Vermont Legislature SmartTranscripts:

[Marc Mihaly (Chair)]: Thank you. Welcome everybody to the House Committee on General and Housing, and today is February 3. We are in February already. Today, we're gonna first we're gonna hear from representatives of the Fula project, then we're gonna take up seven fifty seven, which is an act we've been taking testimony on concerning manufactured homes and limited equity co ops. Then we'll take a break and return to discuss that act and with our counsel and possible markup. And then we'll end with the Village Trust Initiative update from Ben Doyle and Nicole Gratton. But let's start now with the Hula project. Ross, welcome. You've been here before. Yeah. State your name for the record and tell us what you're gonna tell us.

[Russ Scully]: Sure. Russ Kelley, I'm the founder of Who Left. And we're here today to talk about our housing development project that we're building in the South End Of Burlington called Ride Your Bike. Excited to announce that we filed for our building permits and we're on track to produce two zero four units of housing hopefully come online in the 2028, if everything stays on track and on schedule. And I'm here with my development partner Andrew Foley from Jonathan Rose Companies, who's been working alongside of me for a number of years now to realize the potential of this project, help us with the financing that needs to be in line in order for us to realize this opportunity. Yeah, we're happy to be here.

[Marc Mihaly (Chair)]: Forgive my confusion. So last time when you were here, you were describing a very large project that had upwards of 1,000 units or something like that. Is this

[Andrew Foley (Director of Development, Jonathan Rose Companies)]: part of that?

[Russ Scully]: Yeah, so this is the first phase.

[Marc Mihaly (Chair)]: Okay, so

[Russ Scully]: we're still very much committed to this. Yeah, so this drawing shows you the actual full phase project. We estimate being able to build up to 1,400 units. The first phase will be two zero four units in the Northwest corner here in these few buildings.

[Marc Mihaly (Chair)]: So, point again. That's two zero four units. Yes. And it's the first phase of this larger development? Yes. You want to tell us a little bit about what these units are, what they're like, are any of them affordable, etcetera?

[Russ Scully]: Yeah, Yeah. I'm gonna pass over to Andrew to put it

[Marc Mihaly (Chair)]: You know what? There's a you can there's a chair right behind you if you both wanna just sit here at the same time. You wanna just tell us your name for the record?

[Deborah "Debbie" Dolgin (Member)]: Thank you

[Andrew Foley (Director of Development, Jonathan Rose Companies)]: for having me again. And for the record, Andrew Foley, I'm director of development at Jonathan Rose Companies, a development partner with Russ on this project. So that's actually a perfect segue. So last time we were together, we showed you kind of an empty parking lot full of possibility. We've been working with the city over these year to advance the concepts of valuing, but as has been pointed out, we're really focused because we wanna get some housing built now on let's get 200 units going now. So we've had a really strong partnership with the city and a lot of support in the state, which we look forward to recapping for you. This is what we are at this point called in building a much of a large space building. So it'll be two zero four residential rental units, predominantly one bedroom studios with some two bedroom apartments. We are proposing that up to a third of the units are affordable to households at or below 50% of AMI. Local inclusionary zoning requires 15%, some of the priority housing gets you up to about 20. We really wanna go beyond that because we think this is an opportunity to really provide inclusive housing that's affordable to Brevardhaly's of all incumbents. So on the Ground Floor, we're activating a new street we're calling Innovation Lane, which will bisect the center of the site with a range of interesting uses, about 7,600 square feet. Russ, you wanna maybe add a little color to what the Ground Floors are gonna

[Russ Scully]: look like? Yeah, so typically in these types of buildings, Ground Floor uses are normally retail, restaurants, and those kinds of types of activities. The South End has a lot of those already. We don't need to be redundant or, you know, duplicative around the things that are already there. What we'd rather do is we're going to tap into sort of the needs and wants and wishes of the tenants that'll mostly be made up of workforce, early workforce people, typically working in and around the Bulleit Building. A lot of those tenants are in an engineering field. So we want to make a, essentially we're going to create a maker space on the Ground Floor of the building. This video plays for people who are residing in the building to build community. They're going to actually use that space to essentially tinker. They're going to have essentially free time to explore whatever it is that they want to be building. We've talked to a lot of the employers of the places that these people work, and in their free time, they're still being wildly imaginative and creative in creating things. So we essentially want to create the space that allows them to do that. And in doing so, it's also going to build community in the process. It's a great opportunity to have a shared community space where they can gather and do things that build relationship, build rapport and actually produce things.

[Marc Mihaly (Chair)]: That, don't you have kind of a maker space already? At Hula. At Hula, yeah.

[Russ Scully]: Yeah, Hula is really a co working space. It's office space, it's co working space, but it's not exactly manufacturing space. What we want to do is like the apartment units above in these buildings are all, you know, they're really designed for efficiency. So they're generally small in size. So what do you give up when you live in an apartment? Give up essentially garage, shop space, things to tune bikes, tune skis, to even light storage. But the idea of allowing these people the space to be creative really ties into the ethos of the South End as well. We're in the Arts And Innovation District. This really taps into the use, the needs, the wants of the people who live there, and giving them full creative space is really build what they want to build.

[Marc Mihaly (Chair)]: One step further into my, Mary did you have a question? Gayle did first.

[Gayle Pezzo (Member)]: Go ahead Gayle. Question was all the questions that you asked, however I just have one question. Did you decide this rather than a parking and underneath parking?

[Andrew Foley (Director of Development, Jonathan Rose Companies)]: Parking underneath parking underneath the building? Yeah. We are not providing any subgrade parking. It's very expensive to do and also I think we, because one of the virtues of the site is that we have the ability to utilize existing surface parking that's around the building. We have 25 stalls of parking that we really hope to activate with car share and other really integrated pieces, but we're really trying to demonstrate a car light community, but over time. And so by virtue of being a very large parking lot, we'll have plenty of parking, but as we build out subsequent phases, we're hoping to really take down the required parking.

[Gayle Pezzo (Member)]: And do you have an idea of the one bedrooms as far as the rental?

[Andrew Foley (Director of Development, Jonathan Rose Companies)]: We've done some market studies. Still, we are around 100% to 120% of AMI bands. We haven't established what those rents would actually be yet, but, you know, we're continuing to have those conversations with our lenders and doing some market studies.

[Gayle Pezzo (Member)]: Thank you.

[Deborah "Debbie" Dolgin (Member)]: Mary. Thank you. Your plan for health and wellness, what does that mean?

