Secretary of State
A Short Guide to Act 125

THIS IS A WORLD WIDE WEB PUBLICATION OF THE VERMONT SECRETARY OF STATE
(If you are reading a paper version of this document, you may find the original at www.sec.state.vt.us)
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Updated: July 1, 1998 edition

The 1998 Legislature responded to the 1997 Bianchi v. Lorenz decision of the Vermont Supreme Court by passing Act 125, "An Act Relating to Recording of Instruments and Documents Required to Determine Marketability of Record Title." Some sections of the Act were effective upon passage, and all of it was effective July 1, 1998.

The Act means different things to different people, but in the minds of lawyers and real estate professionals, its immediate effect is that local planning and zoning irregularities concerning development commenced prior to the bill's being signed on April 27, 1998, will no longer create a cloud on title to real estate. The Bianchi decision meant that the absence of a necessary permit, for example, might cloud a title, even though the permit may have been issued and the record merely lost or discarded.

(Please note that while the new recording requirements began July 1, Bianchi's effect on titles remains untouched by Act 125 after April 27. Local officials may anticipate future questions from title searchers about the location of regulatory documents issued during this period.)

From a record-keeping perspective, the Act sets out a course by which a municipality's record of regulatory actions pertaining to land will come to be more complete, better indexed and more accessible.

Specifically, the Act requires that memoranda of local regulatory actions now be recorded in the land records. Under Bianchi, planning and zoning irregularities may continue to create title issues going forward, but the record of relevant regulatory actions now will be available. Over time, the effect of the Act will be realized in the incremental building of a comprehensive, well-indexed record of all local actions pertaining to the regulatory status of and the title interests in Vermont land.

The Act also sets out limitation periods for zoning enforcement issues, the operation of which is somewhat complex. As particular cases arise, planning and zoning administrative officials will want to seek legal advice. These limitations are generally intended to protect a bona fide purchaser, without protecting any individual who created the zoning or planning irregularity.

We hope this guide will be useful to you.

-- Jim Milne
Secretary of State
jmilne@sec.state.vt.us

 

CONTENTS Appendix

Enforcement and encumbrance:
What is different after Act 125 and what is not?

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In simple terms, landowners still have to abide by local regulations. Act 125 does not change the town's day-to-day ability to enforce regulations when non-compliance occurs.

If a house has a deck built in 1997 that is non-compliant, the deck remains non-compliant and is still subject to enforcement.

What the Bianchi decision did was to make a non-compliant deck a cloud on the title. Act 125 retroactively reverses that. After Act 125, last year's non-compliant deck is no longer a cloud on the title. But going forward under Bianchi, next year's non-compliant deck will be.

What enforcement limitations does the Act impose?

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Since Act 125's enforcement limits have several important exceptions, it makes sense to discuss those limits first and then to ennumerate the exceptions.

  • First the enforcement limitations. As the result of Act 125:

    • Local regulatory violations first occurring before July 1, 1988 (10 years before the date on which the limitations section became effective) are unenforceable.

    • Local regulatory violations first occurring after June 30, 1988 and prior to July 1, 1998 (the date on which the limitations section became effective) are enforceable if action is instituted before July 1, 2004 (six years after the date on which the limitations section became effective).

    • Local regulatory violations first occurring on or after July 1, 1998 (the date on which the limitations section became effective) are enforceable if action is instituted within 10 years.

  • Now the important exceptions. Act 125 does not limit:

    • Any state regulatory enforcement actions.

    • Enforcement action instituted against a person who first created a violation.

    • Enforcement action instituted in connection with a notice of violation that was properly recorded and indexed in the land records before the current owner acquired title or occupant began occupancy.

    • Enforcement action instituted to abate or remove a "hazard to human health or public safety," or to abate or remove an "undue environmental impact."

What constitutes a health hazard or undue environmental impact as those terms are used in the Act?

