connecticut tackles several real estate matters with new legislation
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Published on September 15, 2025
The Connecticut General Assembly 2025 Regular Session concluded on June 4, 2025, and with it came the passage of several public acts of interest to real estate professionals. Below is a summary of some of those newly enacted laws.
Undischarged Mortgages
Public Act 25-46 addresses what real estate practitioners know (and dread) as the old mortgage that everyone assumed has been paid off, but still remains undischarged on the land records (also colloquially referred to as the “zombie mortgage”). Best-case scenario, these can cause headaches and delays when closing transactions, and worst-case scenario, can lead to wrongful demands for repayment or threats of foreclosure from the lender.
This new legislation imposes a 10-year statute of limitations for commencing foreclosure actions on certain mortgages encumbering one-to-four family dwellings used as the borrower’s principal residence. The 10-year period will run from the date fixed for the last payment or the maturity date set forth in the mortgage or note (such date can be expressly stated or calculated from information contained in the underlying document), or the last date on which any payment on the account was made by, or on behalf of, the borrower. One important limitation on this new legislation is that it only applies to “second” mortgages. Exempt from the statute of limitations are mortgages (1) recorded before January 1, 2026, and first in priority when recorded, or (2) subordinate when recorded, but still held by the original lender or a subsidiary, affiliate or successor.
Finally, this new legislation also amends Connecticut General Statutes §49-13a by reducing the time period for an undischarged mortgage to become invalid as a lien from 20 years to 10 years after the time for full performance.
Municipal Matters
Public Act 25-23 amends Connecticut General Statutes §7-148aa regarding liens for violations of the housing code. Under the existing law, municipalities are authorized to adopt ordinances establishing fines for the violation of certain local ordinances governing safe and sanitary housing conditions. Under this new legislation, the unpaid fines imposed in connection with housing code violations can give rise to a lien that will encumber the affected real estate for which the underlying violation relates. Under prior law, unpaid fines for violations of anti-blight ordinances and zoning violations can give rise to a lien that enjoys priority over all other encumbrances (except taxes), and liens arising from fines under this new law will enjoy the same priority.
Public Act 25-53 permits zoning enforcement officers to take certain enforcement actions, including assessment of fines of up to $150 per day and other civil penalties, against businesses that either suspend work required by an unexpired site plan, certain subdivision plans or inland wetlands approvals, or which make improvements that don’t conform to the foregoing plans or approvals. Under the new law, a zoning enforcement officer can take such enforcement action if determining the business has no intent to resume the work within a reasonable period of time or the incomplete/non-conforming work creates a public health or safety hazard.
Public Act 25-164 authorizes municipalities to permit the conversion of certain commercial buildings into residential developments using a simplified “summary review” process. The summary review process permits a zoning application to be approved without requiring a public hearing, variance, special permit or special exception or any other discretionary zoning action (excluding a determination that a site plan conforms with applicable zoning regulations and that public health and safety will not be substantially impacted). In order for a property to be eligible, the building must have been vacant or had an average occupancy rate under 50% for the prior one- year period before the summary review application. Additionally, the new legislation prohibits municipalities from conducting a revaluation of a converted property in the three years following the date when the certificate of occupancy issued.
Common Interest Ownership Communities
Public Act 25-73 stipulates that if a unit owner in a common interest community makes an improvement to the unit that increases the community’s common expenses, then the unit owner is to be assessed for those expenses. Additionally, it also establishes a process whereby owners of detached condominium units can apply to the association to install solar panels on the unit roofs, and further prohibits the association’s governing documents (i.e. declaration, bylaws) from restricting or prohibiting panels on such units. The process sets forth certain conditions on the installation of such panels, including hiring registered and insured contractors, covering any resulting common expenses and removal of the panels in the event a proposed buyer does not agree to take over the responsibilities. Finally, it also provides for a process for certain associations formed after January 1, 2026, to opt out of the law’s approval processes and protections if the election is made on or before January 1, 2028.
Landlord/Tenant Matters
There were several public acts passed to address various landlord/tenant issues. Public Act 25-121 requires any municipality that creates a fair rent commission to post on the municipality’s website a publicly accessible copy of the commission's adopted bylaws. Public Act 25-146 provides a mechanism whereby tenants can request an accounting from the landlord showing assessed charges, completed payments and any balance and/or surplus that may be due to, or from, the tenant. Moreover, Public Act 25-44 requires that any periodic or recurring fees, charges or costs that a tenant is required to pay be included in any communication or similar advertisement of the rent for said dwelling unit. Additionally, the Department of Housing is required to publish on its website a standardized summary form of rental terms which clearly summarizes the key terms of the rental arrangement (including, but not limited to, the term of the rental, the name of the landlord and the point of contact for property management issues). Landlords violating the provisions in these newly enacted laws can be liable to the tenant for a civil penalty equal to one month’s rent, and in certain circumstances courts can award attorney’s fees and costs.
Residential Real Estate Flood Disclosures
Public Act 25-33 modifies what is required to be included in a residential condition disclosure report in connection with the selling of residential property to include a “Flood Risk Awareness” section. In this new section, the seller is required to confirm and disclosure (i) if the property is located in a FEMA-designated floodplain and, if so, identify the zone, (ii) if during the period of ownership the seller has received assistance or is aware of any previous owners receiving assistance from FEMA or other federal/state disaster assistance programs, (iii) if there is a current flood insurance policy in effect for the property, (iv) if a FEMA elevation certificate is available, (v) if the seller has ever filed a claim for flood damage to the property, (vi) if any structure at the property has ever experienced water penetration or damage due to seepage or natural flood event.