The ownership of 172.9 acres of land associated with the Villages at Chester Condominium was in dispute after a mortgage foreclosure deeded land to a new developer. Unit owners of the Villages at Chester Condominium Association (association) and the Town of Chester (town) maintained that the land belonged to the association and could not be transferred. The plaintiff purchased the land in 1995 after multiple transfers following the mortgage foreclosure proceeding.
The Villages of Chester, Limited Partnership recorded a declaration of condominium in the Rockingham County Registry of Deeds in 1987. The declarant stated its desire to build a 100-unit condominium on 209.93 acres. The declaration called for an initial development of 10 two-unit buildings along with infrastructure, such as roads and sewerage, all within the “submitted land.”
Two exhibits were submitted with the declaration. Exhibit A, entitled “Description of Submitted Land for Chester,” described the land as containing approximately 22.5 acres labeled as Phase I on a site plan attached to the declaration. Exhibit B, entitled “Description of Expandable Land for Chester,” described the 209.93 acres excluding the land identified in Exhibit A. The declaration provided for development beyond Phase I by stating that further development would require an amendment no later than seven years from the date of declaration. Phases II and III were duly recorded, adding 20 units and 14.5 acres to the condominium and leaving approximately 172.9 acres remaining in land designated as “expandable” on the site plan map. It was the remaining 172.9 acres that was at issue in this case.
The plaintiff petitioned the lower court for declaratory judgment regarding its right to further develop the 172.9 acres he purchased as a result of the mortgage foreclosure. The lower court ruled that the association, on behalf of the unit owners of the condominium, had title to the 172.9 acres. The court found that all 209.93 acres were submitted to the condominium by the declarant when the declaration was originally recorded in 1987. The court also said that the plaintiff might have received title to the 172.9 acres if the declarant had obtained approval to subdivide the property. Subdivision approval was never sought or granted by the town.
The Condominium Act, RSA 356-B, governs all condominiums and condominium projects. It provides that a condominium is created by recording condominium instruments in the registry of deeds. The condominium instruments include a declaration of condominium, which defines the rights as among condominium owners, the condominium association and the developer. If the condominium is an “expandable condominium,” a developer may submit land to the condominium while reserving the right to expand the condominium by adding more land at a later date. When a developer exercises the right to add land in this way, he or she transfers ownership of those added portions of land to the condominium. If the developer intends the condominium to be expandable, the declaration must contain an explicit reservation of the option to add land to the condominium and a legal description of the additional land that may be added, among other provisions.
The Court disagreed with the lower court determination that all 209.93 acres were submitted to the condominium by the declarant when the declaration was filed in 1987. Pointing to the declaration, the Court observed that the “land submitted herein” is defined in Exhibit A of the declaration. Entitled “Description of Submitted Land for Chester,” Exhibit A describes the lands contained in Phase I, which totaled 22.5 acres. Exhibit B, entitled “Description of Expandable Land for Chester” describes the entire 209.93 acre parcel excluding the parcel described in Exhibit A. The Court concluded that Exhibits A and B clearly distinguish between submitted land and the additional land.
The association and town argued that because the declarant did not gain subdivision approval before submitting the land to the condominium, he failed to create an expandable condominium and, therefore, submitted the entire 209.93-acre parcel in the declaration. The Court disagreed, pointing out that the remedy for violation of subdivision regulations is set out in RSA 676:16:
“Any owner … of any land located within a subdivision in a municipality that has adopted subdivision regulations who transfers or sells any land before a plat of the subdivision has been approved by the planning board … shall forfeit and pay a civil penalty of $1,000 for each lot or parcel so transferred or sold… The municipality may enjoin a transfer or sale which violates thus provisions of this section…”
Thus, the remedy available to the municipality against someone who transfers land without first obtaining the necessary subdivision approval is a fine or an injunction. The Court held that whether the declarant was required to obtain subdivision approval before creating an expandable condominium does not affect title to the disputed land. The Court reversed the trial court’s determination that the association held title to the 172.9 acres of land, finding instead that the plaintiff held title.