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These two crucial phrases in the exceptions to the statute of limitations provision of Act 125 are undefined. The Act does not say what a "hazard to human health and safety" is, or what "undue environmental impact" means, but sets out both as criteria in determining exceptions to the enforcement limitations.

Municipal enforcement officials and property owners and occupants will want to seek legal advice when issues involving these phrases are raised.

What does Act 125 mean to planning and zoning administrative officers?

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The Act greatly reduces the need created by Bianchi to conduct historical review of records that may never have been intended for retention, such as permits, certificates of occupancy, or enforcement letters in the planning and zoning office. While enforcement issues continue, zoning and planning officials should no longer be called upon to search such records in response to Bianchi title issues.

The Act does call for an enhanced land record keeping system going forward, with regular filing of memoranda, with the municipal clerk, concerning certain kinds of records.

It specifies which zoning and planning documents are to be considered "of record" for this purpose and provides a means by which zoning and planning officials may discharge their new reporting duties.

What does Act 125 mean for clerks?

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The clerk's function continues to be ministerial, but there are some changes. In a nutshell, Act 125 instructs clerks to be accommodating in accepting new documents for inclusion in the land records, and to be thorough when it comes to indexing.

The spirit of the law is that we are all best served when more information is available rather than less. That means recording memoranda along with the deeds, and it means keeping track of where they are, so that anyone who looks can easily find them.

What other records now join the deeds by memoranda?

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The law instructs clerks to record, with the land records, memoranda of the following:

  • "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 by statute, ordinance or regulation to be recorded, minutes of meetings that relate to municipal permits, and permit amendments,

  • "certificates of occupancy, certificates of compliance or similar municipal certificates,

  • "any notice of violation of any municipal permit, approval, condition or certificate, and

  • "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."

What should such a memorandum contain?

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The Act doesn't define a memorandum, nor does it indicate how long one might be. A recommended form is included at the end of this Guide.

The Act does specify that the memorandum must list:

  • as grantor, the owner of record title to the property at the time the permit, certificate or notice is issued;

  • as grantee, the municipality issuing the permit, certificate or notice;

  • the municipal or village office where the original, or a true, legible copy of the permit, certificate, statement or notice may be examined;

  • whether an appeal of such permit, certificate or notice has been taken;

  • tax map lot number or other description identifying the lot.

Why would the recipient of a permit be called
a "grantor" of that permit?

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That's not quite what the Act says. The owner's status as grantor refers to the chain of title, not the permit. Thus the permitee of the permit is the (eventual) grantor of the title.

Although this convention may strike the uninitiated as a reversal of conventional terminology, by associating the documents with the name of the property owner, it provides a distinct advantage in making the existence of documents so indexed immediately evident to anyone searching a title.

What is the deadline for filing such memoranda?

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The Act says that a memorandum of a permit must be filed with the municipal clerk within 30 days of the date on which the permit becomes final. A memorandum of a notice of a violation must be filed with the clerk by the "appropriate municipal official" within 30 days of the notice of violation being issued.

Note that the Act appears to be inconsistent with 24 V.S.A. §4443 (a)(3), which says that a permit is not final while it is on appeal. The more cautious approach would be to file a memorandum of a permit that is on appeal within 30 days of the date on which the permit would have become final had the appeal not been taken.

May a permit itself be recorded instead of a memorandum?

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One town has revised its single-page permits to incorporate the elements that the Act says must be included in a memorandum. In this case, a copy of the permit has all the necessary ingredients to qualify as a memorandum of the action and therefore recording the single page would seem to be acceptable.

The advantage of this approach is that the permit and the memorandum are executed in a single document. The disadvantage in many towns with multiple permits or lengthy permits is that recording each permit in the land records would quickly become very expensive and would consume valuable vault space.

May multiple permits be included in a single memorandum?

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Yes, that seems appropriate and the Division of Public Record's recommended form accommodates multiple permits. We would recommend a limitation of one grantor or set of grantors per memorandum, however.

How should memoranda and similar documents be indexed?

