Commentary: Land-use system could use a quieter approach

Daily Journal of Commerce (Portland, OR), Oct 25, 2007 by Michael Connors

Over the last several years, extreme positions have dominated the political discourse about Oregon's land-use system.

Critics of the system sought sweeping changes with Measure 7 in 2000 and Measure 37 in 2004, both of which proved largely ineffective due to legal flaws and a lack of practical considerations. Despite the signal for change sent by the majority of Oregonians that voted for these measures, proponents reacted by attempting to keep the status quo through court challenges or legislative fixes such as Measure 49.

For those of us who strongly back Oregon's land-use system but recognize there are flaws that must be addressed to keep the public's support, it's frustrating when the political discourse is dominated by such an all-or-nothing mentality.

House Bill 2723 is a good example of how we can improve the land- use system and build broader support by focusing on specific problems and finding practical solutions.

The new law, which goes into effect Jan. 1, is a response to a growing problem with illegal lots: Unsuspecting buyers are acquiring property that by all appearances is a legal parcel but finding out after the sale that the property was never properly approved under land division requirements.

Most Oregon cities and counties strictly enforce these land division regulations; they cite the property for violation and/or outlaw development until the property is brought into compliance.

But sometimes it's not possible to correct the problem because the buyer doesn't control the remainder property or can't satisfy the current regulations.

HB 2723 attempts to address the problem in three ways. First, it allows cities and counties to create a process that retroactively legalizes illegally divided lots or parcels that were purchased without knowledge of the illegal status. A city or county may approve an application to validate an illegally created lot under the standards in effect at the time the parcel was unlawfully divided.

Additionally, a city or county may approve an application to validate an illegally created lot if the city or county previously approved a building permit for a house on the property. This retroactive process provides an unsuspecting buyer some recourse for correcting the problem and ensures the property can be developed and used as the buyer originally intended.

Second, HB 2723 attempts to prevent the creation of illegal lots in the future by requiring additional disclosures by the seller. The seller must include in the deed a reference to the recorded plat, final land-use decision or final judgment that shows the lawful creation of the property.

HB 2723 also adds a property disclosure statement that requires the seller to disclose when the property was legally established. This disclosure requirement makes it more difficult for a seller to pass off an illegally created lot to an unsuspecting buyer.

Third, HB 2723 improves the buyer's remedy for bringing a claim against the seller of an illegal lot. Although a buyer already has the right to do so under Oregon law, the new law makes an award of attorney fees mandatory. The fees will enable buyers who can't afford legal fees to pursue a claim against the seller, and they provide all buyers with additional leverage.

HB 2723 is a good example of how we should approach all of the issues and problems associated with Oregon's land-use system. It's a practical solution to a specific problem that frustrates both property owners and the governments that have to strictly enforce the land division regulations, and it's the by-product of a collaborative effort by legislators and interest groups on both sides of the political landscape.

If we only stopped limiting ourselves to the more extreme positions, we might be able to actually improve the land-use system in a way that benefits all Oregonians.

Michael Connors is a partner at Davis Wright Tremaine, where he specializes in real estate and land-use law. Contact him at michaelconnors@dwt.com or 503-241-2300.