In re Lowe

IN_RE_LOWE.94-421; 164 Vt 167; 666 A.2d 1178

[Filed 01-Sep-1995]

       NOTICE:  This opinion is subject to motions for reargument under
  V.R.A.P. 40 as well as formal revision before publication in the Vermont
  Reports.  Readers are requested to notify the Reporter of Decisions,
  Vermont Supreme Court, 109 State Street, Montpelier, Vermont 05609-0801 of
  any errors in order that corrections may be made before this opinion goes
  to press.


                                 No. 94-421


In re Appeal of Beverly Lowe, et al.              Supreme Court
(Town of Colchester, appellant)
                                                  On Appeal from
                                                  Chittenden Superior Court

                                                  March Term, 1995



Matthew I. Katz, J.

       Marsha Smith Meekins of Roesler, Whittlesey, Meekins & Amidon,
  Burlington, for appellant

       Philip C. Linton and Robert H. Rushford of Linton & Hobson, Williston,
  for appellees


PRESENT:  Gibson, Dooley, Morse and Johnson, JJ.


       DOOLEY, J.   The Town of Colchester appeals from the decision of the
  Chittenden Superior Court that Beverly and Debra Lowe (landowners) do not
  need a zoning or subdivision permit to convert rental camps on a lot near
  Lake Champlain to condominium ownership.  The town argues that the permit
  is required by the town's subdivision ordinance and that the ordinance is
  valid.  We affirm.

       The lot in question borders Lake Champlain and contains six
  single-family camps which have been rented in the past.  The lot does not
  conform to current zoning requirements because it contains multiple
  structures, some of which are too close to the lot boundary.  Landowners
  proposed to transfer legal title to each of the camps to purchasers, who
  would own a camp building and an undivided interest in the surrounding
  land.  The lot would not be subdivided; no change in the camps or their use
  is proposed.

       The town subdivision regulations define subdivision to include
  "condominiums and cooperatives for the purpose, whether immediate or
  future, of sale."  Based on these regulations, the Colchester zoning
  administrator decided that a subdivision permit was required before the

 

  condominium sale occurred, and this decision was upheld by the zoning
  board.  On appeal, however, the superior court held the zoning enabling act
  did not grant the town the power to regulate a change in the form of
  ownership without physical construction, alteration, or modification of the
  buildings or a change in use or occupancy.  It rejected the town's argument
  that the change in title is necessarily a change in use.

       The Vermont Planning and Development Act authorizes a municipality to
  adopt both zoning and subdivision regulations, see 24 V.S.A. § 4401(b), but
  contains no definition of subdivision.  The zoning authority of a
  municipality, however, extends to "land development" which is defined to
  include "the division of a parcel into two or more parcels."  Id. §
  4303(3).

       The town makes two arguments to support its contention that it has the
  authority to regulate condominium sales.   First, the town argues that the
  absence of a statutory definition for "subdivision" gives the town
  discretion to interpret the word's scope and meaning.  Second, the town
  argues that the definition of "land development," the requirement for
  zoning review, authorizes a municipality to regulate condominium sales. 
  Landowners, on the other hand, argue that no permit, whether zoning or
  subdivision, is required in this instance.

       In addressing the town's first argument, we do not see controlling
  significance in the fact that this dispute arose as a ruling that a
  subdivision permit, rather than a zoning permit, was required.  See
  Drumheller v. Shelburne Zoning Bd., 155 Vt. 524, 527 n.3, 586 A.2d 1150,
  1151 n.3 (1990).  In ruling on a subdivision request, the planning
  commission may require that the subdivided plots "at least comply with the
  requirements [of the zoning ordinance]."  24 V.S.A. § 4417(2).  The
  language suggests that the Legislature did not intend that there be
  instances where a subdivision permit was required even though there are no
  applicable zoning requirements.  See Vermont Agency of Transp. v. Mazza,
  161 Vt. 564, 565, 632 A.2d 363, 364-65 (1993) (mem.) (in construing
  statute, primary goal is to implement legislative intent). Nor would it
  make sense to require zoning review of a landowner's actions because it
  involves a subdivision but conclude that subdivision review is
  definitionally inapplicable.  In view of the interrelationship of zoning
  and subdivision regulation, we believe that the concept of subdivision

 

  should be the same for either regulatory scheme.  See Nash v. Warren
  Zoning Bd., 153 Vt. 108, 112, 569 A.2d 447, 450 (1989) (in statutory
  construction, look to whole statute, subject matter, effects and
  consequences); In re McCormick Management Co., 149 Vt. 585, 592, 547 A.2d 1319, 1324 (1988) (construe statutes that are part of same overall scheme
  in pari materia).