[Andrew Foley (Director of Development, Jonathan Rose Companies)]: Yeah. So one thing we're looking to do is actually in front of both fitness, but also of course in- Yeah,

[Russ Scully]: we're excited to think about an opportunity of creating an integrated health center inside the space that wasn't the Ground Floor. So in doing so, what we hope to do is think about how we might model sort of a first stop healthcare space for, again, we have a strong density of employees working in this area. The productivity, but also the convenience of being able to make a visit to an integrated health center type space before going to a doctor is something that we think could be really helpful in terms of just employee productivity, as well as really addressing an acute healthcare need that I think is very overlooked, right? And is honestly problematic in just crowding the healthcare system. One of the issues of trying to get to the doctor is the amount of people that go to the doctor. And so in this model, we're thinking that this first step could be an advocate for each of the members to help them decide if they need to go to the doctor or not. And then if so, how do you actually walk them through the process in a way that's efficient? And so that's our health and wellness plan. In addition to that, we're really designing this space to be very walkable. We're right on the city bike path, right? As you know, the name of this property is called Ride Your Bike. And that was our expression of frustration of having to provide parking for people who drive their cars to and from work every day. We said, listen, there's a better opportunity here that is healthier for the participants. So we're providing a large number of bicycles to the residents of this property, and we're positioning those bicycles in a place that's very strategic, so that they essentially have to pass by a number of bicycles before deciding to operate one of the car share vehicles. One of the things we're planning for this development is we're, as Andrew pointed out, we want to be very car light, but we're also partnering with Car Share Vermont, and we're modeling something that they haven't done before, but we would like to see Car Share Vermont essentially provide all the vehicles for this site, and the people who live here will be using Car Share vehicles rather than their own. And in doing that, we feel like that will help them transform a behavior that's very car centric into a behavior that is hopefully riding bikes, walking, and using alternative modes of transportation, and cut down a lot on obviously vehicle traffic in the area and things like that. So there's a strong focus around health and wellness that I think we've already adapted or adopted honestly and designed within Hula. We have the Burlington Surf Club that sits on the Hula campus, which is an activity center focused on getting people on and off the water with rentals, equipment, lessons, staff. It's part of my DNA, it's part of my wife's DNA. Mean, we live a very active life and we're trying to create an environment here in the campus and a lifestyle that does the same. It really embraces kind of work and help.

[Marc Mihaly (Chair)]: Let's see, Mary, you have another question, then Elizabeth, you have a question too.

[Deborah "Debbie" Dolgin (Member)]: Units be adaptable for disability?

[Andrew Foley (Director of Development, Jonathan Rose Companies)]: Yes, we are working to incorporate, and I have a note into the Arctic just to confirm where we are on that, because I know that that's an important topic for you, so let me follow-up with exactly what the percentage of units are. Me get back to you on that. Okay, thank you. Let's see, Elizabeth?

[Deborah "Debbie" Dolgin (Member)]: I was gonna say that Johns Hopkins had, I think now about at least ten years ago, still relevant, I don't know if it's still going or not, but they had a really amazing program, at least ten years ago, where they would public wellness centers that included gyms. And they would also, at the same time, set up employee physical therapists on-site so that it could actually be a wellness preventive care thing, and then you could get the physical therapy and the gym membership all in one kind of quasi commercial setting. So it might be just a suggestion of Yeah, holistic clinical

[Marc Mihaly (Chair)]: that's great.

[Thomas "Tom" Charlton (Member)]: So I'm curious, usually a development that is similar to this in scale utilizes the ground floors, commercial space, anchor tenants, revenue generating, and that helps the whole thing pencil out. Are these paid membership gyms, members makerspaces? Sorry. Are they does membership come with the rental unit? How are your how does that affect your finances? Expect?

[Andrew Foley (Director of Development, Jonathan Rose Companies)]: Yeah, so it will be space that is leased from the building. We haven't figured exactly what the membership tiers and how all that's going work. We're still early in that process. We don't really view it as a profit center in a lot of our projects across the country. These days with so much changing in retail patterns, retail trends, goal is really for the ground Floor to activate the communities, be it amenity for not only the residents, the surrounding community, and not to be vacant, honestly. So we are trying to be fairly modest in our, hopefully, same thing can

[Thomas "Tom" Charlton (Member)]: get in for that space. Does obviously that requires a different sort of funding stack. More loans, more grants, what is it that moves to accommodate that?

[Andrew Foley (Director of Development, Jonathan Rose Companies)]: None of the affordable housing sources that we are proposing to you will subsidize that, so it's commercial debt and equity. The goal is to get enough rent to break even, to us, that's a win these days in an emerging neighborhood of the tech.

[Marc Mihaly (Chair)]: Ashley? Think

[Deborah "Debbie" Dolgin (Member)]: we've had a question first.

[Marc Mihaly (Chair)]: Oh, Leonora, I'm sorry.

[Leonora Dodge (Member)]: I just assumed that the Universal Design Incorporation would be a question for our committee, yeah, from our committee. You said that you How have those been integrated into maybe not like a fully accessible apartment, but?

[Andrew Foley (Director of Development, Jonathan Rose Companies)]: Yeah, and I'm pretty sure, I just want to make sure before I give you the format, but I'm pretty sure that

[Gayle Pezzo (Member)]: Yeah, I

[Marc Mihaly (Chair)]: mean, there's two different issues, universal design, and then there's whether there are ADA accessible units, right? Right. They're separate questions. A couple of questions. You have a Please, question go ahead. I'm keeping track it. You were just telling her, you've got to use your buttons.

[Leonora Dodge (Member)]: We have each other's back apparently, clearly.

[Ashley Bartley (Vice Chair)]: I love how creative this is. I think it's really commendable that you have this focus on wellness and just feeding a community out of it. I also want to commend you for going farther than local zoning. I think there are a lot of projects that don't necessarily want to do that. One question I did have for you is for the apartments that aren't gonna fall in the affordable housing, affordable rents, what are you forecasting those rents to look like?

[Andrew Foley (Director of Development, Jonathan Rose Companies)]: Yes, we've done some market studies. We are looking to be around 100 to 110% of period median income that would put studio apartments around $1,900 a square foot or so, one bedrooms, in like the $2,500 $2,600 a square foot, month, sorry, but we're still, we're a long way out from locking in those beds now short.

[Marc Mihaly (Chair)]: Yes, go ahead,

[Deborah "Debbie" Dolgin (Member)]: Can you talk about the affordability, the permanent affordability? How is this a temporary thing, or how do you project this? Great question. And yeah, so we are, we'll get into this in a but we're actively working and have applied

[Andrew Foley (Director of Development, Jonathan Rose Companies)]: with DHCP and DHFA, so it's permanent affordability as required for receiving HCV funding, so we're looking to incorporate those

[Marc Mihaly (Chair)]: covenants into those. So your capital stack depends on funding

[Andrew Foley (Director of Development, Jonathan Rose Companies)]: from VHCb or VHFA? Yes. And that might be a good segue to the next slide if we want to talk a little bit about funding. Are there any other questions about the project in general?

[Deborah "Debbie" Dolgin (Member)]: I was a little confused, and so I just want to make absolutely sure that I understand what you're saying. Representative Bartley just asked you about the rents for the affordable units. No. No market rate. I'm sorry. Okay. Yeah. So the rents for the market rate are around 110 AMI?

[Andrew Foley (Director of Development, Jonathan Rose Companies)]: That's about where we are right

[Russ Scully]: now. Okay,

[Deborah "Debbie" Dolgin (Member)]: thank you.

