Gilford officials believe 'resort' condo owners are renting to long-term tenants in defiance of zoning & deed restrictions

GILFORD — Town officials are concerned that at the Paugus Bay Plaza Condominiums at 131 Lake Street, like the fictional Hotel California, "You can check out any time you want, But you can never leave."

Although approved as a hotel/motel and limited to "transient occupancy," Code Enforcement Officer Dave Andrade suspects that some of the condominium units have become homes to individuals and families for extended stretches of time. Recently he informed the condominium owners that he was investigating.

"I've been dealing with that property for 16 years," he said. "I'm trying to work with the association, but coordination is a challenge."

Long known as One Gilford Place, the property at 131 Lake Street consists of two components, one residential and the other commercial. The residential component consists of 63 residential condominium units on two floors of a building that envelops the commercial space on the ground floor beneath it.

According to the assessor's database, there are 47 separate owners, a handful of whom own multiple units. Most are individuals and couples, but a half-dozen units are held by partnerships and corporations. The units range between approximately $42,000 and $80,000 in value according to their size and view. The owners are members of the Paugus Bay Plaza Condominium Association.

The 29 commercial units are owned by Ogp, LLC, of Manchester, whose principal Steven Cotran heads the master condominium association, which together with the two associations comprised of the condominium owners and commercial tenants, manages the entire property.

In accordance with the Planning Board's approval, the residential building operated as a conventional hotel/motel for some time. But, some years ago the reception desk was abandoned along with any outward indication in the form of signage or advertising that the units are available to travelers or transients. Instead, the individual owners arrange to let their units.

However, in the eyes of the town, the property remains a hotel/motel, subject to the restriction of the zoning ordinance limiting occupancy to no more than 30 consecutive days or no more than 30 days in any 60 day period. Only one unit, reserved for the hotel/motel manager, can qualify as a year-round residence.

Meanwhile, the deeds to the condominiums designate them as "resort units," which are restricted to "recreational use similar to that of a motel or motor lodge unit and only for transient lodging." The deed stipulates that neither ownership nor occupancy of a unit indicates that owners or occupants have "established or intend to establish residency" in Gilford and expressly prohibits them from using units as legal residences.

Furthermore, owners are prohibited from using their units or permitting them to be used "for any purpose other than as a transient accommodation." Finally, the deed restricts the right of owners to rent to the same tenant as well as to occupy their units or house their guests for more than two consecutive weeks between September 1 and June 1.

In other words, the deeds to the units are more restrictive than the town zoning ordinance. But, only the grantor of the deed, not the town, can enforce its terms.

However, the town can, and does, deny legal residence to occupants of the units.

Town Clerk/Tax Collector Denise Gonyer said that her office will not register vehicles to anyone claiming 131 Lake Street as their address.

Dave Ackeredge, president of the Paugus Bay Plaza Condominium Association, said yesterday that the organization has worked to address the concerns of the town, stressing that the relationship has been "not been adversarial in any form." The board, he explained, has repeatedly reminded unit owners of the restrictions on their property, emphasizing "this is not an apartment complex."

Likewise, attorney Craig Donais, who represents the association, offered that unit owners also understand that because they provide accommodation, they are liable for the state Rooms and Meals Tax on rents charged.

In 2010, Ackeredge, accompanied by Donais, appeared before the Zoning Board of Adjustment to request a variance to change the use of the units to senior housing. He told the board that unit owners wanted the ability to rent for a longer period, specifically to tenants 55 years old and older from September to May, in order to reap some income from their property. He claimed that the Marriott TownePlace Suites in Gilford offered "extended stays" of 60 to 90 days or more, noting that the units at Paugus Bay Plaza provided similar accommodation.

At the time, Andrade and board members voiced concerns about tenants seeking to establish residency. Ackeredge acknowledged the problem and assured the board the association would cooperate with the town to enforce restrictions. Advised that the board did not consider senior housing an appropriate use, Ackeredge withdrew the request, indicating that the association would return to discuss other possible off-season uses.

The association has not approached the ZBA since and Ackeredge said there were no plans to do so. However, he stressed that the association was seeking to establish "a methodology for self-policing" to ensure unit owners were in compliance and provide the town with a fresh proposal. "We are working through this," he insisted. "We've made progress and we'll get there and there is definitely going to be up."