Reversed! New Hampshire Supreme Court Rules in Favor of Property Owner – Leaseholder Not Able to Provide Permission for Site Plan Review Application
The New Hampshire Supreme Court (the “Court”) recently weighed in on a dispute concerning a site plan review application submitted to the Town of Salem’s (the “Town”) Planning Board (the “Planning Board”). The matter on appeal involved property owner DSM MB I, LLC’s (“DSM”) request for reversal of a trial court order directing the Board to accept Plaintiff Kymalimi, LLC’s (“Kymalimi”) site plan review application as complete based on the permission of leaseholder Transform Lease Opco, LLC (“Transform”).
DSM is the owner of the property at issue and Transform is the long-term leaseholder. The lease held between DSM and Transform allowed Transform the ability to assign the lease to another party. Sometime prior to March 2021, Transform executed a long-term sublease agreement with Kymalimi for use of the property as a charitable gaming operation. Shortly thereafter, Kymalimi submitted an application for site plan review to the Planning Board to change the use of the property. Transform supported Kymalimi’s site plan review application, while DSM objected.
The central issue concerns the requisite permission needed for the application. The Town’s site plan review regulations require the applicant to obtain the property owner’s permission before submitting an application for site plan review. Kymalimi and Transform argued that Transform, as the leaseholder of the property, met the definition of “owner” and was thus able to provide the permission necessary for Kymalimi to proceed with its site plan review application, in spite of DSM’s objections. The trial court agreed with Kymalimi and Transform and DSM appealed to the Supreme Court.
The Court explained that when interpreting planning board regulations, it will conduct a de novo review and the general rules of statutory construction govern. See Trustees of Dartmouth Coll. V. Town of Hanover, 171 H.H. 497, 509 (2018). When the regulations define the term at issue, that definition controls, however in situations where no definition is provided, the Court will look to the regulations as a whole and attempt to discern the drafters’ intent. Id.
DSM argued that the trial court erred when it concluded that a leaseholder of a building met the definition of an “owner” and was thus entitled to give permission for a planning board site plan review, over the fee simple owner’s objection. In analyzing this argument, the Court looked to the wording of the Board’s regulations, which state that a “letter of permission from the owner of property” is required when applying for a site plan review. Additionally, Section 2 of the site plan application requested the name, mailing address, and telephone number of the “owner of record if other than applicant” and specifically noted that written permission of the owner is required. The Court found this latter statement referencing “permission” implicitly referred to the letter of permission required in accordance with the Board’s regulations, and that “owner of property” and “owner of record” refer to the same entity or individual. The Court concluded that DSM – the fee owner of the property – was the “owner of property” as provided in the regulations and the “owner of record” as referred in Section 2 of the application.
Kymalimi attempted to the persuade the Court that Transform should be considered an “owner of record” because its leasehold estate is a matter of record as it was recorded in the Rockingham County Registry of Deeds and it “owns” a leasehold interest in the property. The Court rejected this argument, holding that while Transform may have a property interest, it is not the property owner for purposes of providing permission for Kymalimi’s site development plan. The Court found that the trial court erred in finding that Transform’s permission satisfied the requirements of the Town’s site plan regulations, and reversed the decision.
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