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NO. 125. AN ACT RELATING TO RECORDING OF INSTRUMENTS AND DOCUMENTS REQUIRED TO DETERMINE MARKETABILITY OF RECORD TITLE.

(S.232)

It is hereby enacted by the General Assembly of the State of Vermont:

Sec. 1. 24 V.S.A. § 1154 is amended to read:

§ 1154. RECORDS; *[PHOTOSTATS]* PHOTOCOPIES

(a) A town clerk shall record in the land records, at length or *[may insert a photostatic copy duly compared with the original instrument]* by accurate, legible photocopy, in books to be furnished by the town*[,]*:

(1) deeds,

(2) instruments*[,]* or evidences respecting real estate,

(3) writs of execution, other writs or the substance thereof, and the returns thereon,*[ and other instruments which are delivered to him for record, including:]*

(6) other instruments delivered to the town clerk for recording.

(b) The town clerk shall record in the land records a memorandum or notice of a municipal permit, or a statement, or a notice of violation, which is delivered for recording as described below:

(1) municipal permits relating to land, structures, and other improvements to the land, including zoning, planning, subdivision, site plan, health, street, building, or other municipal permits or approvals required by statute, ordinance or regulation to be recorded, minutes of meetings that relate to municipal permits, and permit amendments,

(2) certificates of occupancy, certificates of compliance or similar municipal certificates,

(3) any notice of violation of any municipal permit, approval, condition or certificate, and

(4) written statements of an appropriate authorized municipal officer, issued on request of a party, certifying that no municipal permit, including a certificate, zoning,building, highway access, health or other permit or approval is required for a specific property.

(c) If a municipal memorandum or notice is recorded, it shall list:

(1) as grantor, the owner of record title to the property at the time the permit, certificate or notice is issued;

(2) as grantee, the municipality issuing the permit, certificate or notice;

(3) the municipal or village office where the original, or a true, legible copy of the permit, certificate, statement or notice may be examined;

(4) whether an appeal of such permit, certificate or notice has been taken;

(5) tax map lot number or other description identifying the lot.

Sec. 2. 24 V.S.A. § 1161 is amended to read:

§ 1161. GENERAL INDEX

(a) A town clerk shall keep a general index of transactions affecting the title to real estate wherein he or she shall enter in one column, in alphabetical order, the name of the grantor to the grantee and, in a parallel column, the name of the grantee from the grantor, of every deed, conveyance, mortgage, lease or other instrument affecting the title to real estate, and each writ of attachment, notice of lien or other instrument evidencing or giving notice of an encumbrance on real estate which is filed or recorded in *[his]* the town clerk's office, with the name of the book *[or]*, volume or other manner of recording and the page of record in the following form:

Book Grantor Page Book Grantee Page

to from

Grantee Grantor

1 A. to B. 1 1 B. from A. 1

_______________________________________________________________

If the instrument is executed on behalf of, or to convey the interest of another party, the same shall be indexed in the name of the other party as grantor. In case the instrument isexecuted by more than one grantor and to more than one grantee, the name of each grantor and each grantee shall be indexed. When the party is a natural person the name shall be indexed under the first letter of such person's surname, and when the party is a corporation the name shall be indexed under the first letter of the first word of its name disregarding articles and initials. For purposes of this section, a defendant against whose property a writ of attachment is filed or a person against whose property a lien is asserted, shall be considered a grantor, and a plaintiff filing a writ, or a person asserting a lien shall be considered a grantee. Land plats filed in the office shall be indexed in such manner as the public records director shall by rule prescribe. The general index may be kept electronically.

(b) For the purposes of this section, "transactions affecting title to real estate" shall include the instruments described in subsections 1154(a) and (b) of this title. Each owner of record title to the property at the time such an instrument is issued shall be listed as the grantor. The state of Vermont shall be listed as the grantee for instruments described in subdivisions 1154(a)(4) and (5) of this title. The municipality issuing the instrument shall be listed as the grantee for instruments described in subdivisions 1154(b)(1) and (2) of this title.

Sec. 3. 24 V.S.A. § 4443 is amended to read:

§ 4443. ZONING PERMITS AND CERTIFICATES OF OCCUPANCY

(a) Within any municipality in which any zoning regulations have been adopted:

(1) No land development may be commenced within the area affected by such zoning regulations without a permit therefor issued by the administrative officer. No zoning permit may be issued by the administrative officer except in conformance with such zoning regulations.

