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I HAVE MY MEASURE 49 FORM – WHAT DO I DO NOW?

 

Note:   These materials are for general informational purposes only and are not intended to be relied upon for legal advice.  Nothing in this document is, or is intended to be, legal advice, nor intended to create a lawyer-client relationship. If you have a legal question regarding Oregon Ballot Measure 49 (2007), Oregon Ballot Measure 37 (2004), or any other laws affecting the use of your property, you should consult an attorney licensed in your jurisdiction for legal advice regarding your specific situation and circumstances.  The transmission of the materials and information contained in this document, or the receipt thereof, is not intended to, and shall not, form an attorney-client relationship.

 

In the next two months, every person who filed a Measure 37 claim with the State of Oregon will receive a Measure 49 packet from the State.  If you are a Measure 37 claimant, it is important that you understand the choices that are available to you under Measure 49, so that you make the best choice for you and your family.

 

WHAT DO I DO WHEN I GET THE FORM?

 

Before you begin to study the Measure 49 claim form and the other information in the packet, please take note of the date on the cover letter that accompanies the form.  This date is vital, because it starts the 90 day time period that you have to complete and return the form.  The date on the cover letter is the date the 90 day time period starts, not the date you actually receive the packet.  Please pay attention to the date.

 

For example, if the State places your Measure 49 packet in the mail on February 14, and you receive your packet on February 18, you will only have 86 days to complete and return the form, as the 90 days began to run on February 14.

 

In addition, it is critical to note that your Measure 49 packet must be in the state’s possession on or before the end of the 90 day period.  In other words, you cannot wait until the 90th day, put your claim packet in the mail, and rely on the postmark date as the time you filed your claim.  Your claim must actually be received by the state on or before the 90th day from the date the state mails the packet to you.

 

The safest way to ensure that the state receives your Measure 49 claim within 90 days is to hand deliver the form to the address found in your Measure 49 packet.  If you choose to mail your claim form, then consider making two original claim forms, and sending one form by first class mail and the other by certified mail to ensure that you have evidence that the state has received your form within the appropriate time. 

 

Try to allow adequate time for the mail to deliver your form.  It would be a shame to lose your claim due to the mail being slow.

 

There do not appear to be any exceptions to the time requirements in Measure 49.  If you don’t turn your claim form in time, you will lose your rights to take advantage of the relief offered by Measure 49.  If you do not have your Measure 49 packet by February 28, you should contact the Oregon Department of Land Conservation and Development at (503) 373-0050.

 

WHAT ARE MY OPTIONS UNDER MEASURE 49?

 

There are three basic choices that are available to most Measure 37 claimants under Measure 49.  These choices can be found in Section 5 of Measure 49.  The three options are 1) the “express” lane (Section 6 of Measure 49), 2) the 4-10 home option (Section 7 of Measure 49), or 3) establishing a “vested right” under common law.

 

A.                 The “Express Lane” (Section 6)

 

For Measure 37 claimants with property outside the urban growth boundary, the “express lane” option found in Section 6 of Measure 49 will likely be an attractive choice. 

 

Under the express lane provisions, rural Measure 37 claimants who could have built 1-3 homes on their property when they acquired the property will likely receive approval from the state to create up to three new parcels, with the right to place a single family dwelling on each parcel. 

 

The express lane option is limited, however.  Measure 37 claims on property inside urban growth boundaries will not be able to take advantage of the express lane provisions, for reasons known only to the legislature.

 

In addition, claimants choosing the express lane will qualify for a maximum of three new parcels and homesites, even if they asked for many more than that.

 

The number of parcels/homesites that a Measure 37 claimant will receive under the express lane is dependent upon how many parcels/homesites they requested in their Measure 37 claim, and also the number of existing homes on the tract on which the Measure 37 claim was filed. 

 

For example, if a Measure 37 claimant only applied for one home under Measure 37, they will only receive approval to build one home under Measure 49, even if they could otherwise qualify for three homes.

