Legal Q & A: Condominiums and Land Use Controls
Condominiums have been around for several decades. By now most people understand that a condominium is not a type of apartment building, but a special system of real property ownership that includes individually owned "units" and areas owned in common by the unit owners ("common areas"). In New Hampshire condominiums are controlled comprehensively by RSA 356-B. Most municipal officials involved in land use control know that condominium developments can be regulated and are at least generally aware that municipalities are obligated to treat condominiums the same as other physically identical development projects. At the same time, there is uncertainty because condominiums do not fit the traditional dimensional criteria for land use controls, which are based on lots of determinate size and shape. Sometimes condominium units include discrete parcels of land, but more often their boundaries are defined by the walls, ceilings and floors of buildings. Frequently the common area is simply all the land, improvements and space that is not devoted to units. Condominium projects, therefore, may or may not include boundaries that are useful for administration of traditional land use controls. Moreover, RSA 356-B establishes some unique standards for application of land use regulations to condominiums.
Q. What does RSA 356-B specifically say about municipal land use controls?
A. RSA 356-B:5 provides:
No zoning or other land use ordinance shall prohibit condominiums as such by reason of the form of ownership inherent therein. Neither shall any condominium be treated differently by any zoning or other land use ordinance which would permit a physically identical project or development under a different form of ownership. No subdivision ordinance in any city or town shall apply to any condominium or to any subdivision of any convertible land, convertible space, or unit unless such ordinance is by its express terms made applicable thereto. Nevertheless, cities and towns may provide by ordinance that proposed conversion condominiums and the use thereof which do not conform to the zoning, land use and site plan regulations of the respective city or town in which the property is located shall secure a special use permit, a special exception, or variance, as the case may be, prior to becoming a conversion condominium. In the event of an approved conversion to condominiums, cities, towns, village districts, or other political subdivisions may impose such charges and fees as are lawfully imposed by such political subdivisions as a result of construction of new structures to the extent that such charges and fees, or portions of such charges and fees, imposed upon property subject to such conversions may be reasonably related to greater or additional services provided by the political subdivision as a result of the conversion.
Q. The statute says that subdivision regulations can be applied to condominiums. How does that work?
A. RSA 672:14, I defines "subdivision" as "the division of the lot, tract, or parcel of land into 2 or more lots, plats, sites, or other divisions of land for the purpose, whether immediate or future, of sale, rent, lease, condominium conveyance or building development…." This enables the planning board to apply subdivision standards to proposed condominium projects even where no new individual "lots" are proposed. For example, in Davis v. Barrington, 127 N.H. 202 (1985), the planning board was upheld in applying subdivision road standards to a project consisting of a single eight-unit apartment building. However, municipalities must be sure to adopt the power to regulate condominiums as subdivisions. The local definition of "subdivision" should expressly include the term "condominium conveyance," or the regulations should include the statutory definition by reference. Otherwise, the planning board will be deemed to have no subdivision jurisdiction over condominium projects. See Bussiere v. Roberge, 142 N.H. 905 (1998).
It is also comforting to know that the various devices for implementing and changing condominium projects under RSA 356-B do not provide a blanket exemption from subsequent regulation. In Windham v. Lawrence Savings Bank, 146 N.H. 517 (2001), after receiving planning board approval for a residential condominium, the developer submitted portions of the tract to the condominium in phases as the project was built out. The balance of the tract was designated "expandable land" under RSA 356-B, that is, land not in the condominium, but which could potentially be added to it. Eventually, the expandable land was foreclosed by the bank and sold to a third party without planning board approval. The bank argued that, because RSA 356-B allows the developer "limitless discretion in adding portions of the expandable land to the condominium, the town's subdivision regulations do not apply to the expandable land." The Court disagreed, holding that RSA 356-B is not "an alternative procedure for subdivision approval." See also Ryan James Realty, LLC v. Villages at Chester Condominium Ass'n, 153 N.H. 194 (2006).
Q. Are subdivision regulations all we need to regulate condominium development?
A. Not in all situations. For example, in Lemm Development Corp. v. Bartlett, 133 N.H. 618 (1990), the plaintiff received subdivision approval for a condominium project in 1986 and in 1988 applied for a building permit to build recreational facilities on common land. The Town argued that planning board approval was required, but the Court held that there was no planning board jurisdiction because there was no further "division of ownership or physical division of the land," and Bartlett had not adopted site plan review authority.
