liability of replacing and remediating leaky underground fuel tanks? “It takes people a while to accept that,” Coates says. “Even though, when they go up f or sale, they don’t have any trouble selling them.” Coates also points out that lessees who don’t abide by the rules can be evicted. How does one go about evicting both a person and his or her house? As Coates tells lessees, “You can tear the house down and take it with you, or just leave it,” he says. That said, evictions have been exceedingly rare on Coates Island — only two in 142 years, he says. What are the rewards of living on leased land? The most obvious are the charac teristics that make these properties so desirable — namely, their scenic locales. Leased land in Colchester is primarily on Coates Island, Mills Point and Colchester Point, all of which offer phenomenal views and easy lake access f or boating, swimming and fishing. Moreover, because homeowners purchase the house but not the land itself, the properties are sometimes more affordable than buying the lot outright. And, as Colchester Town Assessor Vickery points out, neither the 2011 floods Coates Island Campers’ Association. Each nor the recent Supreme Court ruling seems to have had a negative impact on lease also spells out how the land can be used. For example, lessees cannot cut down leased-land market prices. In fact, he says, trees or erect other structures without first some of the homes irreparably damaged in obtaining permission from the landowner. 2011 sold for as much as $120,000, only to be bulldozed and replaced with larger and How do people deal with buying a more flood-resistant structures. house on land they don’t own, especially Evidently, homeowners can still profit when they’re responsible for land-related expenses, such as the upkeep and replace- f rom their location — even when they ment of septic tanks and the environmental don’t own it. m Mills Point Road
Neither the 2011 floods Nor the rece Nt supreme court ruli Ng seems to have had a Negative impact
FEATURE 37
whose f amily has owned the island since 1872, has 36 seasonal leases and four yearround residences, the latter of which are all held by Coates family members. As Coates explains, all the leases on Coates Island are for five years and cost $6,000 annually. That price doesn’t in clude other fees associated with living on the island, including road maintenance, sanitation and membership dues in the
SEVEN DAYS
on leased-land market prices.
05.07.14-05.14.14
W
hat are the other drawbacks to owning a house on leased land? As Murphy points out, banks can be reluctant to lend money for leasedland homes, especially when the terms of the lease are short. Amortizing a mortgage over 30 years is hard enough f or many Vermonters, he notes; amortizing one over 10 years can be financially impractical. Another concern is that the zoning of leased-land camps is of ten such that the land can never be subdivided into owner ship lots, nor can it be lived in year-round. Both are the case on Coates Island, a 70acre island in Malletts Bay. David Coates,
Coates Island
SEVENDAYSVt.com
apply to leased-land homes. The town contended that it’s impossible to separate the f air market value of a house f rom where it’s built. In effect, Judge Crawford had to decide whether the value of a left-hand glove could be determined independently from that of its right-hand counterpart. In his April 3, 2012, ruling, Crawf ord did just that. He sided with the homeowners, writing that “the only ‘real estate’ taxable to appellants [homeowners] are the ‘buildings’ they own.” The intangible “amenity value” in these cases belonged to the landowner, who should be taxed accordingly. Crawf ord’s ruling could have had serious financial repercussions not only f or Colchester but f or other towns with large numbers of leased-land proper ties. Colchester stood to lose more than $36,000 in municipal tax revenues and more than $92,000 in school tax revenues in one year alone. Those figures didn’t include back taxes from previous years that the town might have been forced to return to homeowners. However, the town appealed Crawford’s ruling to the Vermont Supreme Court — and won. In a July 2013 decision, Justice Marilyn Skoglund reversed the lower court’s ruling and ruled that location-re lated f actors are “intimately intertwined” with the value of the building. “Indeed,” Skoglund wrote in her opinion, “it is hard to imagine any factor more closely tied to the value of a building than its location.” Murphy says he was disappointed but not surprised by the high court’s ruling. Until a f ew years ago, he himself owned a camp on leased land in Milton, and says that such properties come with inherent risks and complications. For example, Murphy’s lease, which had a five-year initial term with another five-year option, only guaranteed him 10 years on the property. That’s how the f amily who owned the land had been doing things since the 1930s, he says, with its leases written in anything but standard legal language. Yet despite his reserva tions, Murphy admits, “As a lawyer, I just closed my eyes and jumped.”
pho Tos: m ATTh Ew Tho Rs En
Ungrounded « p.35