Some Gilford property owners exercising option to 'unmerge' lots

GILFORD – To unmerge or not to unmerge.

That is the question that a few landowners are asking themselves in the wake of a 2010 N.H. Supreme Court ruling and a Gilford town referendum that allowed landowners to "unmerge" or separate adjoining irregular lots that had been combined by the town without the knowledge of the owners.

According to Planning Administrator John Ayer, the law is quite clear — property that was involuntarily merged or combined with an adjoining lot by the town can be separated along the original property line. In addition, once two or more lots have been voluntarily merged by an owner, they cannot be "unmerged." Only a request for a subdivision is appropriate.

To date, Ayer said 11 lots in Gilford have been "unmerged" and one of the owners is considering putting his lots back together to save money on taxes after being unable to sell one of the separated or "unmerged" lots.

Ayer said the merging of non-conforming lots started in the late 1960s and early 1970s and, with the onset of zoning and the establishment of a minimum lot size, was likely a reaction by the town to a number of irregular lots abutting other irregular lots. Irregular lots were merged with adjoining lots if they had the same registered owner, often without the consent or knowledge of the owner.

Barbara Aichinger of Governors Island upset the apple cart in 2007 when she tried to "unmerge" her two lots and build a house on each one — one for her and one to sell to finance the other.

When the town initially agreed to separate the lots, it gave her a building permit for the second lot. But then the town changed its mind, and Aichinger went to court. While Aichinger actually lost many of the specific points of law she had argued in 2010, the N.H. Supreme Court upheld her right to continue building on the abutting lot.

She also spurred the state Legislature pass RSA 694:39-aa, which became law in 2011 and gave New Hampshire property owners whose lots were involuntarily merged by a local governing body until at least 2016 to "unmerge" them. The law also prohibits municipalities from involuntarily merging lots.

In 2010 Gilford voters passed a zoning ordinance that gave owners the same rights as the state law, but extended it into infinity or until a new ordinance is passed.

Fast forward to 2013 and potential buyers are wondering what lot merging means, what it means to have a lot "unmerged," and what building rights are associated with purchasing it.

The benefit to a land owner or future land owner to keep multiple lots together is taxes — one building lot will cost less in taxes than two or more building lots. The downside to keeping a merged lot is the inability sell it as a separate building lot without "unmerging" it — a process that can be time-consuming and comes with no guarantee that other restrictions won't deter construction.

The difficulty for a potential buyer is knowing whether or not a lot was involuntarily merged and assessing its real value.

"Buyer beware," said Ayer. How a property owner chooses to market his property, he said, is a decision made by the owner and the real estate agent. He declined to comment on specific Gilford properties listed for sale by saying each one needed to be researched on its own.

He said other restrictions can also rendered an "unmerged" lot not buildable — giving steep slopes, setbacks and proximity to water as examples of restrictions that can also restrict an owner's right to build, regardless of whether it was involuntarily merged or not.

He referred to a July 13, 2013, N.H. Supreme Court decision that centered on the town of Windham and the desire of a property owner to "unmerge" lots that date back in his family to at least 1913.

The case hinged on whether or not the lots were voluntarily merged by his ancestor. The town used to deeds and existing construction as guides to the intent of the now deceased former property owner and the court upheld their findings.

Windham officials had agreed some of the five full lots and two partial lots that had been involuntarily merged could be separated, but decided one of the partial lots wouldn't qualify because the previous owner had built a garage two feet from the old property line and with the same access as the main lot.

The town said the same principle applied to a bunkhouse built on an second abutting lot. The house, the garage, and the bunkhouse all use the same driveway.

The Supreme Court upheld the town's decision that two of the lots were voluntarily merged with the main lot by the previous owner because he built the garage two feet from the property line and must have considered it to be the same lot.

The same principle, said the court unanimously, applied to the bunkhouse.

"... a shared driveway alone may not be indicative of an intent to merge lots, when viewed in conjunction with evidence of the placement of the garage and the bunkhouse, the use of a single driveway to serve multiple lots supports the conclusion that the prior owners intended to merge the lots," reads the opinion supporting the town's ruling.

Ayer said Gilford will take no action on "unmerging" unless approached by the property owner and he will review each set of circumstances. He said his department makes its determination by examining deeds and conveyances to see if a lot has been involuntarily merged.

He said property owners should provide a written inquiry, a copy of their deed, and any other evidence that their lot was involuntarily merged.

If the property owner disagrees with his decision they can be appeal to the Zoning Board of Appeals.

The Windham case went all the way to the state Supreme Court.