North Haven Village Plans Rules To Prohibit Fractional Schemes For Homeownership

North Haven Village. FILE PHOTO

Citing a website called Pacaso that sells shares in luxury market second homes in Florida, Colorado and other hot spots for the wealthy, North Haven Village Mayor Jeff Sander last week unveiled proposed legislation to prohibit “fractional ownership, time sharing or interval uses” of real estate anywhere in the village.

“This was precipitated by a lot of activity across the country” promoting “interval ownership,” he explained at the December 15 monthly Zoom session of the North Haven Village Board, “and we’re concerned that they may soon show their presence in the Hamptons and North Haven.”

The ownership scheme “encourages a lot of turnover in the use of the property,” he said, which would undermine North Haven’s zoning code. The village’s only two zoning districts are both for single-family use.

The board agreed to set a public hearing on the legislation, which Village Attorney Scott Middleton was still drafting, at its next meeting at 5 p.m. on Tuesday, January 18. The text will be published as a legal notice in an upcoming edition of The Sag Harbor Express.

“Own your dream second home for less cost and hassle with Pacaso’s co-ownership model,” read the results of a Google search for the term, “interval ownership.”

“Not a gimmick, definitely not a timeshare,” reads the online plug for Pacaso’s webpage, “How Pacaso Works: Co-ownership, Simplified.”

According to a promotional video, Pacaso sets up a limited liability company to acquire real estate and divides it into eight ownership shares, which Pacaso sells on the open market. Pacaso retains no interest in the property but remains available to manage scheduling through an app and oversee maintenance. The shareholders pay all the bills for maintenance, taxes and insurance.

As stated in the current draft of North Haven’s proposed legislation, “The creation of fractional ownership, time-sharing or interval projects are prohibited in single-family residences within the village.”

The proposal defines “fractional ownership, time-sharing or [an] interval project” as any real estate for which “ownership is divided among three or more unrelated owners,” and its “use, possession or occupancy … is transient in nature based on an arrangement, schedule, plan, agreement, license, or any other means or scheme whereby an owner of the property receives ownership rights or the right to use the property for a period of less than six months.”

Sander said the legislation, if adopted after next month’s public hearing, “could be challenged legally,” but would be “a deterrent” to any company “coming in to North Haven” with the aim of selling homeownership fractionally.

He promised “more detail” when the proposal is aired at next month’s hearing.

Also at the Village Board’s December 15 session, Trustee Terie Diat offered a slide show highlighting the results of an online community survey she conducted on the board’s behalf over six weeks this fall. Some 30.6 percent of potential respondents participated in the survey, a total of 402 people. She called it “an excellent response rate” that has given the board “great insight into what people are thinking and where we should be focusing our efforts for North Haven.”

The survey identified several areas where almost all respondents agreed the board should focus attention: water quality protection, preserving open land, tick management, and the “beautification of public places.” It also found widespread dissatisfaction with cell service.

Based on the survey, Diat listed the board’s “action step” priorities as: water quality and the health of creeks and bays; maintaining efforts with the Town of Southampton to preserve open land; deer and tick management; beautification of public places; and shoreline erosion policies, which Diat is working to draft. She said proposed regulations should be ready for a public hearing in February.

Also on the priority list is the “renourishment” of Stock Farm trails; greater enforcement of code regulations; and strengthening “dark sky” light pollution legislation.

In other news at the December 15 board session:

• Trustee Chris Fiore announced that the Town of Southampton had closed on the purchase of the Lovelady Powell property and that a volunteer committee would be working about “ideas and fundraising” for the recreational park that will be developed there. Mayor Sander noted that “the first priority” is removing the structures on the property, which the village is required to do under the terms of an intermunicipal agreement with the town. He said funding for the task will come from the village’s park fund balance of about $30,000, with contributions from the public sought to replenish the fund.

• The newly designed village website is “almost ready to go live,” Clerk Treasurer Eileen Tuohy told the board. She also said audio-video equipment will be installed “by January” that will allow future board meetings to be carried via Zoom, allowing people to participate remotely even when in-person meetings are held again in Village Hall. Tuohy noted that the special COVID-19 provisions of the state Open Meetings Law that allow for Zoom sessions expires January 15, so it is not yet certain whether or not the board’s next scheduled meeting on January 18 will be held in Village Hall. State Assemblyman Fred W. Thiele Jr. “is confident” the provisions will be extended to allow meetings over the internet.

• Mayor Sander reported that the Southampton Town’s Community Preservation Fund has contacted the village “about approaching the owner” of 85 Fresh Pond Road to discuss the possibility of its acquisition for preservation.

• The board discussed revising the regulations that allow small boats to be stored on the beach during the summer at Sunset Beach Road, agreeing to keep the quota of permits at a maximum of 25 but limiting their distribution to one, instead of the current two, per household. A Village Code amendment reflecting the change will be introduced at the board’s January meeting.