[Andrew Foley (Director of Development, Jonathan Rose Companies)]: And just to finish that thought, so affordability, we are proposing that at least 20% is at or below 50% AMI, and that the additional 13% we're proposing is somewhere around 70 to 80%. Well,

[Marc Mihaly (Chair)]: just one comment. One of the things we hear, hear, is that the housing crisis in part is a function of matching the type of housing to the need for housing. And there are a lot of people who are older people who live in large houses they don't want to live in, but they want smaller units. And it does occur to me that living near the water in Burlington in a small unit might be attractive, not just to a very young population, but to a retired population or an older population. In which case there's going to be, I just want to emphasize, the mobility needs, some of those bicycles should be electric bikes, you know, you're going to, I mean, speaking for myself, one of the problems with the pro bike community is that sometimes it doesn't think about how large the population is that's either disabled one way or another or older. And that, yeah, healthy lifestyle is really good, but promoting that is a little different. Okay, enough with my But go ahead with the finance.

[Andrew Foley (Director of Development, Jonathan Rose Companies)]: And just to point out that part of the project also includes the construction of two segments of of new streets and stormwater utilities, and so made possible by all of your hard work last session to get to Chippewa passed, which is part of our financial plan here. Oh, just a quick note on sustainability. We are proposing to utilize geothermal rooftop solar and it poses to be one of the first mass timber buildings at scale, thanks to the adoption of a new building code in Vermont at the end of last year, it's a new type of construction that allows us to utilize CLT panels. We've gotten a little bit of funding from the federal government to explore this project. So both development partners are deeply committed to building free mixed income housing, and so we look forward to making this project the next one he's proud of, with a high efficiency energy envelope that it really demonstrates some key great features. Just to talk a little bit about all the funding sources that go into making this project possible, At the federal level, we're proposing to use the 4% low income housing tax credit. As you, I think, have heard from BHFA, that is a credit that is not fully utilized by Vermont and it's effectively given back every year and not utilized. So we're working with BHFA to do a funding structure that allows us to utilize that 4% tax credit on that affordable housing component of the project. We're also going be utilizing solar and geothermal investment tax credits, which for a system that is a really They great way to exist. The geothermal is untouched. The solar we have till July for us did qualify for a vesting provision, so we're racing to try and get the last bit of solar credit before those start to wind down. And then at the state, Chip was make or break for us, so thank you for your work to get that going, given we're creating a new neighborhood as shown, and that's a lot of infrastructure work. And so Chittenden is a really big component of our funding strategy. We're also really proud that we received funding from Sugar Peachex Ox in the 10% Vermont program. I was at Google yesterday announcing us among other players across the state that was key funding to get our cost of capital down, and we could use more Did of

[Marc Mihaly (Chair)]: you go, Was that how much how much? We were awarded initial for this round, $8,000,000,000. 8,000,000. At what percent? It depends on

[Andrew Foley (Director of Development, Jonathan Rose Companies)]: It depends on their so it's around 2%. Around 2%.

[Marc Mihaly (Chair)]: You should just I don't know that it makes a difference, but we currently have before us a bill that would expand the 10% to 12.5%. We've heard about that, and that would be

[Andrew Foley (Director of Development, Jonathan Rose Companies)]: really key for not only our project, but other projects' rent. It's really depend on that low cost debt to lower the cost of borrowing given the high construction costs that we're all facing. We also have applications in with the HCV and VHFA on loans and are working on some pretty innovative new approaches to fund affordable housing within a mixed income building like this. And so look forward to reporting out more on that as both teams are hard at work working with us to figure that out. And then we're also applying on Friday for the state rental tax credit, which is also a key component of our funding strategy. At the city level, we've got CHIP. They have the municipal component, the Burlington Housing Trust Fund that we intend to pursue, and other various incentives. Then on the private side, so going federal, state, city, private, we're using very, very good and competitive construction and permanent loan financing, and are about to announce our lender, is really excited to be working in Vermont at this scale, and the structure we're proposing allows that funding to be tax exempt, which lowers the cost of borrowing by utilizing that 4% tax credit. So they're buying the tax credits? They No, but they're, because we're using the tax credits, we qualify for tax exempt bond financing.

[Marc Mihaly (Chair)]: Beyond the amount of the tax credit?

[Andrew Foley (Director of Development, Jonathan Rose Companies)]: Correct. Oh really? On both the affordable and market rate component. And one of the ways in which these two components are working together to bring down the overall cost of housing. So a few things I would just highlight that, one, the continued expansion of the 10% in Vermont fund would be huge for us and huge for others in the state. And then funding the HCB this year, we know there's a lot of PM priorities and it's a tough year, but that funding is absolutely critical for us being able to deliver these units in Southend. And the one other, just to know, we also are big supporters of the Let's Build Home initiative on the construction sales tax. Our initial estimate for our team was that that could take over a million dollars of construction costs out of our budget, which would go a really long way to helping us close our gap and get to construction.

[Leonora Dodge (Member)]: Yes. So the sales tax that goes towards, doesn't that go partially to ed and partially to does it go partially to transportation too? Yep. That's a tough one. But are you looking at any other communities right now for any other awesome, creative?

[Andrew Foley (Director of Development, Jonathan Rose Companies)]: We're spending

[Deborah "Debbie" Dolgin (Member)]: a lot more time up

[Andrew Foley (Director of Development, Jonathan Rose Companies)]: here in Vermont and we really enjoy being here. We think we got our handful of it for now in the South End, but certainly more we need to know the state, the more we love it.

[Leonora Dodge (Member)]: Just a quick follow-up. How have neighbors reacted to and what's your process been like? Thank

[Andrew Foley (Director of Development, Jonathan Rose Companies)]: you for asking. So we submitted permits the January. Just completed our second public meeting last night and the response has been very positive. So we've gotten through design review board, a lot encouragement, no major concerns. We went through conservation board last night, you know, with folks who care rightfully about stormwater and open space and, you know, and unanimous approval without any deficiency feel like we've gotten. Feels like the conversation really has has changed in the last few years around housing recognition that it's time to get some housing growth. Because we wanted to be able to deliver units the early part of the 2028 and have a full leasing season there. We're really trying

[Marc Mihaly (Chair)]: to get these units. Summer twenty twenty eight? Right.

[Gayle Pezzo (Member)]: That area, or is that?

[Marc Mihaly (Chair)]: No, right here. Oh, right here?

[Deborah "Debbie" Dolgin (Member)]: Yeah, on a second.

[Andrew Foley (Director of Development, Jonathan Rose Companies)]: Those are actually just more units set back, but we do have some space for some of the gardens. It's not in frame here, but we've got a subheader. I see they're co

[Marc Mihaly (Chair)]: marketing with beta. With beta, I know that's true. I

[Leonora Dodge (Member)]: was wondering whether So when you were talking about the distribution of affordable units,

[Andrew Foley (Director of Development, Jonathan Rose Companies)]: Okay. Any

[Marc Mihaly (Chair)]: final questions before we let these wonderful people go?

[Andrew Foley (Director of Development, Jonathan Rose Companies)]: How much have you been have you determined an amount you are seeking from BHTV? We we are in active discussions with them, so we don't we I don't I don't wanna get too far out ahead of the team that they're reviewing. Great. You're making good progress, Karnes.

[Marc Mihaly (Chair)]: Any further questions? Thank you so much for taking time to come and do it with us. Appreciate it. Good luck with the project.

