2023 Connecticut Legislative Updates Impacting Real Estate

Murtha Cullina

The 2023 Regular Session of the Connecticut General Assembly, which concluded on June 7, 2023, saw the passage of several acts that will be of interest to real estate owners and investors. The following is a brief description of those likely to have the greatest impact. Each of these laws will become effective on October 1, 2023.

Public Act No. 23-45

This Act amends Connecticut law to require mortgage lenders being paid off to cause a duly executed release of the mortgage to be recorded directly with the applicable town clerk’s office. While the prior law required lenders to deliver a release, it did not specify where the release should be delivered. As a result, in many instances lenders would not send the release to the town clerk but would instead send the release to the borrower or the borrower’s attorney and the release would not be recorded. The failure to record would result in a cloud on title when the property was subsequently sold and/or refinanced. This Act also amends Connecticut law to require mortgage lenders to accept payoffs with a bank check, certified check, IOLTA account check, title insurance company check, wire transfer or any other payments authorized under federal law. Under current law, some lenders restrict the methods in which they accept payoffs to exclude wire transfers thereby causing delays in closings while parties waited for funds to clear. Both of the changes made by this Act are expected to facilitate and expedite real estate closings in Connecticut.  

Public Act No. 23-164

This Act revises Connecticut General Statute Section 29-453 which requires sellers of certain residential real properties to either (i) provide to the buyer an affidavit certifying to the presence of smoke and carbon monoxide detectors; or (ii) credit the transferee/buyer the amount of $250 at closing. The new law eliminates the option of giving the $250 closing credit which is significant because the majority of sellers opted to give the $250 credit in an effort to limit potential exposure under the prior law. The new law also extends the affidavit requirement to transfers of units in residential common interest communities, modifies the content required in the affidavit and also expands the exemptions to include transfers of property acquired by foreclosure. Finally, the new law requires the State Fire Marshal’s Office, in consultation with an association representing realtors, a bar association or an association representing the interests of fire marshals, to develop a model form that may be used for the affidavit and develop a guide outlining smoke detection and warning equipment requirements to assist sellers with completion of the affidavit.  

Public Act No. 23-142

The intent of this Act is to increase the availability of child care in Connecticut by limiting zoning rules that make it more difficult to operate residential child care facilities. Under the new law zoning regulations may not treat a group child care home located in a residence and licensed by the Office of Early Childhood in a manner different from other single or multifamily dwellings. The Act further specifies that zoning regulations adopted pursuant to this Act may not require any special zoning permit or special zoning exception for the operation of a group child care home located in a residence. In addition, on or before December 1, 2023, and annually thereafter, each municipality must submit to the Office of Policy and Management a sworn statement from the chief executive officer of the municipality stating that the municipality’s zoning ordinances are in compliance with the requirements of the new law. If the zoning ordinances are not in compliance, then the affidavit must identify a specific time frame within which the municipality will bring the zoning ordinance into compliance.  

Public Act No. 23-125

This Act will give residents of mobile manufactured home parks an opportunity to purchase the park when the owner decides to sell.  Under this new law an owner of a mobile manufactured home park who intends to sell the park must notify the owners of the dwelling units of the intention to sell and the terms upon which such sale is to occur. The owners will then have an opportunity to purchase the park in accordance with the new law. If an association representing more than 50% of the units in the park that are occupied by the owners of such dwelling units notify the park owner that the association is interested in purchasing the park, the association will have 180 days to close on the purchase of the park. It should be noted that the association can be formed after the issuance of the initial notice from the seller. If the association and the park owner cannot otherwise agree upon a purchase price for the park, the association will have the right to purchase the park for the same price, terms and conditions of any existing bona fide offer to purchase made by another potential purchaser. The park owner may not refuse to enter into a purchase agreement with an association that has made a bona fide offer to match the same price, terms and conditions of an offer for which notice is required to be given under this law. If the association and the seller cannot come to an agreement within 90 days, the association’s right to purchase the park as provided under this Act will lapse.  There are numerous transactions that are exempt from this law including transfers to immediate family or among members/partners of an LLC or partnership, conveyance of an interest in the park incidental to financing and/or if the mobile home park is comprised of fewer than 15 lots. Finally, if the park is transferred to the resident association, the conveyance is exempt from state and municipal conveyance taxes.  

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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