       For this reason, we reject the town's argument that the lack of a
  statutory definition for "subdivision" leaves a municipality free to define
  the term as it deems appropriate.(FN1)  Rather than part of a coordinated
  whole, this would create inconsistencies in the zoning and subdivision
  power.  We conclude instead that the Legislature's concept of a subdivision
  can be found within the definition of land development.

       Second, the town argues that the definition of land development is
  broad enough to authorize a municipality to regulate the conversion of
  rental units into condominium ownership. The argument is based on the full
  definition of land development:

           "Land development" means the division of a parcel into two or
           more parcels, the construction, reconstruction, conversion,
           structural alteration, relocation, or enlargement of any building or
           other structure, or of any mining, excavation or landfill, and any
           change in the use of any building or other structure, or land, or
           extension of use of land.

  24 V.S.A. § 4303(3).  The town emphasizes the use of the term
  "conversion," because it is defined in the Vermont Protection of Tenants in
  Conversion of Rental Units Act as "a change in character of residential
  real property from a rental to an ownership basis."  27 V.S.A. § 1331(2). 
  It argues that because a condominium conversion triggers zoning review
  under the definition, it should be treated as a subdivision.

       In approaching this question, we have looked at the many cases from
  other states which support the trial court's conclusion here.  Although
  some states have addressed the issue in their subdivision law, see, e.g.,
  Cohen v. Town of Henniker, 593 A.2d 1145, 1147 (N.H. 1991)

 

  (statute defines condominium creation as subdivision); Ohio Mall
  Contractors, Inc. v. Dickinson, 585 N.E.2d 506, 508 (Ohio Ct. App. 1990)
  (statute provides that transfer of condominium ownership is not
  subdivision), the overwhelming majority of decisions conclude that in the
  absence of a specific statute, no zoning or subdivision permit is required
  to establish condominium ownership of rental property.  See City of Miami
  Beach v. Arlen King Cole Condominium Ass'n., 302 So. 2d 777, 779 (Fla.
  Dist. Ct. App. 1974) (no zoning permit required to convert hotel-apartment,
  a nonconforming use, to condominium ownership); McHenry State Bank v. City
  of McHenry, 446 N.E.2d 521, 524 (Ill. App. Ct. 1983) (municipality may not
  use zoning power to prevent condominium conversion); CHR Gen., Inc. v. City
  of Newton, 439 N.E.2d 788, 791 (Mass. 1982) (local condominium conversion
  ordinance is not valid exercise of zoning power because statutory zoning
  power is restricted to regulating use of property rather than ownership);
  Town of York v. Cragin, 541 A.2d 932, 934 (Me. 1988) (conversion of rental
  properties into condominium ownership is not subdivision for purposes of
  statute authorizing subdivision regulation); Supervisor v. Chase Assocs.,
  510 A.2d 568, 571-72 (Md. 1986) (filing condominium declaration is not
  subdivision under land use laws); Maplewood Village Tenants Ass'n v.
  Maplewood Village, 282 A.2d 428, 431 (N.J. Super. Ct. Ch. Div. 1971)
  (condominium conversion does not require subdivision permit because it is
  "nothing more than a change in the form of ownership" and "use of the land
  will not be affected"); Graham Court Assocs. v. Town Council of Town of
  Chapel Hill, 281 S.E.2d 418, 420 (N.C. Ct. App. 1981) (change in apartments
  from tenant rental to condominium ownership does not require zoning permit
  even though apartment is nonconforming use); McConnell v. Wilson, 543 A.2d 249, 251 (R.I. 1988) (conversion of lot into parking condominium is "a mere
  change in the form of its ownership and not a subdivision of land"); Baker
  v. Town of Sullivan's Island, 310 S.E.2d 433, 436 (S.C. Ct. App. 1983)
  (conversion of apartment building to

