The first lease holder to the Ft. Howard VAMC property, who had promised to build a veterans community there, consistently claimed that the federal property is exempt from county and state codes, taxes and laws. He claimed that the development was undoable due to Baltimore County, Maryland and the Department of Veterans Affairs insisting he adhere to legal requirements, and that the lease exempted him from those requirements. After he did not perform any work on the project, the VA canceled the lease. Then he sued the United States - YOU - for the lease being cancelled. In that law suit, it is proven that the lease holder does have to adhere to local and state building requirements. This is from that law suit court report:
"Plaintiff (John Infantino) recognizes that the Lease states that FHSHA (Ft. Howard Senior Housing Associates) would comply with "applicable local and State laws, codes and ordinances," but argues that the Federal government's exemption from such laws means that none of the state or local requirements or taxes are "applicable."
"Plaintiff (John Infantino) recognizes that the Lease states that FHSHA (Ft. Howard Senior Housing Associates) would comply with "applicable local and State laws, codes and ordinances," but argues that the Federal government's exemption from such laws means that none of the state or local requirements or taxes are "applicable."
The government argues that it did not breach its duty to cooperate or violate any implied warranties because the VA, in the terms of the Lease, exercised its statutory authority to require such compliance. The government argues that the version of 38 U.S.C. § 8166(a)8 in effect at the time the parties entered into the Lease gave the VA the "discretion" to require a lessee that enters into an EUL to comply with state or local requirements relating to land use, building codes, permits or inspections and thus the VA was entitled to require compliance with state and local laws and regulations. Specifically, the government relies on the second sentence of § 8166(a), contending that it expressly states that any construction, alteration, repair, remodeling, or improvement" is not subject to state or local "land use, building codes, permits, or inspections unless the Secretary provides otherwise." 38 U.S.C. § 8166(a) (emphasis added). The government argues that the Lease by its terms demonstrates that the Secretary of the VA did not exempt FHSHA from complying with state and local laws, instead stating in Articles 4.A.1, 4.A.2, and 10.H.1 that FHSHA is subject to all applicable laws. According to the government, "applicable" laws include the local Baltimore County zoning requirements.
it is clear that these terms unambiguously state that state and local laws are relevant to the project. Plaintiff's contention that "applicable" should be read to mean "none" is simply inconsistent with the plain language of the lease and must be rejected. Accordingly, the VA's later insistence that FHSHA comply with state and local laws was not a breach of the lease, but rather entirely consistent with it.
The Lease expressly required that FHSHA
pay and discharge, . . . prior to delinquency, all taxes, general and special assessments, and other charges of every description that during the term of this Lease may be levied or assessed against the Property and all interests therein and all improvements and other property thereon, whether belonging to [the VA] or the Lessee.
Def.'s App'x 44, Article 17.B. Accordingly, if a state or local government imposed taxes on FHSHA's interest in the property, FHSHA was obligated to pay such taxes and the VA did not have the power under § 8167 to exempt FHSHA from paying state or local taxes."
Court report copied from:
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