Measure 49 reopened the method to review vested rights under 34 year-old case law in Clackamas County v. Holmes, 265 Or. 193 (1978). But, the analysis is vexing because very few local governments and courts are getting the analysis right. However, with each new decision, the Court of Appeals and Oregon Supreme Court are attempting to clarify how local governments and trial courts should consider the application of the Holmes factors necessary to make a vested rights determination.
The Holmes factors are:
1) The ratio of prior expenditures to the total cost of development;
2) The good faith of the landowner in making the prior expenditures;
3) Whether the expenditures have any relationship to the complete project or could apply to various other uses of the land; and
4) The nature of the project, its location and ultimate cost.
From time to time governments need to take property for a public purpose. Both the federal and state constitutions allow this, provided the government pays “just compensation.” If the government can’t reach an agreement with the property owner, it can take the property under its eminent domain authority – condemnation – by filing a lawsuit naming the property owner (and any other party having an interest in the property to be taken). The issue in a condemnation lawsuit is: what is the amount of just compensation owed?
In Zimmerman v. Wabaunsee County, Kansas, 293 Kan 332, 264 P3d 989 (Kan. 2011), the Kansas Supreme Court considered Plaintiff landowners appeal of the county’s decision to adopt zoning regulations that expressly prohibited the placement of commercial wind farms. Each of the Plaintiffs had entered into written contracts for the development of commercial wind farms on their properties. Plaintiffs raised two federal constitutional challenges to that ordinance, using the Takings and Commerce Clauses.
On review, the Kansas Supreme Court found that in order to prevail on a takings claim, a party seeking compensation must first establish that the property in question is one in which a vested interest exists. A mere expectancy of future benefit does not constitute a vested right.
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