 

In addition, the number of parcels/homesites that a Measure 37 claimant will receive under the express lane is reduced by the number of homes that already exist on the tract.  If there is already a home on the tract, then the maximum number of new parcels/homesites allowed under the express lane is two.  If there are two or more homes on the tract, then the maximum number allowed is one new homesite.  However, even if there are already three homes on the tract, every Measure 37 claimant who otherwise qualifies under the express lane will receive approval for at least one new parcel/homesite.

 

If a claimant decides to choose the “express lane” under Measure 49, they will mark a box on the Measure 49 claim that is included in their packet.  As noted above, claimants must submit their claim form to the state within the time allowed, or their express lane claim will be rejected.  Upon receipt of a claim, the state will review the claim to make sure that all of the information they need is provided.

 

After the state reviews a claim, they will mail notice to the claimant informing them of the decision they have made on the claim, along with the number of new parcels/homesites that can be created on the property, if any.  Do not lose this notice, as it may be the only evidence that the claimant has to rely upon.

 

If the claimant is unsatisfied with the state’s decision, they may appeal that decision.  At the same time, if another interested party objects to the state’s decision, they may appeal that decision.  Once the state’s decision becomes final, however, the claimant will have the right to create the number of new parcels/homesites that are specified in the final decision, subject only to any health and safety requirements and siting standards that may be imposed by Measure 49 or the county planning office.

 

In order to create the new parcels/homesites authorized by the state, a claimant will need to submit a partition/subdivision application with the county.  The county may apply siting criteria to the application, but may not apply those criteria in a manner that results in the application being denied.  In addition, any health and safety criteria that apply to the siting of the dwellings will be applied.

 

Finally, any new parcels created under Measure 49 will be limited in size.  For parcels on “high value farmland” or “high value forestland,” which carry very unique definitions under Measure 49, the maximum parcel size allowed by Measure 49 is two acres.  On land that is not “high value farmland” or “high value forestland,” the maximum parcel size is five acres.  The parcels must also be clustered.  Both clustering and parcel size determinations will be made by the county, not the state.

 

B.                 The 4-10 Home “Impossible Dream” (Section 7)

 

For Measure 37 claimants who requested more than three homes and would like to create more than what would be allowed under the “express” lane, there is the option of asking for up to 10 homes under Section 7 of Measure 49.  However, this option is so complicated, expensive, and difficult that few, if any, Measure 37 claimants will be able to meet the standards.  This option should really be called “the impossible dream.”

 

As an initial matter, Measure 37 claimants whose property meets the definition of “high value farmland” or “high value forestland” under Measure 49 are not eligible to seek relief under this section.  Relief for these claimants is limited to the 1-3 homes offered under the “express” lane, or a vested rights claim.  The definitions of “high value farmland” and “high value forestland” in Measure 49 are ridiculously broad, encompassing thousands of acres of land that isn’t good for any natural resource activity at all, so a claim under this section will not be available to most Measure 37 claimants.

 

If a Measure 37 claimant has property that is not “high value farmland” or “high value forestland” as defined in Measure 49, then they can make a claim under this section.  However, in order to qualify for 4-10 homes, the claimant must have two appraisals performed for each land use regulation that they believe has lowered the value of their property since it was originally purchased. 

 

For most Measure 37 claimants, there are multiple regulations that have been enacted in the years since they purchased their property that have lowered the property’s value.  For instance, property owners in exclusive farm use zones typically list Senate Bill 100 (1973), LCDC Goal 3 (1975), their local comprehensive plan and zoning ordinance (usually around 1980), ORS 215.780 (1993), and  LCDC’s $80,000 income rule (1994) as land use regulations that have lowered the value of their property.

 

In order to qualify for up to 10 homes under Measure 49, a property owner listing the above land use regulations would have to have two appraisals done for each of the listed land use regulations.  The appraisals would be calculated based on the real estate market one year before and one year after the date of enactment of each regulation.  This alone requires an appraiser to recreate real estate markets that are in many cases over three decades old.

