The plaintiff, Everett Ashton, owns a manufactured housing park in Concord. The tenants in the park own their manufactured homes and rent individual lots. They tenants pay the property taxes and are billed directly by the city for water and sewer services, using individual meters placed on each lot. Three of the park tenants abandoned their homes without paying property taxes. The plaintiff obtained writs of possession, and the city condemned the homes. The plaintiff then applied for demolition permits, but the city refused to issue the permits until the property taxes were paid. The city granted a partial abatement, but the park owner refused to pay any property taxes on the homes. The city executed tax liens on all three homes, and a lien for unpaid water bills on one. The plaintiff sued the city, arguing that a park owner is not responsible for unpaid property taxes or water/sewer bills on individual homes, and, therefore, that the city could not withhold the demolition permits. The trial court ruled that the city must issue the demolition permits, that the city could not lien the park owner’s real estate for the unpaid water bills, and that the city owed compensation and attorney fees to the plaintiff for a regulatory taking.
Although the New Hampshire Supreme Court held that the city must issue the demolition permits for these homes, the Court also held: (1) a municipality has discretion in determining whether to issue a demolition permit where there are unpaid taxes and (2) a municipality may place a lien for water/sewer on the property of the manufactured housing park owner.
The Court said that by using the word “may” in RSA 205-A:4-a, VII, the legislature intended to give municipalities the discretion to permit or prohibit relocation of manufactured homes “in the event the proceeds from the sale [of those homes] are insufficient to pay” outstanding taxes. However, whenever a municipality exercises discretion, it must not do so in an abusive or arbitrary manner. Here, the Court determined that the city’s refusal to issue the demolition permits was an abuse of discretion because park owners are not liable for the property taxes of the manufactured housing under RSA 73:16-a, and by not allowing these valueless homes to be moved, the city was holding the park owner “hostage” and contradicting the meaning of RSA 73:16-a.
With regard to the water lien, the Court determined that nothing in RSA 205-A:6, II prevents a municipality from placing a lien on the park owner’s property pursuant to RSA 38:22, II(d). Even though the statute allows the park owner to install utility meters on the individual homes, as the plaintiff had done here, the statute does not go on to say that the individual metering nullifies the park owner’s responsibility if the bills are unpaid. Furthermore, the definition of “real estate” in RSA 38:22, II(d) includes both the manufactured homes and the real property on which the homes sit. Therefore, even though a park owner may shift responsibility to the homeowner for payment of the water bills under RSA 205-A:6, II, the municipality retains the ability to lien both the manufactured home and the manufactured housing park under RSA 38:22, II(d). Finally, the Court held that the refusal to issue the demolition permits did not create a regulatory taking of the plaintiff’s property. Although the Court found that the city acted outside the bounds of its discretion, the misapplication of a valid statute does not create a regulatory taking.