Can a Tenant be a “Landowner”?

Can a tenant challenge the issuance of a dredge and fill permit for a neighboring property? More specifically, can a tenant be considered a "landowner" for the purpose of appealing a Wetlands Bureau permit for an adjacent parcel? The New Hampshire Supreme Court addressed this question in Appeal of Port City Air Leasing, Inc. (2024 N.H. 71).

Background

Port City Air Leasing, Inc. (Port City) leased land and buildings located at Pease International Tradeport from the Pease Development Authority. The lease provided that Port City could use the property to offer certain aircraft-related services. Million Air Portsmouth (Million Air) proposed to lease land abutting a portion of Port City’s premises from the Pease Development Authority to build and operate a facility also providing aircraft-related services.

In connection with this proposal, Million Air submitted an application to the DES Wetlands Bureau for a permit to dredge and fill wetlands to construct an access road to the proposed facility. The Wetlands Bureau issued the permit in June 2022. Port City filed an administrative appeal of that decision with the New Hampshire Wetlands Council (Council), claiming DES’s issuance of the permit was unlawful and unreasonable. The Hearing Officer permitted Million Air to intervene in that proceeding.  Million Air subsequently moved to dismiss the appeal, arguing Port City lacked standing. (Generally, only persons with “standing” may participate in administrative or court proceedings.)

Wetlands Council’s rulings

The Hearing Officer decided that Port City could not appeal DES’s decision because it was not a "person aggrieved" as defined by applicable law. Under RSA 482-A:10, I, a "person aggrieved" includes the applicant and anyone entitled to receive notice of the decision by mail, as specified in RSA 482-A:8 and RSA 482-A:9. Port City argued it was entitled to notice under RSA 482-A:9 because it was an "abutting landowner." The key issue became whether Port City qualified as a "landowner" under the meaning of RSA 482-A:9.  The Hearing Officer also rejected Port City’s argument that the statutes were unconstitutional if they did not afford Port City standing.

Port City filed a motion for reconsideration and rehearing, which the Hearing Officer denied. Port City then appealed to the New Hampshire Supreme Court.

Supreme Court decision and reasoning

On the issue of standing, the Court agreed with the Wetlands Council that Port City was not a "person aggrieved" under RSA 482-A:10, I because Port City did not meet the statutory definition of an "abutting landowner."

Determining whether a person is a "landowner" under RSA 482-A:9 is a fact-driven inquiry that depends largely on the scope of the interests held. The analysis centers on whether the person’s interests are sufficiently expansive and enduring to approximate fee ownership.

Much of the Court’s analysis contrasted the Port City lease with an easement described in Appeal of Michele, 168 N.H. 98 (2015).  The Court had held the easement in Michele rose to the level of ownership for purposes of the sections of RSA 482-A dealing with dock permits.

Although both Port City and the easement holders in Michele had the apparent right to exclusive use of the applicable premises, the easement holders in Michele could use their easement “for whatever purposes they may desire,” while Port City could use the leased premises only for the limited purposes enumerated in the lease. In fact, the lease prohibited Port City from engaging in “any use” not “specifically granted” in the lease “without the prior express written consent” of the lessor.

The lease also limited Port City’s control over the leased premises by, among other things, requiring it to obtain lessor approval before making any improvements or alterations to the leased premises. The court contrasted that limited right with an express easement where the grant bestows by implication whatever rights are reasonably necessary to enjoy the easement, including the right to make improvements.

Port City also did not hold title to the leased land, whereas the easement holders in Michele held title to a deeded easement appurtenant to their non-waterfront property. Such an appurtenant easement would run with the non-waterfront property — the dominant estate — and be transferable and inheritable with it. In contrast, Port City held title only to the buildings and improvements on the leased premises, and it held that title only for the duration of the lease, which had a maximum term of thirty years.

The Court also noted that Port City’s interests in the property were not freely transferable.  Its ability to assign or sublease any part of the premises was, with limited exception, subject to the lessor’s approval.

While acknowledging the Port City lease granted other benefits and burdens arguably attendant to land ownership, such as the ability to mortgage its leasehold interest, seek tax abatements, and the obligation to pay municipal fees and taxes on the leased premises, the court did not find those additional benefits and burdens sufficient to make Port City’s interests in the leased premises “tantamount to fee ownership.” The Court therefore concluded that Port City was not a “landowner” for purposes of RSA 482-A:9, and, consequently, not a “person aggrieved” with standing to appeal to the Council under RSA 482-A:10, I.

On the constitutional issue, the Court determined that the statutory scheme did not violate Port City's due process rights. The Court noted that the permitting process provides public notice and opportunities for comment, which satisfy procedural due process requirements. Port City had the opportunity to participate in this process.

For assistance with variances, special exceptions, building permits, lot mergers, subdivisions and other real estate matters, please contact our office at (603) 856-8411 or at this link.