 

Assuming (and this is no safe assumption) that a claimant can find an appraiser to conduct these appraisals, the cost of doing so will be tremendous, due to the difficulty in trying to conduct an appraisal based on decades old real estate markets.  In addition, the appraiser must subtract the amount of savings, if any, that the Measure 37 claimant received in farm or forest tax deferral, which may be impossible in many counties since many county assessors did not calculate real market values for properties in tax deferral, meaning the appraiser will also have to try and create these figures, if possible.

 

In the end, the likelihood that a claimant will be able to qualify under the 4-10 home provisions of Section 7 is slim, and the cost to qualify is great, making this choice a non-starter for most Measure 37 claimants.

 

C.                 Vested Rights – Have I Vested My Rights and How Do I Know?

 

The third option that Measure 37 claimants have is to claim a vested right.  A vested right occurs when a Measure 37 claimant has proceeded far enough in developing his/her property pursuant to an approved Measure 37 claim that it would be unfair to stop the claimant from finishing the project, even though the project would no longer be allowed due to the passage of Measure 49. 

 

If a Measure 37 claimant is successful in obtaining a vested right to complete their Measure 37 project, they will be allowed to complete the project.  Once completed, the use will be treated as either a permitted use or a non-conforming use, depending on how the Oregon appellate courts construe the transferability rights under Measure 37.  In either event (permitted use or non-conforming use), however, the property (and the authorized uses) could be transferred to third parties.

 

In essence, a vested rights claim is based on fairness – would it be fair to tell a property owner who has done this much work on their Measure 37 claim that their claim is no longer valid?  Of course, this begs the question - how much work must be done before a right becomes vested?

 

Unfortunately, there is nothing in Measure 49 or in the existing state law that sets forth criteria to determine at what point a claimant has done enough work to complete their Measure 37 project that the right to finish the project has vested.  As a result, Measure 37 claimants who believe they have a vested right to complete their development under Measure 37 must rely on guidance from prior decisions of the Oregon Supreme Court and Oregon Court of Appeals.

 

And that’s a big problem.  There are few decisions by the Oregon Supreme Court and Oregon Court of Appeals concerning what constitutes a vested right.  To be sure, there are some cases, but certainly not enough to address the variety of factual situations that Measure 37 claimants find themselves in.

 

We can glean some guidance, however, from the few Oregon appellate court decisions on vested rights.  The lead case on vested rights in Oregon is Clackamas County v. Holmes, 265 Or 193 (1973).  In Holmes, the Oregon Supreme Court listed six factors that a court could consider in determining whether a property owner had a vested right:

 

1.         SEQ CHAPTER \h \r 1Ratio of how much the property owner has spent on the project in relation to the total cost of the project;

2.         Whether the property owner, in developing her property, is acting in good faith;

3.         Whether the property owner had advanced notice of the proposed changes to the zoning and/or uses allowed on her property;

            4.         The nature of the expenditures made by the property owner.  Do the expenditures relate only to the development, or could the expenditures be used for alternative, permitted uses of the land;

5.         The nature of the development, its location and its ultimate cost; and

6.         Do the acts of the property owner rise beyond mere contemplation of developing the property?

 

A court does not have to consider each of these factors in every case, however, and in some cases different factors may be considered.  In essence, the “factors” are non-binding guidelines for judges to consider.  Thus the difficulty for a property owner seeking a vested right is the uncertainty of knowing exactly what they had to have done in order to satisfy an essentially standardless test.

 

Whether a M37 claimant has a vested right is a matter of degree.  Some Measure 37 claimants will likely not have a vested right, as they have done nothing in furtherance of their approved Measure 37 claim.  Other Measure 37 claimants have spent hundreds of thousands of dollars to complete their Measure 37 development, have jumped through all of the county hoops, and have completely transformed their properties in order to complete their projects.  These property owners likely have a vested right.  But because vested rights are so ill-defined in Oregon, no lawyer can advise a client with any degree of certainty.

 

If a Measure 37 claimant believes they have a vested right, then the claimant should immediately seek the guidance of a knowledgeable land use attorney in their area.  In order to obtain approval on a vested rights claim, a Measure 37 claimant will need to get a final decision from either the county or the local circuit court.  Measure 49 appears to grant concurrent jurisdiction to the county and the local circuit court to decide vested rights cases, meaning the claimant can choose to file a lawsuit against the county and state or alternatively, file an application with the county seeking a vested right.