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With respect to bound volumes, the Act makes clear that each book shall have its own index. It also specifies:

  • Each owner of record title to a property at the time of a defined "transaction(s) affecting title to real estate" including deeds and memoranda shall be listed as the grantor.

  • Instruments regarding hazardous waste site information, hazardous waste storage, treatment and disposal certifications shall be recorded in the land records and the State of Vermont shall be listed as the grantee.

  • Underground storage tank information shall likewise be recorded in the land records and the State of Vermont listed as the grantee.

  • In the case of municipal permits, certificates of occupancy and similar instruments, the municipality issuing the instrument shall be listed as the grantee.

Who pays for recording these memoranda?

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The Act provides that the property owner, rather than the municipality or any of its officials, shall be responsible for any recording fees. In the case of a memorandum of a notice of violation, the burden of paying for the filing thus does not seem to coincide with the interests of the land owner, making collection of the fee questionable. Presumably the fee for recording a violation memorandum could be added to and collected with any fine involved, but where there is no fine, collecting the recording fee from the target of the violation notice may present a problem.

APPENDIX
The following is the recommended form, with notations, from the Division of Public Records

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ABOUT THIS FORM:

This form is issued as a suggested format.  It was developed by a group comprised of members from the Secretary of State's Office, Division of Public Records, VLCT, VT Municipal Clerks & Treasurers Association,  and interested title searchers, attorneys and legislators.  You may modify this form to suit your town's procedures and needs.

Municipalities may wish to modify this form to list all permits and other items applicable to their town.  We would advise each municipality to consult legal counsel to determine which municipal permits, minutes, and other items would affect title, and need to be listed as a result of Act 125. The following is from Act 125:

(b) The town clerk shall record in the land records a memorandum or notice of a municipal permit, or a statement, or a notice of violation, which is delivered for recording as described below:

(1) 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 by statute, ordinance or regulation 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.

(c) If a municipal memorandum or notice is recorded, it shall list:

(1) as grantor, the owner of record title to the property at the time the permit, certificate or notice is issued;

(2) as grantee, the municipality issuing the permit, certificate or notice;

(3) the municipal or village office where the original, or a true, legible copy of the permit, certificate, statement or notice may be examined;

(4) whether an appeal of such permit, certificate or notice has been taken;

(5) tax map lot number or other description identifying the lot.

    *[(b)]*(d) The town clerk shall keep in each *[of the books]* book of record an index of reference to the instruments or records in *[such]* that book.

     

INSTRUCTIONS FOR USING THIS FORM:

1.) List the names of all title owners of record for this piece of property.  For indexing purposes, they will be considered the GRANTORS, and the municipality will be considered the GRANTEE.

2.) List the names of all applicants if different from the title owners.

3.) Please describe the property by filling out at least one section.  If known, please complete other sections.

4.) List the type of permit, notice, or other item, its number if applicable, the date issued, the location the permit or item can be referenced, and if an appeal has been filed as of the date of recording this memorandum.

MEMORANDUM OF
MUNICIPAL ACTION
24 V.S.A.  Section 4443(C)

RECORD TITLE OWNER(S) OF PROPERTY (GRANTOR):

__________________________________________________________________

__________________________________________________________________

APPLICANT(S) IF DIFFERENT FROM RECORD TITLE OWNER(S):

__________________________________________________________________

PROPERTY DESCRIPTION (COMPLETE AT LEAST ONE):

        ADDRESS OF PARCEL: ___________________________

        TAX MAP PARCEL NUMBER: _____________________

        DEED REFERENCE: VOLUME: ______   PAGE: _______

TYPE OF MUNICIPAL ACTION(S):

TYPE PERMIT NUMBER
if applicable		 DATE  ISSUED LOCATION OF RECORD APPEALED TO DATE?
         
         
         

 

             Received for Record

   __________________________ AD 19___ at ________o'clock  AM  PM

  Recorded in Book ____________ Page ______________

Attest _____________________________________
                                    Town Clerk/Assistant Town Clerk