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Commission weighs legal steps and lis pendens after financing pulled for stalled subdivision
Summary
Town staff told the Old Lyme wetlands commission that bank funding for a subdivision project was withdrawn, tax liens were placed and the commission is preparing low-cost legal filings (including a lis pendens) to protect the town while potential purchasers or foreclosure proceed.
Town staff updated the Old Lyme Inland Wetlands and Watercourses Commission on May 26 about a stalled subdivision (case referenced as 38-1) that the commission has been monitoring. Staff said the financier pulled funding shortly after the town provided a detailed status update, and the tax collector has placed liens on the lots. Commissioners discussed options including filing a minimal lawsuit to record a lis pendens so future buyers are on notice of outstanding wetland and subdivision obligations.
Staff reported that the site shows ongoing erosion-control problems and exposed slopes from prior disturbance; some hay-bale and silt-fence measures are no longer functioning. The town lawyer and staff noted the subdivision approval is approaching its renewal date next year, and that absent further action the town risks losing administrative leverage if the record does not show pending legal claims.
Commissioners asked about the practicality of litigation and whether the town should pay for stabilization. Staff said the owner currently lacks funds, the bank is not extending more money, and litigation likely would recover only modest sums (staff estimated roughly $50,000–$60,000 in recoverable engineering/violation costs but said the figure is approximate). Given those limits, commissioners favored a low-cost filing to register a lis pendens and to add counts in court filings that preserve the town's claims on wetland and subdivision violations. Staff will coordinate with the town’s counsel to file appropriate notices and to consider minimal-cost litigation steps; commissioners will request that staff explore whether a bond or enforcement lien remains available for stabilization work.
The commission emphasized that any decision to proceed to more costly litigation should weigh the town’s likely recovery and the need to stabilize the site if erosion threatens wetlands. No formal vote on litigation strategy was recorded; the commission directed staff to pursue administrative filings and to return with recommendations and cost estimates.