 

Obviously, the uncertainty associated with vested rights, coupled with the cost of obtaining a final decision from either the county or the courts makes this option a risky one.  However, for those who have spent thousands of dollars on their Measure 37 claims and who would be unsatisfied with the relief offered under the “express lane,” a vested rights challenge is an option worth pursuing.

 

IF I THINK I HAVE A VESTED RIGHT, BUT LATER CHANGE MY MIND, CAN I CHOOSE ONE OF THE OTHER OPTIONS UNDER MEASURE 49?

 

Probably not.  As noted above, a Measure 37 claimant will have 90 days from the date the state mails their Measure 49 packet to complete and return their claim form.  If a claimant wants to take the relief offered by Measure 49 (the “express lane” or the 4-10 home “impossible dream”), they must complete the form and return it to the state within the 90 day period.  If the claimant does not return the form within the 90 day time allowed, then they waive the right to claim relief under the “express lane” or the “impossible dream.”  

 

However, once the claimant returns the Measure 49 claim form and asks for either the “express lane” or the “impossible dream,” the claimant automatically waives their rights under Measure 37, including any claim that they have a vested right.

 

This means that if a claimant attempts to get a vested rights decision from the county or trial court and loses, the decision they get will likely not be rendered until after the 90 days in which they have to return their Measure 49 form.  If the court or county decision is made before the 90 day period expires, then an unsuccessful claimant would still have time to choose one of the options under Measure 49.  But getting a decision in that short of time is likely to be difficult.

 

ARE MY RIGHTS TRANSFERABLE?

 

Yes.  Whether you obtain development rights under the “express lane,” the “impossible dream,” or a vested rights determination, those rights are transferable.  In the case of a vested right, however, it is uncertain whether the completed use would be considered a permitted use or a non-conforming use.

 

For claimants choosing the “express lane” or the “impossible dream,” the right to transfer the property, along with all the development rights, is granted immediately upon the receipt of the approval from the state.  In other words, a claimant receiving approval for two additional lots under the “express lane” can immediately sell the property and allow the new owner to obtain the land use approvals and develop the property. 

 

Alternatively, the successful claimant  can hold the property and retain the right to develop the property when he/she chooses to do so, as the development rights authorized by Measure 49 do not expire as long as the claimant owns the property.  If the claimant transfers the property, or the property passes through the claimant’s estate, the new owner has 10 years from the date of the transfer to commence the development.

 

Or a successful claimant can choose to create and sell one or two lots and retain the others.  Measure 49 provides much needed flexibility for claimants whose claims are approved under the “express lane” or the “impossible dream.”

 

WHAT IF I FILED A CLAIM FOR INDUSTRIAL OR COMMERCIAL USE UNDER MEASURE 37?

 

Measure 37 claimants who filed claims seeking industrial or commercial uses on their property and who have not completed development may proceed forward with the development, but only if they can establish a vested right.  Commercial and industrial development is not protected by Measure 49, so claimants who want to make commercial or industrial uses must obtain a vested right to do so.

 

Alternatively, claimants seeking commercial or industrial uses may be able to convert their claims to residential claims under either the “express lane” or “impossible dream” provisions of Measure 49.

 

WHAT IF MY M37 CLAIM IS FOR PROPERTY INSIDE THE URBAN GROWTH BOUNDARY?

 

Property owners who filed Measure 37 claims for property inside an urban growth boundary are not eligible for the “express lane.”  In order to obtain relief under Measure 49, claimants who made claims on property inside urban growth boundaries must use the appraisal process highlighted in the “impossible dream” section to determine whether they are entitled to construct a home or any additional homes on their property.  There is no justification for treating homeowners in urban areas differently from those in rural areas, but that is what the drafters of Measure 49 chose to do.

 

The above questions are the most basic.  Measure 49 leaves many more complex questions unanswered.  In the upcoming months, Oregonians In Action will attempt to address as many of these questions as possible.