[Russ Scully]: Next,

[Marc Mihaly (Chair)]: we're gonna hear first taking up seven fifty seven, which is, again, manufactured housing and limited equity cooperatives. And we're going to hear I think we're going to hear from Chris Dahlia, who normally is here in the State House, but due to illness is appearing online. Chris, would you are you available at this point?

[Chris D’Elia (President, Vermont Bankers Association)]: Yes, sir. I am.

[Marc Mihaly (Chair)]: Sounds great. And would you like to remain invisible in this situation? We certainly would tolerate it if you prefer this.

[Unidentified (room audio/Zoom relay)]: Hearing online. Chris, would you

[Marc Mihaly (Chair)]: Wait. Are you available at this point? Yeah.

[Leonora Dodge (Member)]: There's a delay.

[Unidentified (room audio/Zoom relay)]: Sounds great. And Something's remain invisible given this situation. We certainly would tolerate it if you prefer that.

[Chris D’Elia (President, Vermont Bankers Association)]: I I appreciate that, mister chairman. It's been a rough few days. Thank you for the opportunity to testify. I I wanted to continue with the testimony because I didn't wanna hold up your bill in any way. We appreciate the work that you've done on July. This is a critical issue to address. And as I understand it you've done it in a way that does not hinder if you will ability to finance mobile homes as personal property. As I've spoken with some of you, the ability to finance both as personal property and as real estate like a home

[Andrew Foley (Director of Development, Jonathan Rose Companies)]: Chris, can

[Marc Mihaly (Chair)]: you hear me? Chris? Could you identify yourself for the record?

[Chris D’Elia (President, Vermont Bankers Association)]: Sorry. Chris Dele, president Vermont Bankers Association.

[Marc Mihaly (Chair)]: Okay. I'm sorry. Go ahead.

[Chris D’Elia (President, Vermont Bankers Association)]: No. That's fine. And so, we appreciate the fact that you continue to preserve that approach in the in the marketplace. And, that's important because I have institutions that do it both ways. Some who finance it as real estate regardless of where it is and others who finance it as real estate if it's on their own land or finance it as personal property if it's on leased land in a park. So by preserving that we greatly appreciate that approach. My concern was if it wasn't preserved then you may see some lenders in the marketplace decide to leave because that's their business model and they want to maintain that flexibility. So I know you folks had a number of questions on financing. I'm happy to answer any questions that you might have, but I just wanted to voice our support for seven fifty seven and the work that you've done here.

[Marc Mihaly (Chair)]: Questions?

[Leonora Dodge (Member)]: Yes. Yes, I'm sorry. Just because there was

[Ashley Bartley (Vice Chair)]: I missed a little bit of your

[Leonora Dodge (Member)]: So you have you've said the land you were describing the current landscape as borrowers who get real estate loans in any of three situations, being on owned land, being on rented land, but then also you said that you wanted us to retain something specifically that Could you do see in the you please just repeat that part? Am I the only one who missed it?

[Ashley Bartley (Vice Chair)]: No. Okay.

[Chris D’Elia (President, Vermont Bankers Association)]: No. I'm I'm happy to step back if you will. So financing in the marketplace occurs under two different business models. One is a bank will lend to a borrower and hold that in portfolio. That means the loan is kept within house. There's different criteria, circumstances that they will look at with the borrower. The second loan is when made and it's sold to the secondary market. The reason that occurs is that's how bank recapitalizes its lending pool. So under those two scenarios, how do we finance manufactured homes? And it goes like this. I have some banks who've met who finance manufactured homes only as real estate And those are typically held in portfolio. So if it's own land that you have or if it's in a cooperative park, it will be financed as real estate. The second option is a combination real estate and personal properties. And again, this depends on the bank's business model. They will find it out and finance it as real estate. But then in those parks that are not cooperatively owned, you lease the land, they will finance it as personal property. And then you have others who only deal with personal property, period. So those are the three different approaches. And my understanding is that those that your bill does nothing to have to impact the way we would finance it. It obviously makes changes in other ways, but it preserves the ability to finance as personal property. My answer

[Marc Mihaly (Chair)]: Just a a comment. I I want to concur with Chris.

[Chris D’Elia (President, Vermont Bankers Association)]: It obviously makes changes in other ways, but it presumably Chris,

[Marc Mihaly (Chair)]: do you want Okay. So, there is a statute, I think it's 26.3, that currently, in current law, says that a loan can be that if it's on owned land, if it's a mobile home, excuse me, a manufactured home, on owned land, it must be done as a real estate loan. But that if it's on land that is leased, like in a manufactured home community or park, it may be done as real estate, and by implication, may be done as a personal. So we talked about that back and forth. There are some advantages to loans that are real estate. There's more consumer protection involved than a real estate loan, but in the end, Chris and others argued to us that there are people who cannot qualify as they can't qualify for a real estate loan, they can't come up with a 20% down payment or the down payment assistance, there isn't enough of it, and that for those people, a personal loan may be better, and so we left that section alone. That's why Chris is saying we didn't mess with that. But, Chris, just for your information, over the weekend, we received, information from East Rise and their attorney indicating a desire for something else. And I'm just bringing it up, but we will hear it later. Apparently, in the world of real estate loans, I'm just talking about a real estate loan now, okay, not a personal loan. Apparently, if you're never intending to sell the loan, in theory the loan can be managed, the ownership could be a deed, or it could be a bill of sale. I was under the misapprehension that it had to be a deed if it's a real estate loan. It turns out that the only reason that that's the case is because the law required it, And so we have before us an amendment to our bill, which still has to be looked at by counsel, which would allow real estate loans to use either a bill of sale or a deed. So, there's even more flexibility if we do that. Chris, we haven't done it yet, it's just literally developed over the weekend, but I wanted you to know that. Can you unmute? Wanted to

[Unidentified (room audio/Zoom relay)]: flexibility if we do that. Chris, we haven't done it yet. It's just literally developed over the weekend, but wanted you to know that.

[Chris D’Elia (President, Vermont Bankers Association)]: Yeah. I appreciate that, mister chairman. That's helpful to know. I'm happy to look at the language, but that sounds like as long as there's that flexibility, that would work well.

[Marc Mihaly (Chair)]: I think indeed it's probably necessary if you intend to sell the loan.

[Chris D’Elia (President, Vermont Bankers Association)]: Yes.

[Marc Mihaly (Chair)]: But I don't know, and they don't.

[Chris D’Elia (President, Vermont Bankers Association)]: I appreciate

[Unidentified (room audio/Zoom relay)]: that, mister chairman. That's helpful to know. I'm happy to look at the language, but that sounds like as long as there's that flexibility, that would work well.

[Marc Mihaly (Chair)]: I think it's Go ahead.

[Leonora Dodge (Member)]: I have a quick question. Do you have a sense how challenging it is for folks to actually repay the loans on personal loans as opposed to mortgage loans when they enter into that kind of arrangement with a bank? Like, what I guess it would be what? Like, rates of defaulting compared to rates of default on personal loans versus mortgages or real estate loans?

[Chris D’Elia (President, Vermont Bankers Association)]: Representative, I'm sorry. I don't have that default data in front of me. But what you should keep in mind is one on a real estate loan, we have to do an ability to repay analysis. That's something that came out of the great recession that we are responsible to do. Under the personal property, we're going to do an underwriting of that loan to look at all of the circumstances around that borrower to ensure that they do have the ability to repay it is not in our best interest nor theirs to provide a loan that they're going to struggle with now obviously circumstances can change over time but going into it the underwriting criteria looking at it, it's to take into consideration all of their circumstances so that if we make the loan, they've got the ability to repay.

