A Vermont bill to void anti-business covenants got no meeting
A Vermont bill to void anti-business covenants got no meeting
2026-09-19 · Vermont · Legislation · Did not pass
Vermont has a statute that voids certain private covenants in the name of housing. A 2025 bill would have extended the same idea to commerce. It never got a committee meeting.
H.306, An act relating to prohibiting deed restrictions or covenants that prohibit use of property for commercial or industrial purposes, was introduced on February 21, 2025 by Rep. Edye Graning of Jericho with eight co-sponsors and referred to the House Committee on Judiciary. The committee's record for the biennium shows no meeting on the bill. It died at sine die on May 29, 2026.1
What it would have added
A new subsection (c) to 27 V.S.A. § 545: “Deed restrictions or covenants added after July 1, 2025 on property zoned for commercial or industrial uses shall not be valid if they prohibit or have the effect of prohibiting use of the property for commercial or industrial purposes.”
Note the drafting choice. Like the two subsections already in § 545, it is keyed to when the covenant was added, not to when someone tries to enforce it.
What § 545 already voids
Vermont's covenant-voiding statute has two operative subsections, both prospective.
§ 545(a): “Deed restrictions, covenants, or similar binding agreements added after March 1, 2021 that prohibit or have the effect of prohibiting land development allowed under 24 V.S.A. § 4412(1)(E) and (2)(A) shall not be valid.” The cross-reference at § 4412(1)(E) is the accessory-dwelling-unit provision: no municipal bylaw may exclude as a permitted use “one accessory dwelling unit that is located within or appurtenant to a single-family dwelling on an owner-occupied lot.”
§ 545(b): covenants added after July 1, 2023 are invalid to the extent they require a minimum dwelling-unit size, or more than one parking space per unit where the property is served by municipal sewer and water in an area allowing residential uses, or more than 1.5 spaces for duplexes and multi-unit dwellings in areas not so served and more than a quarter mile from public parking.
Subsection (c) preserves conservation easements, historic preservation interests and housing subsidy covenants held by qualified organisations, State agencies or the Vermont Housing Finance Agency.
The date is the whole story
This is the point Vermont coverage most often gets wrong. Section 545 is date-of-addition based. A covenant recorded in 1998 that bans accessory dwelling units, sets a minimum house size, or requires two parking spaces remains fully valid and enforceable in Vermont. The housing acts bind municipalities immediately; they reach private covenants only prospectively.
Virtually every Vermont condominium declaration and homeowner-association covenant predates March 1, 2021. For those communities, § 545 changes nothing at all.
A related error is worth naming. Act 181 of 2024 did not amend § 545. The section's history note ends at 2023, No. 47 — the HOME Act. Act 181 amended 24 V.S.A. § 4412, which § 545(a) cross-references, so its effect on covenants is indirect and runs only through the ADU and small-lot provisions.
The third covenant statute, which is different
27 V.S.A. § 546 is the one Vermont provision that reaches backwards. Subsection (a) bars recording a race- or religion-based restriction on or after July 1, 2022. Subsection (b) declares such a covenant “contrary to the public policy of the State of Vermont and … void and unenforceable” and adds: “This subsection shall apply to a restrictive covenant executed at any time.”
Three statutes, three different reaches. Section 544 on renewable energy has no date limit. Section 545 on housing runs only forward from 2021 and 2023. Section 546 on race and religion runs all the way back. H.306 would have been the fourth, and would have run forward from 2025.
What to watch next
Item (2) of the study ordered by Act 179 of 2026 asks Legislative Counsel to examine requiring common interest communities to “authorize commercial purposes within a dwelling unit” — commerce inside a home, rather than H.306's commerce on commercially zoned land. The report is due November 15, 2026.
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