Complex title saga still plagues lot in east Aspen

More than three years after purchasing a lot in Aspen’s east end, Nina Zale decided to vent her frustrations over not being able to build on it with a banner reading, “Please let us build our home!”

The banner is prominently mounted on the lot’s original retaining wall, made of railroad ties and stone, on the back of Nina and her husband Milton’s 6,000-square-foot-lot on the south end of Park Avenue.

A protracted lawsuit against the Zales, by neighbors on Midland Avenue, a series of legal settlements by previous owners, and a mystery surrounding missing information in the Zales’ title when they bought the lot, have kept them from building the home they plan to retire in.

The Midland neighbors, Colleen Grosz and Tim and Marjorie Rodell, say they’re just trying to enforce restrictions placed on the Promontory Subdivision, which was developed by Fritz Benedict in the 1950s. And they say that the Zales’ planned home would violate multiple restrictions designed to protect neighbors’ views and privacy.

But after three years of communicating through their lawyers and frustrated by mounting legal bills, the neighbors have begun talks in an attempt to come to some kind of settlement. The real impediment, however, say the Zales, is their title company, Stewart Title, which is dragging things out and insisting on going to trial.

So after three years, three different versions of the lawsuit, two aborted trials and well over 100 legal items filed by the various parties, a resolution on the issue still seems distant, as a new trial date has yet to be set.

“We’re stuck with an expensive pile of dirt,” said Nina Zale. “We’re renting right down the block so every day I get to see my lot. And it’s costing us a fortune.”

The Zales’ side

It all started very innocently, at least according to the Zales, in November 2005, when they bought a lot at 190 Park Ave. for $1.7 million.

The Promontory Subdivision had been developed by revered local architect Fritz Benedict in the 1950s, and since the lots were rather small, homesites were designed to be built on in such a way to try to ensure views and privacy for their owners. Most lots, for example, have a 20-foot height limit, while the city of Aspen’s height limit is 25 feet.

Some lots have further restrictions, and the Zales’ lot, over the years, accumulated its fair share of them. Nothing can be built within 15 feet of its eastern boundary, for example, and the dogwood hedge between the Zales, Rodells and Grosz properties cannot go higher than 4 feet.

But there’s one further restriction that lies at the heart of the issue: Only a one-story home can be built on the lot. A prior owner of the Zale lot, who also owned an adjacent lot, added the stipulation in 1973 to ensure his view would be protected when he sold off the neighboring property.

The problem is, according to the Zales, they never knew about that restriction and it wasn’t on any documents when they took title.

The one-story restriction, in fact, wasn’t even mentioned in the first lawsuit filing in November 2006. It was reportedly found by one of the plaintiff’s attorneys and added in the second amended complaint filed in February 2007. A third amended complaint, filed in January 2008, added all the neighbors in the Promontory subdivision as defendants.

“We wouldn’t have bought that lot if we knew there was a one-story restriction,” said Nina Zale.

A one-story house on that lot, she said, would limit them to a 2,000-square-foot house, which would be inadequate for the couple and their visiting five children and grandchildren.

Judith Bregman, an attorney with Stewart Title in Denver, said she could not comment on pending litigation and would not confirm any details on the company’s involvement in the suit.

The neighbors’ view

Even though they’re negotiating now, the Zales’ would-be neighbors contend the new lot owners should have done a little more homework before buying the lot.

“When this all started we sent notices to the Zales, the city and the Realtors to let them know about the restrictions on the property,” said Marjorie Rodell, who lives at 201 Midland. “And when I looked at the plans I was horrified.”

The Zales’ home would rise 14 feet above the dogwood hedge, said Colleen Grosz, almost completely obscuring her now unimpeded view of Aspen Mountain and intruding on her privacy with windows looking into her townhome at 211 Midland.

The Grosz and Rodell homes, though mere feet apart, were built at such an angle to each other that neither can look into each other’s windows, and both have a view toward the mountain. The Zale lot sits lower in elevation, which is why a single-story home could be hidden from the neighbors’ view, depending on roof height and massing.

“It’s a cute little subdivision,” said Grosz. “We’re really tight, we’re cramped but everybody feels like they have their own space.”

Grosz said she warned Milton Zale of the restrictions on his lot, but the Zales acquired the property, then obtained a building permit, knocking down the existing home there and beginning excavation.

“The point is they knew what they were getting into and they did it anyway,” Marjorie Rodell said. “They want to build a house twice the size of ours on a lot half the size.”

Beyond the impact on their homes, the restrictions would go away if not enforced by the neighbors, since the rules were set by the neighborhood rather than the city, which is powerless in this case.

“If we don’t enforce it, we give it up,” said Grosz. “This is not how I choose to spend my time or money.”

A tit for tat on the title

The Zales, who took about a year off from dealing with the lot issue when Nina was diagnosed with and fighting breast cancer, ultimately redesigned their home last fall. Their architect redesigned the roof and lowered it to the 20-foot limit, Nina said. A 4,500-square-foot, three-story home (including a basement and garage), could be built on the site, according to their architect, Rally Dupps. But in the redesign, they’ve lost all the money they spent on designs and permits for the first, larger home.

And they won’t budge on the one-story restriction.

“You can’t, it’s virtually impossible to build a one-story house on that lot that makes economic sense,” said Milton Zale.

The Zales argue that they bought title insurance to protect against just such an occurrence: something that wasn’t disclosed in the sale documents that ended up clouding their title. Again, Stewart Title declined comment.

“We have title insurance but can’t collect; it’s like having life insurance, and somebody dies and they don’t want to pay,” said Milton.

An appraisal the Zales commissioned determined that the lot is worth $1.4 million with the one-story restriction — $300,000 less than they paid for it in late 2005 — and $2.6 million without the one-story restriction.

In a series of letters between the Zales’ attorney and Stewart Title’s Bregman in the last few months, the Zales asked Stewart Title to pay them $1.5 million to settle the clouded claim. That’s the decreased property value, plus various architect fees, permit fees and contractor payments the Zales made before they found out about the one-story restriction.

Stewart Title responded in January by saying they were commissioning their own appraisal, and defending the claim. In February, the Zales’ attorney reiterated the need to settle the claim, “given the economic climate,” and suggested Stewart was dragging its feet.

According to Milton Zale, who is a real estate attorney, the title company has every right to wait for a trial, where they have a chance of winning, rather than settle.

“They’re not acting in good faith but they are acting within their legal rights,” he said.

In the meantime, the Zales say they can’t sell the lot, given the lawsuit hanging over it. And the lawsuit itself doesn’t appear to be moving toward resolution quickly.

“I think the problem is they bought the lot knowing about the height restriction and settlement agreement,” said Colleen Grosz, the Midland neighbor. “The title company is saying, ‘Your house violates all those other restrictions, so the only restriction we’re responsible for is the one story.’ They saw our lawsuit which was about much more than the one story, and they’re looking at all the other parts.

“I think they’re stuck because it shouldn’t have gone this far,” she added. “We should have settled by now.”

“Everybody’s getting tired of this,” said Milton Zale, whose wife added, “It could go on forever.” lutz@aspendailynews.com source

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