[Marc Mihaly (Chair)]: Thank you. Thanks. Other questions of Chris? Tom?

[Thomas "Tom" Charlton (Member)]: I'm curious to know if a mortgage is being pursued and the land is not owned, there still has to be some satisfactory loan to value ratio. So is the down payment correspondingly higher to meet that generally? Yes,

[Chris D’Elia (President, Vermont Bankers Association)]: it would be in that circumstance because it's going to be treated as personal property on leased land. Yeah.

[Marc Mihaly (Chair)]: It's usually it's it's for East Rise, at least, it's 20%. And I think also for other credit unions that do it stoppage. It's 20% down payment, and most of them don't do a 10. That's from mortgage. Yeah. 20% down payment for a real estate loan with a mortgage. Okay.

[Thomas "Tom" Charlton (Member)]: If, or just going back to what we were talking a few minutes ago, if the land was deeded, they own their own land, and they get a bill of sale for the housing unit, the the land transaction has to be a deed to be recorded. Right. But if the if there are two separate pieces of property, does that affect the land? I I I'm tripping over my question. I know I am.

[Marc Mihaly (Chair)]: One thing that might help you, as awkward as it sounds, there are many people who walk into a transaction with a manufactured home, and all they have is a bill of sale, okay? Whether they own the property or they don't. Alright? So, they go to a bank, Chris, if I'm misstating this, tell me. They go to a bank, they walk in and their only manifestation that they own this thing is a built sale. But it's going to be a real estate transaction, let's say. So, the loan is going to be a loan, it's a real estate loan backed by a mortgage. The mortgage will be solely on the home, on the unit. So how do they end up with a deed right now? The way they end up with a deed is they make the buyer deed the property to themselves. And so, they have to pay a lawyer and they deed the property to themselves. Does that help you? Is that what you're but the mortgage is only on the real property. I mean, excuse me, on the own. It's not on the land because the land is owned by somebody else.

[Thomas "Tom" Charlton (Member)]: Right. And I'll pursue my question. Yep. Yeah. Elsewhere. I'm more curious as to when there is an an owned piece of land.

[Marc Mihaly (Chair)]: Yeah. Then then they can do a regular they can, do a regular mortgage. Gayle.

[Gayle Pezzo (Member)]: Typically, if it's an individual that owns the home, the box, on land separate, it would be treated the same as a stick built. If it's in a community, whether it's a private owner, that's leased land. Even if it's a private owner that owns the park or a cooperative or a nonprofit. So purchasing that home was up until this last year was most of the time personal property, chattel, chattel loan. In the last year, depending on the bank, they're considering it real property. So, the idea of the bill was not to eliminate that personal property loan for people who may not be eligible for a conventional mortgage. Not gonna see in a mobile home park people that own the land. That would be an HOA.

[Marc Mihaly (Chair)]: Right. Or just somebody who moves Or a separate, yeah. Yeah, they have a piece of property and they move, and they put a mobile home on Any further questions of Chris? Chris, I hope you feel better soon. Thank you, Chris.

[Chris D’Elia (President, Vermont Bankers Association)]: Thank you folks, take care.

[Marc Mihaly (Chair)]: Just by way, just for one minute, just by way of background, again, I really appreciate that the committee is willing to delve into the arcanidies of real estate transactions. You're all becoming real estate transaction lawyers. At least honorary.

[Gayle Pezzo (Member)]: It's fun.

[Marc Mihaly (Chair)]: Yeah. But it's There's a long history of transferring things in The United States, selling them as personal property. In the classic case, including cases that are abused all the time, I saw this as a legal aid attorney, someone walked in and they bought a whole dining room set on credit. And it's not like charging it to your credit card at 18%, you know, which is what would happen if there was no security. But instead, they buy it with a personal loan, and it's governed by the Uniform Commercial Code that's adopted by whatever state they're in, but what happens is with those, this dining room set is the security for your payment, so instead of paying 18%, you're merely paying 10% for something like that, or 9%, whatever it is, and you make payments, but if you miss a payment, they just come and take the dining room set. They don't give you back what you paid, you just take the dining room set. A real estate loan, real estate has a whole history in The United States of pro consumer legislation, which admittedly is not perfect by any means, I mean, are all kinds of problems with real estate loans, but real estate, with a real estate loan, you go into a bank and you say, I want to borrow a $100,000. The bank isn't going to just write you a check for a $100,000. They want security too. The reason their interest rates are relatively low, not 18%, but 7% or 6%, is because they have security, And the security is the house. But, so the first thing I'm going to get into detail here, but it's something you guys, since you're turning into transactional attorneys, you should know. The first thing you do is you borrow the money, and the way you borrow the money is with what's called a note. You give them the note says, if I'm borrowing a 100,000, it says, I, Marc Mihaly, will pay you $100,000 in the form of monthly payments for twenty years of x. That y interest. Okay? That's the note. It's just a contract that says I'll pay. That's all it is.

[Leonora Dodge (Member)]: That's what a banknote is literally a that's what that's literally contract. Just a fancy word

[Marc Mihaly (Chair)]: it is. Oh, Fancy word for a contract. They're all contracts. They just tell you it's just one where I say, oh, you give me the land, I'll pay you the money. Okay. Then there is a separate contract, and that contract is one where I I say to the bank, and if I don't pay you, you can take my land. Okay? That is called a mortgage. And that mortgage that's all it is. It's just a name name for another contract. It's a separate contract, and it says that if I don't make good on the note, they can take the the land. But there's been generations of consumer legislation that says, yeah, but they have to give you warnings, they have to give you an opportunity to pay, and then even if they take your land, take your house, you have a right to cure, you know, come up with the payment later. There's all kinds of protections for consumers built into legislation around The United States and federal legislation on protecting the consumer around mortgages. Like I said, I'm not trying to say that it's ideal, believe me, but it's more than there is with personal loans. But personal loans, so, there's a movement, you heard about it from the woman from Pew Trust, there's a movement amongst people who want to regularize the purchase of manufactured housing, to try to get more and more of them into the world of real estate. With all this protection. And it's working in some places and not working in others. And we're in this hybrid situation where we're encouraging real estate, but we're allowing, Chris Daley was saying, don't go too far or you will inadvertently hurt some of the poorest people who unfortunately must use the personal property as the device. Okay. Our next witness, Laura, is she is Laura here? She's here. Alright. So, Laura, can you hear us?

[Laura E. Gorski (Real estate attorney)]: Yes, I can. Can you hear me?

[Marc Mihaly (Chair)]: Hi. We can hear you. We cannot see you. Do you want to be seen?

[Laura E. Gorski (Real estate attorney)]: There you go.

[Marc Mihaly (Chair)]: Okay. Laura, welcome to the committee.

[Laura E. Gorski (Real estate attorney)]: Thank you.

[Marc Mihaly (Chair)]: Would you tell us your name for the record and give us your testimonies?

[Laura E. Gorski (Real estate attorney)]: Absolutely.

