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ACT NO. 125

(S.232)

Marketability of Record Title

This act directly responds to the Vermont Supreme Court's majority decision in Bianchi v. Lorenz, issued on July 11, 1997. The act first requires town clerks to record in the land records the following documents which are delivered for recording: (1) a memorandum or notice of 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 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.

The act provides that if a municipal memorandum or notice is recorded, it shall list the owner as grantor, and the municipality as grantee. In the case of state permits, the state shall be listed as grantee. The act also provides that the general index may be kept electronically. The act provides that the appropriate municipal official shall deliver amemorandum or notice of recording or a notice of violation, within 30 days after a municipal permit relating to land, structures and other improvements to land has become final, or within 30 days of the date a certificate of occupancy or a certificate of compliance or similar certificate has become final, or within 30 days of the issuance of any notice of violation.

The act further provides that enforcement proceedings relating to any zoning, planning, subdivision, site plan, health, street, 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 24 V.S.A. §§ 1974a, 4444, or 4445 against the current owner or occupant if:

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

(2) the action is instituted in connection with a notice of violation properly recorded and indexed in the land records prior to the time the owner or occupant began occupancy; or

(3) the action is instituted within 10 years from the date the alleged violation first occurred, except that if the alleged violation first occurred after June 30, 1988 and prior to April 27, 1998, the action may commenced within six years of April 27, 1998; or

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

Nothing in the act prevents any enforcement proceeding from being instituted against the person who first created the violation. The act defines "person" broadly for purposes of limitations on enforcement, using language similar in most ways to the Act 250 definition of "person", and thereby limiting the extent to which individuals may avoid enforcement by manipulating title ownership.

This act also addresses the marketability of record title issue raised by the Bianchi decision. The act states that for land development that commenced prior to the effective date of the municipal permit section of the act, no encumbrance on record title to real estate or effect on marketability shall be created by the failure to obtain any required municipal permit; by the failure to obtain the required certificate of occupancy, certificate of compliance, or similar certificate; by the failure to record such permit or certificate; or by a violation with respect to which the municipality is limited from instituting an enforcement proceeding under 24 V.S.A. § 4496 (a section added by the act and explained in a preceding paragraph.)

The act addresses existing small lots that become merged upon coming under common ownership. It allows these lots to avoid merger and be separately conveyed if: (1) the lotsare conveyed in their preexisting, nonconforming configuration; and (2) on the effective date of any zoning regulations, each lot had been developed with a water supply and wastewater disposal system; and (3) at the time of transfer, each water supply and wastewater system is functioning in an acceptable manner; and (4) the deeds of conveyance create easements on both lots for replacement of wastewater systems in case a wastewater system fails. If, after conveyance, a wastewater system fails, the owner shall be required to obtain a wastewater permit under the subdivision regulations or obtain a certification from the secretary of natural resources that the system is no longer a failed system.

The act establishes a study committee on specified issues related to the computerization of Vermont's land records. The committee is to be staffed by the secretary of state, and is to report to specified legislative committees by January 15, 1999.

Effective Date: The section that provides that failure to obtain municipal permits does not create an effect on marketability, and the sections that relate to existing small lots and to the study committee on computerization of Vermont's land records take effect on April 27, 1998. The remaining sections take effect on July 1, 1998.