Gilford officials warned that coming down hard on rental practices of 'hotel' condo owners will lead to decrepit building

  • Published in Local News

GILFORD — With lingering concerns about the ability of  the Paugus Bay Plaza Condominium Association to shepherd the owners of units at 131 Lake Street, the Zoning Board of Adjustment this week unanimously tabled its request for a variance from the ordinance limiting rentals at that location to not more than 30 consecutive days or 30 days in any 60 day period.

The  63 residential condominium units were  approved by the Planning Board as a hotel/motel ...

GILFORD — With lingering concerns about the ability of  the Paugus Bay Plaza Condominium Association to shepherd the owners of units at 131 Lake Street, the Zoning Board of Adjustment this week unanimously tabled its request for a variance from the ordinance limiting rentals at that location to not more than 30 consecutive days or 30 days in any 60 day period.

The  63 residential condominium units were  approved by the Planning Board as a hotel/motel and limited to "transient occupancy." But, in 2006 the reception desk was abandoned along with any common management of  rentals. Since then the 47 individual and corporate owners of the units have advertised and let their units, often for more than the 30 days prescribed by the ordinance.

Last month, Code Enforcement Officer Dave Andrade began evicting long-term tenants, prompting the association to approach the ZBA.

"The building hasn't been functioning effectively," attorney Craig Donais of Manchester told the board, "and the situation isn't getting any better."  He said that the units have lost significant value and 10-percent have been foreclosed.

The president of the association, David Akridge, who brings a career in the hotel industry to his position, explained that the  lodging industry has changed with many hotel and motel franchises, including Marriott, Hyatt, Holiday Inn, Hilton, offering "extended stay products." While the ordinance reflected industry practices at the time, he said that extended stays are a growing trend."  The Manchester zoning ordinance, he noted recognizes the trend by defining an "extended stay facility" as "a hotel-like establishment offering lodging accommodations to the general public, often available on a weekly or monthly basis, and providing in-room cooking facilities."

Insisting he was not "pointing fingers," Akridge said that he was able to book extended stays, exceeding 30 days,  at both the Marriott Town Place Suites and the Fireside Inn and Suites in Gilford and and distributed confirmations of his reservations to the board.

Andrade remarked that the Planning Board is aware that the 30-day limitation is "outdated" and suggested that it may consider amending the ordinance.

Akridge said that the association shared the town's concern that the building not become low-income housing and its tenants not establish residency. In support of the requested variance, he proposed that the association would administer  — or "self-police" —  a process for renting units.  Any owner wishing to rent a unit for an extended stay would be required to file an "extended stay folio" with the association. The folio would contain the permanent address and contact information of the person renting the unit. Unit owners would be required to file a "meals and rentals license," issued by the New Hampshire Department of Revenue Administration, to ensure they were registered with the agency and collecting the state meals and rooms tax.

Guests  would be told that they could not vote, register a vehicle, enroll a child in school or "enjoy any benefits of residency" in Gilford. The number of occupants would be limited according to the size of the units, which consist of studio, one and two bedroom apartments. All folios and records would be open to inspection by town and state officials as well as the condominium association and its management company.

Akridge stressed that the units would be subject to the "innkeeper" statute  (RSA 353), not the laws governing relations between landlords and tenants, which entitles unit owners to remove guests without undergoing the eviction process. The association, he said,  would amend its  bylaws to include rules and regulations for "processing and managing the guest folios" with penalties for failing to comply. Likewise, the condominium documents and deeds would be amended accordingly. The penalties would begin with a $25 fine for each day a unit owner was in violation, followed by a lien, then discontinuance of association services and foreclosure.

"Self-policing sends shivers down my spine," said Andy Howe, chairman of the ZBA. "What assurance do we have of compliance?" he asked. "We have a history of problems and that changes the nature of our concerns."

Andrade reminded the board that neighbors had complained about residents of the building and both police and firefighters had been dispatched there on numerous occasions. He recalled that he went to evict a long-term resident only to find "he was tattooing an individual when the police arrested him for running an illegal business." When an indigent resident was evicted, he said that the town had to assist with moving expenses.

"We want to run a clean operation,"Akridge declared. He said that when he became president in 2008 the association was in dire financial straits, with half the units not paying  fees. Since then, he said, 90-percent of units are current and a fund to finance repairs and improvements to the building has been accrued. "I can't tell you we'll never have problem," he conceded, while seeking to assure the board that the association had the capacity to enforce the rules.

David Bellman, a director of the association, warned that "unless we can make the property profitable, it will collapse and the town will wind up with an abandoned building. Penalizing us for the past is not going to help us go forward."

However, the board remained troubled by the prospect of "self-policing" by the association without a centralized renting operation and constant presence on the site.

"The  violations have gone on because there is no central registration, no means of enforcement," said Bill Knightly. "The enforcement will fall on the town."

"I don't see anything in place to prevent violations," Howe agreed. "Nothing to catch it the moment it happens." 

"There's no front desk," said Scott Davis. "That's a large issue for me."

In tabling the request, the board asked Akridge to develop an operational plan that offered greater assurance of compliance by the unit owners and enforcement by the association.