[Marc Mihaly (Chair)]: Oh, well, you know what, Laura? You well, tell give us your name for the record first.

[Laura E. Gorski (Real estate attorney)]: Laura E. Gorski.

[Marc Mihaly (Chair)]: Okay. And you're a private counsel? I am. Yeah. And why don't we introduce ourselves to you because you, unlike many of our witnesses, have never been here before us. So, Debbie, do you wanna start? Sure.

[Deborah "Debbie" Dolgin (Member)]: I'm Debbie Dolgin. I represent Saint Johnsbury, Concord, and Kirby. Great.

[Thomas "Tom" Charlton (Member)]: I'm Tom Charlton, represent Athens, Chester, Windham and Drafton. Joe Parsons, Newberry, Thompson, Giraffe.

[Leonora Dodge (Member)]: Leonora Dodge from Essex Town, St. V. Essex Junction. Hi.

[Marc Mihaly (Chair)]: Hi.

[Ashley Bartley (Vice Chair)]: Ashley Bartley. I represent Fairfax and the majority of Georgia.

[Marc Mihaly (Chair)]: I'm Marc Mihaly, Caledonia, Plainfield and Marshfield, and I'm chair. Go ahead. Saudia LaMont, Lamoille, Washington District.

[Deborah "Debbie" Dolgin (Member)]: Hi, I'm Elizabeth Burrows and I represent Windsor 1, which is Heartland's West Windsor in Windsor.

[Mary E. Howard (Clerk)]: Hello, I'm Mary Howard and I represent Rutland City District 6. Hi, Laura. I'm Gayle Pezzo, and I represent Chittenden 20 Colchester.

[Laura E. Gorski (Real estate attorney)]: Great.

[Marc Mihaly (Chair)]: So also, we have Emilie, do you wanna introduce yourself if you are?

[Emilie Krasnow (Ranking Member)]: Emily Krasnow. I'm online. Emilie Krasnow, South Burlington, Chittenden 9.

[Marc Mihaly (Chair)]: Great, Laura. One of the interesting things about this committee is there's people here from all the different kinds of places in Vermont. There's people from more urban parts and from the very rural parts and the in between parts. So, take it away.

[Laura E. Gorski (Real estate attorney)]: Great. Well, thank you for having me. As you mentioned, I am a sole practitioner. I practice in Richmond, Vermont. I service the areas of Chittenden, Franklin, Addison, Washington, Grand Isle. I'll go pretty much anywhere in the state depending on the transaction. And I opened my own practice in 2019. And in doing that, I had a lot of experience with mobile home parks. And I started working on some mobile homes, mobile home loan transactions with a local lender. And so the majority of real estate attorneys in Vermont don't have a whole lot of experience with mobile homes because it might make up anywhere from like one to 5% of their practice. Whereas I handle a number of mobile home transactions that probably makes up about 20% of my real estate practice. So I just have a lot of experience with mobile home loans and was asked to speak to you a little bit about the closing process. I have looked over the bill as introduced on the most recent version that I received. I do support the idea of the bill. I think it still needs a little bit of tweaking yet, at least the version that I was able to review. I think one of the most confusing things for borrowers, for lenders, for attorneys, for town clerks, is utilizing a mobile home bill of sale versus use utilizing a warranty deed. And I think one of the, you know, problems, that we see right now is in the statute, the word shall versus may. So we're making it required for real estate loans to be utilizing this warranty deed. And some of the confusion that exists specifically on the recording level is every town has their own way of indexing documents. And so there's variation when I go do a title search in Virgins, it's different than when I go do a title search in Bolton as to where I might find those different documents, whether it was a mobile home bill of sale or a warranty deed or a UCC or a mortgage deed, whatever the respective documents are. So there's just a lot of things to look at when you go to do a mobile home search. Yes.

[Marc Mihaly (Chair)]: Go ahead. Just a question. And anyone else who has a question, don't hesitate to jump in. The bill of sale, is that that's a recordable document? Yes. And that's not is the UCC's the UCC document, is that a separate from the bill of sale?

[Laura E. Gorski (Real estate attorney)]: It is.

[Marc Mihaly (Chair)]: Is it recordable?

[Laura E. Gorski (Real estate attorney)]: It's recordable in two different ways. It's the UCC dash one financing statement that is utilized to secure a lien against a mobile home used as collateral for a personal property loan. It is recorded primarily on the Vermont Secretary of State's website in their UCC filings. It's similar to what you might get recorded if you were to purchase a brand new tractor from John Deere Financial and they wanted to record a lien. That's the same thing that these UCCs are doing for mobile homes. Some of the local lenders and local attorneys will go so far as also recording that UCC in the local land records. One of the reasons for doing that is, as I just mentioned, as a title searcher, when you're looking at mobile homes, there's a lot to look at. So if for instance, that UCC is only recorded in an online index that's maintained by the secretary of state's office, some title searchers might miss it if it weren't actually indexed in the local town land records. But by law, it's only required to be recorded in the UCC filings that are maintained by the secretary of state's office.

[Marc Mihaly (Chair)]: You said there were two documents. What's the other?

[Laura E. Gorski (Real estate attorney)]: Mobile home bill of sale, UCC. I guess I was just mentioning that there's there's two distinctions between the deed and the bill of sale.

[Marc Mihaly (Chair)]: So the UCC one, am I right? It's the property version, excuse me, the personal property version of a mortgage.

[Leonora Dodge (Member)]: Correct.

[Marc Mihaly (Chair)]: Yes. Okay. Please go ahead.

[Laura E. Gorski (Real estate attorney)]: Yes. The UCC one is how we perfect a lien against a mobile home, and perfect is a term we use when we talk about collateral and making sure that there would be the ability to collect against that as a lender. So the UCC gets filed with the secretary of state's office on mobile homes. They're good for a period of thirty years. So the lender only has to file on that one time. And then once the lien is paid off, that UCC is released. If that particular lender did file a copy locally in the land records, they're also in the habit of discharging or releasing that lien from the land records as well. But one of the things that I support with the bill is just adding some consistency here. So right now, there's a distinction between what type of loan you're getting as to what type of title document you're going to get, whether it's a bill of sale or a warranty deed, and then also what type of loan document you're going to receive, whether it's UCC one or a mortgage deed. And I think that's just confusing from a borrower standpoint, an owner standpoint, town clerk, from everybody that's involved in the transaction. And depending on the attorney that's handling the transaction and conducting the closing, that might vary from office to office too, as to what's being recorded in the land records or whether or not they're securing it with a mortgage. There's some variation from different attorneys' offices. So there's there's lack of consistency here, which I think just leads to confusion.

[Marc Mihaly (Chair)]: Well, Laura, let me ask you. One of the things that we have heard consistently from bankers here, including just now Chris Daley, who's the Bankers Association, is that we should leave let me back up. We have heard that for consumer protection purposes, national organizations such as the Pew Trust, which are advocating for making it easier to own and finance mobile homes, manufactured homes. They like the real estate status, the real estate loan, etcetera. But what we've heard from bankers here is that though even East Rise, for example, which is moving entirely to real estate, is that we should leave open the option of abil of using personal loan because there are people who cannot qualify for a mortgage. Well, they can't qualify for a real estate loan because they can't come up with a down payment or they don't have the credit score, etcetera. So we've left that duality in the statute. We have not messed with that duality. Are you saying that you think we shouldn't be doing that, that we're only perpetuating confusion? Do you have ideas for how we make it less confusing?

