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Newly built housing area in BavariaLitigation over easement rights is a common occurrence in Oregon. In their most typical form, these lawsuits are filed as declaratory judgment actions under Oregon’s Uniform Declaratory Judgment Act, ORS 28.010 et seq. As easement rights can span a number of properties and touch upon the property interests of many parties, the attorney filing the lawsuit is faced with the question of who must be named as defendants. The title holders to the affected properties are obviously necessary parties, but what about holders of lesser property rights, such as easements?

iStock Country RoadThe law recognizes that under certain circumstances, continued unauthorized crossing of another’s land for a long time can lead to the right to do so indefinitely, notwithstanding that there is no agreement from the landowner.  The right so gained is called a prescriptive easement.  When the law allows one landowner to lose property rights in favor of another, without compensation, disputes often occur.  No surprise.  If it were my land, I’d be upset, too.

The Oregon Court of Appeals, in Wels v. Hippe, 269 Or App 785, 787 (2015), recently dealt with such a dispute, and provided the litigants and practitioners of the law with an in-depth analysis of one element of a prescriptive easement case – “adversity”.

In order to obtain a prescriptive easement to cross over or use the property of another under Oregon (as well as Washington) law, a plaintiff claiming a prescriptive easement is required to show, “by clear and convincing evidence, that his use (or use by former owners of his property) of the road on defendants’ property was ‘open and notorious,’ ‘adverse to the rights of defendants,’ and ‘continuous and uninterrupted’ for 10 years.”  Id, at 787.

House on euros in forestK.L.W. Construction Co., Inc. v. Town of Pelham, 2014 WL 6967664 (N.H.) involved petitions for declaratory judgment by a construction company and a developer for a refund of what in Oregon are termed “systems development charges” authorized by a New Hampshire statute. Under the statutory scheme, local governments may assess fees for capital improvements; however, if the fees are not spent within six years, they must be refunded. Defendant’s ordinance authorized a refund, but only to the “current owner” of the land assessed. Plaintiff Construction Company paid the fee, which refund was also sought by the original developer. The land in question was sold to homeowners after development and the Town contended that only these successors could claim the refund.

The assessments were levied to build a new Town fire station; however, after some of the funds had been spent for feasibility studies and architectural plans, the voters of the Town declined to authorize construction. The trial court upheld the Town’s restriction of refunds to current owners and granted its motion to dismiss Plaintiffs’ claims, determining that the statutory direction for a refund of unused fees did not require that such refund be paid to the original payee.

On appeal, the court found no factual disputer and reviewed the trial court’s order of dismissal on a de novo basis, as Plaintiffs’ standing was jurisdictional and a question of law over statutory interpretation of “refund,” a term not otherwise defined by the enabling legislation. Plaintiffs contended that local governments must follow the statutory mandate and that “refund” must be given its ordinary meaning of “pay back” or “reimburse.” Plaintiffs also contended that another statute relating to exactions was more specific, providing refunds in those cases to the payer or the payer’s successor in interest. However, the SDC statute did not contain such language and the court declined to insert the same, finding the two statutes enacted at different times and dealing with different situations.

Moreover, the court cited decisions from other courts that allowed refunds to go to other than the original payers and rejected the possibility that local governments could enter into an agreement a payer to have payments specifically refunded to that payer as requiring this arrangement to be made. Moreover, the court declined to use legislative history to interpret the refund statute, finding no necessary ambiguity that would allow for such an examination. Finally, the court rejected Plaintiffs’ takings challenges, finding no adequate preservation of constitutional issues.  The court thus affirmed the trial court’s conclusion that the local ordinance authorizing SDC refunds to current landowners to be within the statutory authorization.

This is a case of statutory interpretation. Although Oregon law does not speak to the refund issue, common practice is that unspent systems development charges must be refunded. Refunding those charges to current landowners provides for better predictability in the use of those funds and for allocation of the risk of that possibility as part of the sales price for land.

K.L.W. Construction Co., Inc. v. Town of Pelham, 2014 WL 6967664 (N.H.)

ColumnsAs the Oregon Legislative session moves into full-swing giving spectators a front row seat to frantic lobbying and frenetic lawmaking, the Oregon Court of Appeals issued a decision that should remind those involved in this pastime affectionately known as “sausage-making,” to consider the importance of the deliberations.  The decision relates to efforts to remove the oldest home in Lake Oswego, the historic Carman House, from the City of Lake Oswego’s inventory of historic resources and potentially allow for its demolition, as described in my previous blog post.  In 1995, the Oregon Legislature passed the statute at issue, ORS 197.772, which precludes a local government from imposing a historic designation on a property over “a property owner’s” objection.  Subsection (3) of that same statute further provides that “a property owner” may subsequently seek to remove a historic designation that was imposed.  The issue before LUBA and the Court in the case, Lake Oswego Preservation Society v. City of Lake Oswego, was whether a request to remove a designation after it has been imposed must be made by the same property owner who originally objected or whether a subsequent owner may also seek removal.

The general rule when interpreting a statute is to focus on the text and context of the provision.  However, courts will also look to the legislative history to determine intent.  In the Lake Oswego case, the Court found, as had LUBA, that the text and context for determining who was included as “a property owner” under ORS 197.772 was not particularly helpful and it turned to the legislative history.  This history came largely from two hearings before the House Committee on General Government and Regulatory Reform.  LUBA keyed into a statement by one of the bill’s authors, when asked whether a subsequent purchaser could seek to remove historic designation, responded that “[w]e haven't thought about that situation.”  LUBA also noted that a proposed amendment making clear that in cases where the property owner does not object, subsequent owners are bound to the designation, and was rejected and not included in the engrossed bill.  Based on those comments, LUBA concluded that the drafters intended to afford relief only to those property owners on whose property the designation had been imposed.

The Court of Appeals analysis of the legislative history makes no mention of those portions of the legislative history that LUBA found important.  Instead, the court highlighted that the legislation was to allow owners that were “coerced into the historic property designation” to seek removal of that designation.  The court quoted from another representative summarizing the scope of subsection (3) to include those cases where “property owners were not allowed to consent and government imposed it on them that now they would have an opportunity to remove their property from that designation.”  From this, the court concluded that the amendment allows “individuals who own property on which historic designations had been involuntarily imposed by the local government – before the enactment of ORS 197.772 – to have that designation removed.”  The court explained that the focus during these committee meetings was on providing relief in cases where a designation was imposed over an owner’s objection and not on whether subsequent purchasers could also take advantage of the previous owner’s objection.  Further, the court found that preservation advocates’ concerns that adoption of subsection (3) would have the effect of “dismantling historic districts” and a lack of response by the proponents indicated an intent to have broad effects.  As a result, the court concluded that any property owner that has a local historic designation forced on their property may remove that designation.

What is so interesting about this case is that two review bodies looked at the same legislative history and reached diametrically opposing conclusions.  Maybe the difficulty is that the Court of Appeals failed to mention, much less explain, why the comments that LUBA found instructive were not helpful.  How could the court find that committee discussions focused solely on giving relief to those owners who were “coerced into a historic preservation designation” and from that extend that same protection to property owners who were not coerced but instead knowingly purchased a designated property?  If this ruling rests on the conclusion that the legislature intended the effect of ORS 197.772 to “dismantle” historic preservation efforts, legislators, both proponents and opponents, need to be much more descriptive and particular in describing their intent.

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We regularly update clients about changes in real estate law and on industry trends. This includes briefing clients on legislative proposals in the federal tax, housing and other legal areas affecting their businesses. Staying current enables you to anticipate and prevent legal problems as well as capitalize on new developments.
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