project area under this section be for low income persons and families, provided, however, that not more than one half of said units of housing for low income persons or families may, for the purposes of compliance with the requirements hereunder, be for housing for elderly persons under applicable state or federal programs, including projects financed by the Massachusetts Housing Finance Agency. The number of units of low rent housing required hereunder shall be reduced by the number of condominium units within the project area which are financed by the Massachusetts Housing Finance Agency for low income persons or families, including units purchased by such persons with assistance from the Resident Ownership Fund of the Massachusetts Housing Finance Agency or leased by the housing authority of such city or town or the housing board to such persons in accordance with applicable state or federal programs. On or before the first day of March in each year, the housing authority of the city or town in which the project is located or the Massachusetts Housing Finance Agency as to units of housing financed by it, shall certify to the housing board that the corporation is in compliance with the terms of the agreement required pursuant to this section. If there is no housing authority in such city or town the housing board shall make the determination of compliance with respect to units, other than those to be certified by the Massachusetts Housing Finance Agency.

The required number of low income units may be waived or modified, in whole or part, by the housing board if the housing board finds that the waiver or modification is reasonable in view of the regional need for low income housing and that low income housing exists within the city or town in which the project area is located in excess of twenty per cent of all housing units reported in the latest federal decennial census of the city or town or that low or moderate income housing within said city or town is located on sites comprising in excess of one and one half per cent of all land area zoned for residential, commercial or industrial use, and if the housing board finds that, in addition to the proposed condominium units, the project area contains, or is proposed to contain, or the project has been developed or is proposed to be developed in conjunction with other projects in said city or town which contain, one or more of the following categories of facilities and improvements: (a) housing or facilities designed for the servicing of the specific needs of handicapped persons; (b) commercial or industrial development which shall result in the employment of persons residing in or near the project or minority persons; (c) provisions for open space which shall generally be available to the public; (d) provisions for community recreational facilities; (e) development of facilities for cultural events or public meetings; (f) restoration or rehabilitation of structures or sites of architectural or historic merit, when such structures or sites are in the National Register of Historic Places or are in the Inventory of Historic Assets of the Commonwealth and when such inventoried structures or sites are certified by the Massachusetts Historical Commission, and when any such registered or certified structures or sites are coupled with the development of facilities which contribute to public understanding and appreciation of their significance. For the purposes of this section, low income housing shall be all housing subsidized by the federal or state government under any program to assist the construction of low or moderate income housing as defined in the applicable federal or state statute, whether built or operated by any public agency or any non-profit or limited dividend corporation including without limitation housing for persons and families of low income as provided under chapter one hundred and twenty-one B of the general laws, whose annual income is equal to or less than the maximum amount which would make them eligible for units owned or leased by the housing authority in the city or town within which the project is located, or, in the event that there is no housing authority that amount which is established as the maximum for eligibility for low rent units by the housing board or the Massachusetts Housing Finance Agency, with respect to low income units financed by it. Said finding shall be made in writing and shall be considered part of the project area plan.

A corporation seeking authority to create a condominium pursuant to this section shall submit an application to the housing board as hereinafter provided.

In such application the applicant shall designate the parcel upon which the condominium is proposed to be constructed, shall describe in general terms, and by plans where feasible, the proposed buildings, structures or facilities which are to constitute the proposed condominium, shall indicate the proposed number of units to be contained therein, shall furnish copies of all proposed instruments which are necessary to establish the condominium pursuant to chapter one hundred and eighty-three A, and shall furnish such information concerning the intended use, occupancy and operation of the condominium as may be required pursuant to chapter one hundred and eighty-three A, or as the housing board may reasonably request. In addition the applicant shall designate the parcel or parcels upon which the units of rental housing required under this section are proposed to be constructed and the general location on said parcel and proposed size of each building in which such units are to be located, shall describe in reasonable detail the number and size of said units and the proposed method or program under which funds for the construction and operation of such units are to be obtained or otherwise made available, and shall set forth in reasonable detail the proposed construction schedule with respect thereto.

If the proposed condominium is a project or a portion of a project for which initial approval and authority is sought pursuant to other sections of this chapter and not a previously approved project or portion thereof, the information to be furnished in the application required pursuant to this subsection shall be contained in the application required pursuant to section five, and shall be in addition to such other information as may be required therein.