(2) If the zoning regulations so adopted so provide, it shall be unlawful to use or occupy or permit the use or occupancy of any land or structure, or part thereof created, erected, changed, converted, or wholly or partly altered or enlarged in its use or structure after the effective date of this chapter, within the area affected by such zoning regulations, until a certificate of occupancy is issued therefor by the administrative officer stating thatthe proposed use of the structure or land conforms to the requirements of such zoning regulations.

(3) No zoning permit issued pursuant to this section shall take effect until the time for appeal in section 4464(a) of this title has passed, or in the event that a notice of appeal is properly filed, such permit shall not take effect until final adjudication of said appeal.

(b) Each zoning permit issued under this section shall contain a statement of the period of time within which an appeal may be taken. Within three days following the issuance of a zoning permit, the administrative officer shall:

(1) Deliver a copy of the permit to the listers of the municipality; and

(2) Post a copy of the permit in at least one public place in the municipality until the expiration of fifteen days from the date of issuance of the permit.

(c) Within 30 days after a municipal permit relating to land, structures, and other improvements to land, including a zoning, planning, subdivision, site plan, health, street, building or other municipal permit, certificate of occupancy, certificate of compliance or similar certificate has become final or within 30 days of the issuance of any notice of violation, the appropriate municipal official shall deliver a notice of violation or memorandum or notice of recording to the town clerk for recording as provided in subsection 1154(a) or (b) of this title. The municipal officer may charge the applicant for the cost of the recording fees as required by law.

Sec. 4. 24 V.S.A. § 4496 is added to read:

§ 4496. ENFORCEMENT; LIMITATIONS

(a) An action, injunction or other enforcement proceeding relating to any zoning, planning, street, subdivision, site plan, health or building permit or approval, or certificate of occupancy, or certificate of compliance, or other municipal land use permit or approval required by statute, ordinance or bylaw may be instituted under section 1974a, 4444 or 4445 of this title against the current owner or occupant, or both, of any street, building, structure or land for any violation if:

(1) the current owner or occupant is the person who first created the violation; or

(2) the action, injunction or other enforcement proceeding is instituted in connection with a notice of violation properly recorded and indexed in the land records of the town prior to the time the owner acquired title to or the occupant began occupancy of the street, building, structure or land; or

(3) the action, injunction or other enforcement proceeding is instituted within 10 years from the date the alleged violation first occurred and not thereafter, except that in the case of violations alleged to have first occurred after June 30, 1988 and prior to the effective date of this section, the action shall be commenced within six years of the effective date of this section and not thereafter. The burden of proving the date the alleged violation first occurred shall be on the current owner or occupant; or

(4) the action, injunction or other enforcement proceeding is instituted to abate or remove a hazard to human health or public safety or to abate or remove an undue environmental impact.

(b) Nothing in this section shall prevent any action, injunction or other enforcement proceeding against the person who first created the violation, whether or not the person is the current owner or occupant.

(c)(1) As used in this section, "person" means:

(A) an individual, partnership, corporation, association, unincorporatedorganization, trust or other legal or commercial entity, including a joint venture or affiliated ownership;

(B) a municipality or state agency; or

(C) individuals and entities affiliated with each other for profit, consideration, or any other beneficial interest derived from real estate.

(2) The following individuals and entities shall be presumed not to be affiliated with a person for the purpose of profit, consideration or other beneficial interest within the meaning of this section, unless there is substantial evidence of an intent to evade the purposes of this section:

(A) a stockholder in a corporation shall be presumed not to be affiliated with a person, solely on the basis of being a stockholder if the stockholder owns, controls or has a beneficial interest in less than five percent of the outstanding shares in the corporation;

(B) an individual shall be presumed not to be affiliated with a person, solely for actions taken as an agent of another within the normal scope of duties of a court appointed guardian, a licensed attorney, real estate broker or salesperson, engineer or land surveyor, unless the compensation received or beneficial interest obtained as a result of these duties indicates more than an agency relationship;

(C) a seller or chartered lending institution shall be presumed not to be affiliated with a person, solely for financing all or a portion of the purchase price at rates not substantially higher than prevailing lending rates in the community.

