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Bankers and committee back cautious study of common‑interest community rules amid mortgage and insurance concerns
Summary
Lenders and committee members supported a study of common‑interest community (CIC) rules in S.328, warning that broader language could void deed restrictions, raise insurance premiums and make mortgages harder to sell on the secondary market; the committee favored a measured, evidence‑based approach.
Chris Dia, president of the Vermont Bankers Association, told the committee he supports the common‑interest community study in S.328 but cautioned that earlier, broader versions of the bill could have unintended market consequences.
Dia and other testifiers said language that would void deed‑based covenant restrictions or remove limits on rentals could interfere with mortgage buyers on the secondary market, which relies on a clear designation of primary residence. Lenders warned that loans for units in communities with ambiguous or conflicting bylaws could become harder to sell and that insurance premiums could increase in some areas if rental mixes change.
Committee member Emily raised concerns that allowing unlimited rentals in some communities could push up insurance costs for residents on fixed incomes; she and Dia urged the committee to proceed with a careful study before adopting changes that affect bylaws, covenants or deed restrictions.
Members signaled support for the compromise to study the state of common‑interest community governance rather than adopting sweeping statutory overrides, and lenders offered to volunteer expertise as the study develops.