If the housing board shall determine that the proposed condominium will not significantly affect the objectives, standards, requirements or restrictions as to use, construction or design as set forth in the plan for the original project as authorized and approved, or the particular portion thereof within which the condominium is to be created, or any approved amendments or modifications thereof, and that the proposed condominium will constitute a public use and benefit, it shall grant such authority conditioned upon the execution of the agreement between the applicant and the housing board for the construction of rental units, the execution of an agreement between the applicant and the housing board for the establishment of a guaranty fund out of a portion of the proceeds from the sale, exchange, or transfer of the units of the condominium, and the execution of a regulatory agreement between the housing board and the organization of unit owners of the condominium. On determination of compliance with the foregoing conditions, the housing board shall issue a certificate to this effect, which certificate shall be recorded in the appropriate registry of deeds or land registration office, and may be conclusively relied upon by any purchaser or mortgagee of any unit of the condominium so approved and any other person dealing with the condominium, the organization of unit owners or any unit owner as to the grant of authority and the compliance of conditions in accordance with the provisions hereof.

If the housing board shall determine that the proposed condominium will significantly affect the objectives, standards, requirements or restrictions as to use, construction or design as set forth in the plan for the original project, or portions thereof, as authorized and approved, or if the proposed condominium is a project or a portion of a project for which initial approval is sought pursuant to other sections of this chapter or is located on land constituting a project or portion of a project previously approved but which did not provide, as part of the plan upon which such original approval was granted, for a condominium thereon, the application shall be transmitted to the appropriate officials of the city or town in which the project is located for approval and the procedure governing such approval shall be in accordance to that set forth in section six, but with such modification in procedure as the housing board determines to be appropriate for the accomplishment of the purposes of this section.

Upon the creation of a condominium as authorized under this section, the organization of unit owners of such condominium shall be deemed an authorized entity under this chapter, serving a public purpose, and for such period of time as such designation shall remain in effect, as hereinafter provided, such organization shall, for the benefit of the unit owners, their heirs, successors and assigns, have all the powers, privileges, benefits and exemptions and be subject to all of the obligations of a corporation authorized under section three or under section eighteen C, as the case may be, except as otherwise provided herein. Included within the scope of the exemption from taxation and from betterments and special assessments applicable to the organization of unit owners and its property pursuant to section ten of this chapter and this section are all units of the condominium and their respective interests in the common areas and facilities thereof. Nothing contained herein, however, shall be deemed to authorize or empower the organization of unit owners or any individual unit owner to take property by eminent domain.

The powers, privileges, benefits and exemptions of a corporation conferred and the obligations and duties of such corporation imposed by this chapter including those conferred or imposed by contracts or agreements executed in accordance with section six A and this section, shall remain in effect with respect to all the units and common areas and facilities of the condominium, and the designation of the organization of unit owners as an authorized entity shall continue for a period not to exceed the lesser of (a) such period as may be specified in the contract or agreement executed in accordance with section six A, provided such period does not exceed five years or such lesser number of years as may be agreed upon, and further provided that such five years or lesser period may include a phased reduction of the extent of exemption of taxation, (b) the removal of the condominium from the provisions of chapter one hundred and eighty-three A in accordance with the provisions thereof, or (c) such time as a material breach of the regulatory agreement by the organization of unit owners shall have been committed and shall not have been cured to the satisfaction of the housing board, within a reasonable period of time after notice thereof. Thereafter all unit owners and the organization of unit owners of such condominium shall no longer be subject to the obligations of this chapter except as to any liability theretofore incurred, nor enjoy the powers, privileges, benefits and exemptions of an authorized entity hereby granted.

The organization of unit owners of the condominium shall execute and deliver a regulatory agreement with the housing board, pursuant to which the organization shall agree, for such time as it and the unit owners shall enjoy the benefits of this chapter, to comply with the provisions contained in section eight, and to pay, as hereinafter provided, the excise under the formulae and provisions set forth in section ten and this section and such additional amounts in lieu of taxes as may be required pursuant to any contract or agreement executed in accordance with section six A. The regulatory agreement shall be recorded in the appropriate registry of deeds or land registration office and shall run with the land and shall be binding on the heirs, successors and assigns of the unit owners as hereinafter provided. For the purposes of this section, the excises and sums prescribed under section ten shall be deemed in lieu of taxes assessed and levied upon the real and personal property of the organization of unit owners and of any unit owner and his interest in the common areas and facilities thereof; gross income under the formula set forth in section ten shall mean only such income as is actually received; and such excises and sums prescribed under section ten, together with the amounts payable pursuant to section six A shall be apportioned to and payable by each unit owner in accordance with each such unit's respective interest in the common areas and facilities of the condominium. For the period provided in this section, the organization of unit owners shall collect from each unit owner and transmit for payment to the appropriate taxing authority the amounts payable by each such unit owner hereunder. All provisions of chapters fifty-nine and sixty relative to the collection and payment of taxes, including liens and penalties, shall be enforceable by the taxing authority against each such unit owner and each such unit, and its interest in the common areas and facilities of the condominium, but only as to each such unit owner's respective share of any such payment or payments, and any lien of such taxing authority provided by law therefor shall attach to such unit in proportion to the percentage of its undivided interest in the common areas and facilities.