Sec. 5. 27 V.S.A. § 612 is added to read:

§ 612. MUNICIPAL PERMITS

Notwithstanding the majority decision in Bianchi v. Lorenz (1997), for land development, as defined in 24 V.S.A. § 4303(3), that commenced prior to the effective date of this section, no encumbrance on record title to real estate or effect on marketability shall be created:

(1) by the failure to obtain any required municipal permit, including any zoning, planning, subdivision, site plan, health, street or building permit; or

(2) by the failure to obtain any required certificate of occupancy, certificate of compliance or similar certificate; or

(3) by the failure to record such a permit or certificate; or

(4) by a violation with respect to which the municipality is limited from instituting an action, injunction or other enforcement proceeding pursuant to 24 V.S.A. § 4496.

Sec. 6. 24 V.S.A. § 4406(1) is amended to read:

(1) Existing small lots. Any lot in individual and separate and non-affiliated ownership from surrounding properties in existence on the effective date of any zoning regulation, including an interim zoning regulation, may be developed for the purposes permitted in the district in which it is located, even though not conforming to minimum lot size requirements, if such lot is not less than one-eighth acre in area with a minimum width or depth dimension of forty feet.

(A) If such lot subsequently comes under common ownership with one or more contiguous lots, the lot shall be deemed merged with the contiguous lot for purposes of this chapter. However, such lot shall not be deemed merged and may be separately conveyed, if:

(i) the lots are conveyed in their preexisting, nonconforming configuration; and

(ii) on the effective date of any zoning regulations, each lot had been developed with a water supply and wastewater disposal system; and

(iii) at the time of transfer, each water supply and wastewater system is functioning in an acceptable manner; and

(iv) the deeds of conveyance create appropriate easements on both lots for replacement of one or more wastewater systems in case a wastewater system fails, which means the system functions in a manner:

(I) that allows wastewater to be exposed to the open air, pool on the surface of the ground, discharge directly to surface water, or back up into a building or structure unless the approved design of the system specifically requires the system tofunction in such a manner;

(II) so that a potable water supply is contaminated or rendered not potable;

(III) that presents a threat to human health; or

(IV) that presents a serious threat to the environment.

(B) If, subsequent to separate conveyance, as authorized under subdivision (1)(A) of this section, a wastewater system fails, the owner shall be required to obtain from the secretary of natural resources a wastewater permit as required under the subdivision regulations or a certification that the wastewater system has been modified or replaced, with the result that it no longer constitutes a failed system.

Sec. 7. STUDY COMMITTEE ON COMPUTERIZATION OF VERMONT'S LAND RECORDS

(a) A Committee is established to study computerization of Vermont's land records. The Committee shall consist of the Vermont Secretary of State, or a designee; one representative each of the Vermont League of Cities and Towns and the Vermont Bar Association; two representatives from the Vermont Municipal Clerks and Treasurers'Association who are currently serving as town clerks, one from a municipality with a population of more than 10,000 persons and one from a municipality with a population of less than 10,000 persons; and the state archivist.

The Secretary of State or the Secretary's designee shall convene the first meeting of the Committee.

(b) The Committee shall study the feasibility, cost, obstacles, and ways in which to computerize Vermont's land records in the towns so that Vermont land titles may be more easily, more reliably, and less expensively searched. The Committee shall obtain information on similar efforts outside Vermont to index and make available land records using computer databases. The Committee shall consider, among other options, the following:

(1) The creation of form deeds and mortgages to identify encumbrances on title such as easements, reservations, and options;

(2) The need for authorized electronic signatures;

(3) Mechanisms for financing such a town computerized land records system.

(c) The Secretary of State shall provide staff support to the Committee. The Committee shall report its findings and recommendations, including budget and finance proposals by January 15, 1999, to the House Committees on Government Operations and on Local Government, and the Senate Committee on Government Operations.

Sec. 8. EFFECTIVE DATE AND IMPLEMENTATION

This section and Secs. 5, 6 and 7 shall take effect upon passage; Secs. 1-4 shall take effect July 1, 1998. Upon passage, the secretary of state shall notify appropriate municipal officials of the requirements of this act.

Approved: April 27, 1998