Site plan review does not cover every situation, either. Residential site plan regulation is limited to "the development or change or expansion of use of tracts for … multi-family dwelling units, which are defined as any structures containing more than 2 dwelling units…." RSA 674:43, I. Some residential condominium projects are composed of one- and two-family dwellings only or in combination with multi-family dwellings.
Q. Should the zoning ordinance address new condominium development?
A. As previously mentioned, condominiums often do not fit the mold for traditional land use controls. Zoning ordinances will specify minimum lot size, lot frontage and lot line setbacks for structures, and may prescribe only one principal structure per lot. These sorts of standards are difficult to apply to a condominium project with multiple units proposed for a single tract. Moreover, RSA 356-B:5 requires the proposed condominium project to be treated the same as "a physically identical project or development under a different form of ownership." One way to address this problem is to adopt, as an innovative land use control administered by special use permit under RSA 674:21, a set of zoning standards for clustered or other unconventional "planned residential development," which may or may not be in condominium form. These standards can address such items as the minimum distance between structures, setbacks from common driveways and overall density of development, all without reference to lots or lot lines. Feins v. Wilmot, 154 N.H. 715 (2007), illustrates the importance of attention to detail in adopting such measures. There the Town adopted cluster provisions that inadvertently failed to control overall development density, because there was no limit to the number of dwelling units permitted per multifamily building. The Town unsuccessfully claimed that the maximum density in the underlying residential district should apply. Seek advice from your planning consultant and municipal attorney.
Q. The statute also says that, in the case of nonconforming uses, municipalities have some authority to regulate the conversion of existing development to condominium ownership. How much control is there?
A. First of all, to regulate conversion condominiums, RSA 356-B:5 provides that there needs to be an ordinance that requires a special use permit, special exception or variance for condominium conversion. A line of Supreme Court decisions indicates that land use boards do not have a great deal of authority in this area. In Cohen v. Henniker, 134 N.H. 425 (1991), the plaintiff owned two apartment buildings that were a valid nonconforming use under the zoning ordinance. The planning board denied subdivision approval for the proposed condominium conversion on the grounds that the proposal did not comply with the zoning ordinance. There was no indication that the use of the property would change in any way. The Court overturned the board's decision, holding that, under both RSA 356-B:5 and the doctrine of nonconforming uses, the application could be denied "only if the condominium conversion would affect land use." In Dovaro 12 Atlantic, LLC v. Hampton, 158 N.H. 222 (2009), the Town claimed that the proposed condominium conversion of six apartments and a cottage from seasonal to year-round use could be denied because it would be a substantial expansion of the nonconforming use. But the Court held that there was no evidence that year-round occupancy would substantially affect the neighborhood, and the nature of the use itself would be the same. Finally, where a zoning ordinance expressly prohibited the condominium conversion of "tourist cabins" (which were defined as not dwelling units), the Court held that the ordinance was preempted by RSA 356-B:5, where no physical change was proposed and use would remain seasonal. Rye Bd. Of Selectmen v. Rye Zoning Bd. Of Adjustment, 155 N.H. 622 (2007).
Q. When a development proposal is made for a tract adjacent to a condominium, who in the condominium is an "abutter"?
A. RSA 672:3 provides in part: "For purposes of receipt of notification by a municipality of a local land use board hearing, in the case of an abutting property being under a condominium or other collective form of ownership, the term abutter means the officers of the collective or association, as defined in RSA 356-B:3, XXIII."
RSA 356-B:3, XXIII defines "officer" as "any member of the board of directors or official of the unit owners' association." However, for purposes of standing to appeal, Johnson v. Wolfeboro, 157 N.H. 94 (2008), held that a condominium owner, whose unit was situated within 200 feet of the boundary and 500 feet of the building in question, was "aggrieved" and could challenge a planning board decision in superior court, even though the condominium board of directors had voted not to oppose the application.
Local officials in NHMA-member municipalities may contact LGC's legal services attorneys for more information on this and other topics of interest Monday through Friday, 8:30 a.m. to 4:30 p.m., by calling 800.852.3358, ext. 384. School officials should contact the New Hampshire School Boards Association attorney at 800.272.0653.