The creation and establishment of the condominium and the exercise by each unit owner of such condominium and by the organization of unit owners of such condominium of all rights and powers and the performance by each such owner and by the organization of unit owners of all obligations set forth in any and all instruments executed in connection with the creation and establishment of the condominium, in any and all instruments benefiting, encumbering or otherwise affecting or relating to the condominium or the transfer of title to, or grant of a mortgage, security interest or other interest in any unit thereof, and any instrument executed in accordance with this section, shall not be invalidated, expanded or restricted by reason of any breach by the corporation creating the condominium of, or failure by such corporation to comply with, the provisions of either or both of the agreements required to be executed nor by reason of the termination of the designation of the organization of unit owners as an authorized entity, except with respect to the powers, privileges, benefits and exemptions of such entity under this chapter as provided herein.

Upon the creation of a condominium as authorized under this section, the corporation authorized to create the condominium shall have the power to sell, exchange, or otherwise transfer for fair market value the units of the condominium to any person, subject to the provisions of chapter one hundred and eighty-three A, provided, however, that the corporation creating the condominium shall not be authorized to lease any unit of the condominium as rental housing, except and to the extent and for such duration as may be authorized by the housing board.

Upon the sale, exchange or transfer of the units of a condominium authorized under this section, the corporation authorized to create the condominium shall be entitled to distribute as a dividend, or, if an insurance company or bank, to receive or accept for general purposes as provided in section eighteen, from time to time amounts not to exceed, in the aggregate, the amount invested in the condominium as such term is hereinafter defined.

The corporation authorized to create a condominium in accordance with this section shall be obligated by written agreement with the housing board to retain and invest the profit as such term is hereinafter defined from the sale, exchange or transfer of the units of the condominium as a guaranty fund for the purposes hereinafter set forth. The guaranty fund shall be separately held and invested as a reserve account to be used for the payment of expenses or operating deficit incurred in connection with units of rental housing required pursuant to this section, provided, however, that the existence or availability of such fund shall not be considered in determining the eligibility of the corporation or the project, or portion thereof, or any resident therein, for financial or other assistance under any applicable state, federal or other program, with respect to any low income rental units required by this section, it being the intent hereof that such corporation, project, or resident be entitled to the benefit of any program for which it would otherwise have been eligible had no guaranty fund been applicable. All or any portion of the guaranty fund may be invested in term deposits and certificates of deposit of, and, if and to the extent otherwise permitted by law, in savings accounts in any trust company, savings bank, co-operative bank or banking company organized under the laws of the commonwealth or national banking association or savings or loan association doing business within the commonwealth, or in obligations of or unconditionally guaranteed by the United States or in legally issued and assumed or unconditionally guaranteed obligations of the commonwealth or any city, town, district or subdivision, agency or authority thereof.

In the event that a waiver or modification of the number of low income units required by this section has been granted pursuant to this section, the housing board shall require that the guaranty fund be separately held and invested as set forth above as a reserve account to be used for the payment of expenses or operating deficit incurred in connection with any units of rental housing which are constructed by the authorized entity within the project areas, provided, however, that the housing board may, pursuant to uniformly applied rules and regulations, require that a portion of said guaranty fund be held and invested as a reserve account to be used for the payment of expenses or operating deficit with respect to the additional facilities and improvements of the type described in this section and required as a condition for waiver which are located within the project area, as further provided by this section.

The corporation shall be entitled to distribute as a dividend or, if an insurance company or bank, to receive or accept for general purposes in accordance with section eighteen of this chapter in each year (a) all net income from the guaranty fund, and (b) so much of the principal of such fund as is equal to the deficiency, if any, between the dividend distributed or amount accepted or received in any such year by the corporation with respect to rental housing or with respect to any such additional facilities and improvements of the type described in this section and required as a condition for waiver as are located within the project area, and the maximum amount allowable as a dividend pursuant to section nine or to be received or accepted pursuant to section eighteen, as the case may be, in any such year, provided however that the total distribution from the fund in any one year, excepting payments made under clause (a), shall not exceed ten per cent of the amount of profit originally invested in the fund, and provided further, however, that no distribution of principal of the fund shall be made until after completion of construction of the low income rental or low income condominium units required under this section.