[Laura E. Gorski (Real estate attorney)]: Jeez. I think specifically, confusion would be eased if there was only one title document. And I think historically, as, attorneys and town clerks and people involved in in developing these documents, I think the mobile home bill of sale is accepted. It's only been in recent years that people have really been requiring this warranty deed through the conversion process that's mentioned in the statute. And the other, you know, difficulty with that is that these town clerks are not familiar with the term purging. So as the closing attorney, when we say, okay. We have a bill of sale. Johnny received a 2002 mobile home by mobile home bill of sale from Fecto Homes in 2002. Now Johnny wants to mortgage with East Riser, another local lender that wants to do it as real estate. So we're requiring this conversion process, which requires documents to be purged. Historically speaking, a town clerk does not purge public records. That's part of their record keeping job is to keep things like that on file. And specifically, as I was mentioning, there's variation from town to town. When you take a mobile home bill of sale and you record it in the public land records in volume 22 at page 39, you can't purge document. It has become part of the public record. Whereas in Virgin's, for instance, they record mobile home bills of sale in a folder in the vault. Berlin has a binder in their vault. So those documents aren't necessarily incorporated into the public land records. Whereas, you know, Burlington in recent years has put them in the public land records. So there's variation between recording offices as to where those documents are recorded. So sometimes we're getting pushback from the town clerks for this purge process because their job is literally to keep records, and now we're telling them to purge something that was recorded twenty years ago or ten years ago. I think that's difficult.

[Marc Mihaly (Chair)]: I think the current draft of the bill eliminates purging and conversion. Okay. Yes. No. Leonora had a Leonora.

[Deborah "Debbie" Dolgin (Member)]: No. That was a while

[Marc Mihaly (Chair)]: ago. Yeah. I understand. Think we're trying to get to a point where conversion isn't necessary.

[Laura E. Gorski (Real estate attorney)]: Okay. I I would support that. Specifically, things that I have potential problems with are right now, at least the most recent version that I saw where we referenced twenty six zero four a, b, and c. I think that needs to have a little bit more tweaking when we talk about the distinction of may versus shall. Right now, there's language in there that says we may finance a mobile home as real estate. But then in '20 in, nine VSA twenty six zero four, we then require it. And we say any transactions after 07/01/2008 from a manufactured, from a mobile home dealer shall be conveyed by a warranty deed. So, you know, initially, in '9 VSA twenty six zero three, we talk about it may be financed as real estate, but then we require this conversion process.

[Marc Mihaly (Chair)]: I'm really delighted to hear your testimony on this because I spent the weekend with various lawyers talking about this. We are amending well, I'm going to be proposing to the committee that we instruct our attorney to amend twenty six zero four to make to allow either a bill of sale or a more either a bill of sale or a note in mortgage. So

[Laura E. Gorski (Real estate attorney)]: And I applaud your efforts on that. I think that that would be wonderful. I think it is important for some of these low income borrowers to have the option. I I will also just throw out there, I know you've received testimony from East Rise and other lenders about interest rates, and some of the personal property loans that I'm closing on right now are 5.99 fixed rate for a twenty year term. That's pretty competitive. You know, our mortgage rates are even higher than that right now. So depending on the local lender and the consumer product that's available, you don't see the high interest rates. I've been in this profession for going on seventeen years. And, you know, fifteen, seventeen years ago, it was not an uncommon to see an interest rate of 19% on a personal property mobile home loan. That is not the case today. There are there are competitive consumer products out there with lower interest rates for personal property loans.

[Marc Mihaly (Chair)]: What's the term on those?

[Laura E. Gorski (Real estate attorney)]: Generally, it's a twenty year term, twenty max, but some borrowers will go fifteen to be competitive and get it paid off quicker.

[Gayle Pezzo (Member)]: Yes. Is that only for new homes?

[Laura E. Gorski (Real estate attorney)]: No. That's for used mobile homes or manufactured housing units as well. Specifically, it's up to the lender. They have certain criteria that would have to make a used mobile home eligible, but I've seen loans on, you know, some some nineteen eighties, nineties versions. As long as they meet the the criteria that the lender is looking for, they'll give a loan.

[Gayle Pezzo (Member)]: Is that off a lot, or is that already landed? It's pre owned and the seller owner the homeowner is selling it.

[Laura E. Gorski (Real estate attorney)]: Both instances. I've certainly seen it in a mobile home park on a on a lot with a, 1980s, 1990s used mobile home. As long as it meets the criteria, I've seen a 5.99% interest rate.

[Marc Mihaly (Chair)]: Is there what kind of down payment is required usually on those?

[Laura E. Gorski (Real estate attorney)]: That would be something I'd have to specifically ask the lender. A lot of the new mobile home loans I'm seeing right now are getting a second mortgage with Champlain Housing Trust. Right now, they're the the down payment assist program But for on older mobile homes, usually it's determined based on the appraisal value, I think they're still at an 80% threshold on that. But I would have to ask my particular lender.

[Marc Mihaly (Chair)]: Laura, did you have other specific comments on the legislation? Do you have language changes that you want to get to us via text or email or just other thoughts?

[Laura E. Gorski (Real estate attorney)]: I have a couple of things to to talk about really quick. One thing that I wanna mention specifically on mobile homes, and, it sounds like you're you support this in giving the option of a bill of sale and a warranty deed is these are low income folks. And sometimes people are preparing their very own title documents and showing up at the town office to sign a mobile home bill of sale and a Vermont property transfer tax return for better or for worse. But it is being done. And I think having it be required to prepare a warranty deed and hire an attorney is just another hurdle for some of these already strapped income folks. So that's just something else that I would ask you to consider. And then in addition to this bill, something that hasn't been addressed yet that I'd just like to bring to your attention is, effective in July 2020, the enhanced life estate deed statute was passed. And in looking at that language, we do not give any consideration for mobile homes. It's a gray area. So as a homeowner, I can transfer my property to my heirs via a life estate deed if it's real estate. But if it's a mobile home in a park, I'm unable to do that. As attorneys, we are, you know, including some of that life estate language in mobile home bills of sale, but there's really no law that makes that a possibility. And not that that has anything to do with the bill that's presented in front of you, but it is another obstacle for mobile homeowners that they're not able to do this life estate transfer. We are preparing the deeds and most of the time they're being recognized, but by law they're not. So that's just another thing I'd like you to consider.

[Gayle Pezzo (Member)]: Yes, go ahead. So that life estate, I think you and I had spoken about this a while back. I have that for my daughter, I only have one child. So that would not hold up if there was two children and I only at least left it to her.

[Laura E. Gorski (Real estate attorney)]: It may not hold up because right now the law doesn't allow for that tool. We as real estate attorneys are familiar with that because we see it in deeds and things like that. So depending on the title attorney, so depending on who the buyer's attorney is, whether or not that buyer is getting a mortgage, whether or not the title company would verify it, someone may or may not uphold that mobile home bill of sale. Like I said, I've seen plenty of them out there. I've prepared plenty of them. But the statute doesn't actually allow for it. And I think that's just something that's that's lacking here when we talk about mobile homes.

