## Facts

- A landowner entity leased lakefront land in Colchester, Vermont, beneath and around approximately twenty-five seasonal camps to a homeowners association under a long-term ground lease.
- The parties extended the lease term in 2002 so it would expire in 2036; the landowner later became the sole lessor.
- The lease required the association to maintain the premises and prevent waste, and included a clause providing for termination if the association failed to comply with any lease term.
- Severe shoreline erosion developed over time; a seawall and coordinated shore-protection measures were needed to prevent further damage.
- The association did not implement coordinated common-area shoreline repairs and instead relied on individual camp owners to address erosion in front of their camps, resulting in piecemeal and inadequate protection.
- The trial court found the association’s lack of maintenance and inadequate response to erosion caused substantial injury to the property and constituted waste and default under the lease.

## Issues

1. Whether the association’s failure to take reasonable, coordinated measures to maintain the shoreline and prevent erosion constituted waste and a lease default, or merely ordinary wear and tear.
2. Whether, after finding default under a lease forfeiture clause, a court may deny termination as inequitable and instead award damages while leaving the lease in place.

## Decision

- The Vermont Supreme Court affirmed the finding that the association breached the lease and committed waste; the harm was not merely ordinary wear and tear.
- The Court reversed the remedial ruling that denied forfeiture, holding the lessor was entitled to termination under the lease’s forfeiture clause given the substantial breach.
- The Court remanded for entry of a remedy consistent with lease termination and a possessory remedy, subject to appropriate equitable considerations concerning implementation.

## Legal Principles

- A lessee’s failure to perform core maintenance obligations that results in substantial physical deterioration can constitute waste and a material lease default, even where natural forces contribute to the damage.
- Trial-court findings distinguishing waste from ordinary wear and tear are reviewed with deference and will be upheld unless clearly erroneous.
- Courts may grant equitable relief from forfeiture only in limited circumstances (commonly where the breach is minor, technical, or inadvertent and damages are adequate).
- When a forfeiture clause is triggered by a substantial breach implicating the lease’s central protective obligations, equity does not justify substituting damages for termination merely to avoid hardship to third parties associated with the lessee.

## Conclusion

The court held that the homeowners association’s failure to coordinate shoreline maintenance constituted waste and default under the ground lease, and that equitable concerns did not permit the trial court to deny the contractually provided forfeiture remedy; the lessor was entitled to termination and re-entry on remand.


Mongeon Bay Props., Inc. v. Mallets Bay Homeowners Ass'n, Inc., 149 A.3d 940 (Vt. 2016)