If the project as authorized and approved consists of more than one condominium, the profit shall be determined on the basis of all condominium units sold, exchanged or transferred and the amount to be retained as a guaranty fund shall consist of the profit from the sale, exchange or transfer of all condominium units within the project area. Applications of the guaranty fund may be made to any operating deficit or expense applicable to rental housing anywhere within the project area, without apportionment as to the source of the profit then constituting such fund.

At the expiration of forty years from the date of approval of the project, the corporation shall be entitled to distribute as a dividend or receive or accept for general purposes, the entire undistributed income and principal of the guaranty fund, if any.

For the purposes hereof, the ''amount invested in the condominium'' shall mean the proportionate share of all costs and expenses incurred or accrued in connection with the project, or portion thereof, in which the condominium is located, which is attributable to the condominium in accordance with generally accepted accounting principles, including, without limitation, construction costs, including job overhead, architectural, engineering, legal and accounting costs, organizational expenses, land value, interest and financing charges, cost of landscaping, site improvements and a reasonable profit to the general contractor which may include a risk allowance, whether or not such costs have been paid in cash or in a form other than cash. The costs and expenses constituting the amount invested in the condominium shall include the payment or accrual of any fees or charges to an independent contractor or to a subsidiary, affiliate or other entity related to the corporation for development, construction, brokerage or other such services performed for the corporation with respect to the construction of the condominium and the marketing of the units thereof. The housing board shall, pursuant to regulations adopted by it, establish the amount invested in the condominium upon completion of the building and other improvements constituting the condominium and the sale or transfer of units to unrelated purchasers constituting at least seventy per cent of the ownership of the common areas and facilities thereof, which amount shall remain constant thereafter.

For the purposes hereof, ''profit'' shall mean the proceeds of the sale, exchange or transfer of the units less the sum of the amount invested in the condominium, as defined, herein, any related costs and expenses reasonably attributable to any such sale, exchange or transfer, and all state, federal and other taxes and excises applicable to any gain derived therefrom.

Notwithstanding the provisions of this chapter to the contrary, any unit owner of a condominium succeeding to the interest of the corporation establishing the condominium under this section may freely transfer, encumber, own, use and enjoy his unit and the common areas and facilities of the condominium to the fullest extent permitted by law, subject to the terms and conditions contained in the regulatory agreement executed in accordance with this section and any contract or agreement executed in accordance with section six A which is binding upon and inures to the benefit of the organization of unit owners; except that neither the organization of unit owners nor any individual unit owner shall be authorized to lease, acquire, sell, exchange, give, grant or otherwise transfer air rights in any unit or in the common areas and facilities of the condominium, but the foregoing limitation shall not prohibit the granting of easements in, upon or over the land or other common areas and facilities of the condominium. If any unit is sold, exchanged or transferred by a unit owner during the period in which the benefits and obligations of this chapter are applicable to the unit and common areas and facilities of the condominium and the organization of unit owners of the condominium, any such sale, exchange or transfer shall be subject to and the grantee, donee or transferee including a mortgagee, or any purchaser or successor in interest of such mortgagee on account of a foreclosure of the mortgage, shall have the benefit of the provisions of this chapter, the regulatory agreement and any contract or agreement executed in accordance with section six A, to the same extent and for the unexpired period as applicable to the grantor, donor or transferor.

The corporation may sell, exchange or otherwise transfer any portion or portions of the project area on which any of the units of rental housing are to be constructed in compliance with the agreement required pursuant to this section to any person or entity or persons or entities to whom a transfer of a project is otherwise permitted in accordance with other provisions of this chapter, in which the corporation shall have an interest, provided, however, that (a) any such transfer is made subject to and in accordance with the provisions of this chapter, (b) the corporation shall remain liable, to the extent of the principal amount of the guaranty fund as it may from time to time be held by the corporation in accordance with this section, on account of all units of rental housing within the project area, including the units located on portions of the project transferred hereunder, which liability shall be in addition to any other liability which may be assumed or incurred by the original corporation by reason of an investment or interest in the transferee, and (c) no building containing rental housing, other than housing for the elderly shall be dedicated exclusively to low income units, unless otherwise approved by the housing authority of the city or town within which the project is located.