[Gayle Pezzo (Member)]: Thank you. You're welcome.

[Leonora Dodge (Member)]: That's a separate that's language in a completely separate statute.

[Marc Mihaly (Chair)]: Yeah. That has to do with the states. Yeah. Exactly. We might wanna look at in round two, but yes.

[Laura E. Gorski (Real estate attorney)]: It's title 27 chapter six.

[Marc Mihaly (Chair)]: Great. Thank you.

[Laura E. Gorski (Real estate attorney)]: Yes.

[Marc Mihaly (Chair)]: What else? One

[Laura E. Gorski (Real estate attorney)]: thing that I think the bill probably should consider if we're going to allow both mobile home bills of sale and warranty deeds is how that's going to affect future owners. Right now, as written, the statute says once we convert to a warranty deed, we can't ever go back. So that means once Joe converts his mobile home to a warranty deed and he sells it to Sally ten years later or five years later, Sally can never get a personal property loan. She is mandated by that conversion process to continue utilizing it as real estate. So one thing that the bill really should consider is how future transfers are going to be impacted. Is it okay that Joe got a warranty deed and now he transfers to Sally via via a mobile home bill of sale? I don't I don't know how we would determine that other than by specifically limiting the title instrument and saying we're just gonna convey everything via a mobile home bill of sale, which I don't see the the problem in doing. But that's just something to consider too is what's gonna happen with future transfers down the road.

[Marc Mihaly (Chair)]: Thank you.

[Laura E. Gorski (Real estate attorney)]: You're welcome.

[Marc Mihaly (Chair)]: Anything else?

[Laura E. Gorski (Real estate attorney)]: It it wouldn't be a bad idea if the bill gave some form of instruction to a town clerk of how to record some of these documents. For instance, mobile home bills of sale right now, like I said, vary from town to town. Some towns I can, find those documents online. Like if I was looking in Colchester, I could find a mobile home bill of sale. If I was looking at the online indexing in Virgin's, for instance, I would not see any mobile home bills of sale and it would require me to drive to Virgin's and look for that mobile home bill of sale. That's fine. And that's what we're accustomed to as title searchers. But it might be helpful if we gave some instruction to town clerks just to offer some consistency, just that mobile home bills of sale should be recorded in the land records and should be made publicly available with local land records because it varies from recording index to different towns.

[Ashley Bartley (Vice Chair)]: Yes, Ashley. Not necessarily a question for Laura, but more for Pezzo because you served on the study committee, correct? I think that's a great point, and I really appreciate you bringing this to us, especially because I think a lot of the conversations that we've just continuously had, not just with this bill, but almost every other housing bill, is the capacity that our municipalities have. That ever come up in the study

[Deborah "Debbie" Dolgin (Member)]: committee? Okay.

[Marc Mihaly (Chair)]: One thing I want to ask, let's pursue this for just a minute, because we have heard in other testimony that there's problems of inconsistency. Do you think that we are ready now to insert in this bill legislation that would direct clerks to record it a certain way? Or do you think we need some sort of process whereby the Clerk's Association and other interested parties get together and come up with a solution. I mean, are we ready? I mean, if I said to you, do you have language? Give it to me. Would you? Or would you think that in order to socialize this or in order to to get it broadly adopted or to come up with the right way, we'd need a committee or some sort of summer study process, etcetera.

[Laura E. Gorski (Real estate attorney)]: I I think the latter option. I think our town clerks are instrumental in what we do here in Vermont, and they all vary from municipality and I would wanna include them in the process and figure out a way just to make it consistent specifically for mobile homes. It is a gray area. These mobile home bills of sales sometimes are recorded in the land records and sometimes not. And it's difficult as a title searcher to know where to find those things. Oftentimes when I go into a new town I've never been in before, okay, take me through the vault. Where do you keep mobile homes? What about UCCs? So there's just variation.

[Marc Mihaly (Chair)]: Is there an agency? One way to do it is to convene a summer study committee. That's its own thing. But is there an agency? If we had to pick an agency to head up this consultation process, do you have any thoughts as to which agency it would be?

[Laura E. Gorski (Real estate attorney)]: No? No. I mean, CVOO, Vermont

[Leonora Dodge (Member)]: State Housing Authority. Yeah.

[Marc Mihaly (Chair)]: Yeah. Marc? Yes.

[Emilie Krasnow (Ranking Member)]: We have we have a I was gonna say, yeah, maybe VLCT, but we also have a long time city or town clerk in our body if

[Marc Mihaly (Chair)]: you wanna

[Emilie Krasnow (Ranking Member)]: talk to Sandy at all.

[Marc Mihaly (Chair)]: Yeah. That'd be great. Yep. Alright. Gayle, did you wanna say something?

[Gayle Pezzo (Member)]: Gloria, if we were not to do that, do you have a suggestion of language?

[Laura E. Gorski (Real estate attorney)]: Language related to recording these these documents and offering consistency. I think just not having a separate mobile home index would be helpful at this point. I think incorporating them all into the public land records, which again, some municipalities have done. And I I just think as we're transitioning since COVID, so many towns have gone online with their record keeping that it it's a convenience for a title searcher, but it's also just you know, it varies from town to town. So I think just having a requirement that mobile home bills of sales should be recorded right in the public rec land records would would be beneficial because at least there'd be consistency.

[Marc Mihaly (Chair)]: Any further questions of Laura? Well, Laura, a thousand thank you for taking time away from your practice.

[Laura E. Gorski (Real estate attorney)]: Thank you. Thank you for this meaningful work and for supporting these Vermonters who desperately need access to legal services. When these folks show up in my office where they're closing, sometimes that's the very first time they've even interacted with an attorney. So this is important work you're doing. Thank you.

[Deborah "Debbie" Dolgin (Member)]: Thank you. Thank you. Thank you.

[Marc Mihaly (Chair)]: Yes. I just want

[Deborah "Debbie" Dolgin (Member)]: to make a comment, which is that, I don't know. I was just trying to look it up. It's kind of too complicated to look up right now. But I think in 2022, as legislators, we passed the Town Records Modernization Act. And I know that those are rolling deadlines, and I wondered whether it actually would fit in well with where those are.

[Leonora Dodge (Member)]: Do

[Marc Mihaly (Chair)]: you know who I wonder who what committee did that. Gov Gov ops.

[Deborah "Debbie" Dolgin (Member)]: They had all the town clerks come in and testify on it. I remember because I had a town clerk related bill at the time, and it was timed for the same day as the So that was definitely 2022. Okay.

[Marc Mihaly (Chair)]: I think the last point It sounds like a lot of her points we've actually dealt with in proposed revisions that we can discuss in Marc up, which is coming up after a break. Last one is very interesting because hello, Emilie. This last one is very interesting just because we've heard about this confusion, and I think Gayle and I will nose around and see if we can come up with something. But meanwhile, we're gonna take a break and reconvene around 02:30 for discussions about the bill, Marc up, and Cameron

[Andrew Foley (Director of Development, Jonathan Rose Companies)]: will be