 

  condominium ownership is change in form of ownership that does not
  require zoning permit).(FN2)  These decisions are generally based on the
  reasoning that the conversion from rental property to condominium ownership
  is a change of ownership and not a change of use, and thus, is beyond the
  scope of zoning regulation.  We recently adopted this reasoning in Vermont
  Baptist Convention v. Burlington Zoning Bd., 159 Vt. 28, 30-31, 613 A.2d 710, 711 (1992), where the zoning board had determined that a transfer of a
  church's office property to a business was a change in use even though the
  actual use of the property would not change in the transfer.  We ruled:

     The Zoning Board's position would allow the zoning ordinance to
     be construed as permitting regulation of property based on the
     identity of the owner, not the use of land.  This result is
     inconsistent with the Legislature's grant of authority to adopt
     zoning regulations. . . .  [The] enumeration of power [in 24
     V.S.A. § 4401] refers only to uses and structures, not the identity
     of the owner. . . .  A distinction based upon the identity of the
     owner rather than the public health, safety, morals, or general
     welfare would be invalid.


  Id. at 30-31, 613 A.2d  at 711 (citations omitted).

       Vermont Baptist Convention rejects the argument the town made to the
  trial court that a change in the form of ownership was a change in use. 
  Further, we agree with the decisions from other states that the transfer of
  rental units into condominium ownership is not generally a land development
  that triggers either zoning or subdivision regulation.

       We also conclude that the use of the word "conversion" in the
  Legislature's definition of land development does not change this
  reasoning.  The definition was created in 1967, see 1967, No. 334 (Adj.
  Sess.), § 1, almost two decades before the Legislature defined "conversion"
  in protecting rental property tenants.  See 1985, No. 175 (Adj. Sess.), § 5
  (adding 27 V.S.A.

 

  § 1331(2)).  The term was far less likely at that time to refer to the
  transfer of a condominium interest in former rental property.

       Three other reasons suggest rejection of the town's interpretation of
  the term "conversion."  First, it appears in a list of actions that relate
  to the nature of the structures on the land and their use and not to
  ownership.  Interpreting it to refer to ownership is inconsistent with the
  statutory construction rule of ejusdem generis which requires that general
  words be construed in a manner consistent with enumerated words.  See
  Vermont Baptist Convention, 159 Vt. at 30, 613 A.2d  at 711.

       Second, the town's interpretation makes the enabling statute
  internally inconsistent because, as held in Vermont Baptist Convention, the
  "enumeration of powers refers only to uses and structures."  Id. at 31, 613 A.2d  at 711.  The definition the town seeks would be broader than the
  specific enumeration of zoning powers.

       Finally, if the Legislature intended that conversion refer to changes
  in ownership, the term is misplaced in the section.  Rather than being
  placed among synonyms for physical alteration, it should be placed as an
  exception or addition to the part of the definition covering "division of a
  parcel into two or more parcels."

       We conclude that the term "conversion" refers to physical alteration
  or use and not to forms of ownership.  The statutory power of a
  municipality to regulate zoning or subdivision does not extend to changes
  in form of ownership only.  See In re White, 155 Vt. 612, 618, 587 A.2d 928, 931 (1990) (town's zoning authority must be "in accordance with, and
  subject to" terms of zoning-enabling statutes).  Accordingly, the Town of
  Colchester may not require subdivision review of a transfer of interests in
  rental property for condominium ownership without finding that the actual
  use of the property is affected.

       Affirmed.

                              FOR THE COURT:


                              _______________________________________
                              Associate Justice


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                                  Footnotes


FN1.  Landowners argue that the town's statutory arguments were not
  raised in their present form below and cannot be so raised here.  We
  conclude that they were adequately raised below.


FN2.  The town argues that we should distinguish these cases because
  of differences in the statutory scheme involved, especially where the court
  relies on statutes prohibiting discrimination against condominium
  ownership.  This argument can always be made about land use decisions
  because of the great variation in the statutory schemes adopted by the
  states.  We rely on decisions from other states, however, because of their
  reasoning which we find instructive in approaching the issue before us.