Ossipee — June 8, 2010 — Some Ossipee Lake homeowners are worried that the state’s high-water-line law has unfairly given ownership of their private waterfront land to the state. In some cases entire lots — including homes — are technically state-owned, leaving property owners demanding tax breaks and fearing they may not be able to sell or build dream homes, residents and town officials said Tuesday.

“Nobody is quite sure what to do. It’s so bizarre,” said David Smith, director of the Ossipee Lake Alliance, an influential lakefront homeowners’ group.

The state’s so-called 410 Rule purportedly establishes the natural mean high water mark of the state’s fifth largest lake at 410 feet above sea level. But Smith and town officials say the state has no data to back it up.

Everything under the 410 feet the state owns. That means it’s subject to certain shoreline protection regulations. For at least 12 property owners, that means the state owns everything they thought was theirs, a lakefront recently released survey said.

The Ossipee Lake Alliance surveyed 1,600 property owners. Out of the 288 who responded, 35 said the state owns 25 percent of their land, while 12 said the state owns it all plus the house. Thirty-three don’t know who owns their septic system. More than half were “very concerned” about the rule, an alliance report said.

The situation has town and state officials asking tough questions. For example, how was the 410-feet-above-sea-level number set? Nobody seems to know.

“The state doesn’t know how it got the number,” said selectman and historian Harry Merrow.

A New Hampshire Department of Environmental Services spokesman could not immediately be reached Tuesday.

Merrow, a former state lawmaker who is running again for his old seat, will take state environmental officials on a boat tour on June 22 in hopes of reaching a compromise. A public hearing will likely follow later in the summer, he said. He’s joined in the effort by state Rep. Mark McConkey, who has also been gathering data.

In the meantime, people have come to town hall looking for tax relief. Merrow said Ossipee selectmen have been denying requests only because granting them would lend credibility to the 410 Rule.

“They’re saying we’re not going to pay taxes on land we don’t own, and we don’t blame them,” he said.

He said if no answer is found, a slew of court suits could follow.

“The potential is there for something very serious. Right now it’s unclear,” Merrow said. “There’s going to be one hell of a mess if they stick to it.”

It may never be possible to determine the true natural waterline, Merrow said, because the lake is dammed to control its volume. The fear is that some building lots in Freedom may have been rendered unbuildable by the 410 Rule because they are fully below the line, he added.

Smith said speculation is spreading that people won’t be able to sell homes without a clear title. Moreover, he said many title insurance policies contain exceptions regarding state shore-front regulations.

At a December meeting with Department of Environmental Services and the state attorney general’s office, Smith said the state officials could not produce any evidence, including a paper trail, or topographic data, showing how the benchmark was set. The officials said they’d consider moving the line if locals can prove it’s wrong.

“Nobody knows who did it, what information they used or how they ended up with that number,” Smith said.

Still, he said he’s frustrated that it’s been left to the town to prove the state wrong.

“Why is the state not doing this?” he said.