Zoning Confirmations: Buyer Beware!
In Oregon, instruments that transfer or contract to transfer fee title to real property must contain a disclaimer stating that the person acquiring fee title should check with the appropriate city or county planning department to verify the approved uses of the lot or parcel before accepting the instrument. In other words, individuals accepting title or contracting to accept title in Oregon are statutorily obligated to determine the property's zoning.
Although individuals acquainted with land use planning in Oregon likely understand the importance of ascertaining a property's zoning before acquiring title, few understand the risks associated with seeking such zoning confirmations from city or county planning departments.
In a recent Oregon Court of Appeals case, Loosli v. City of Salem, 215 Or App 502 (2007), the plaintiffs desired to open a vehicle sales business in Salem. On two occasions, city planning staff told the plaintiffs that there were no zoning or land use restrictions that prohibited such a use. Relying on those assurances, the plaintiffs entered into a lease and began to improve the property. The plaintiffs subsequently secured a signed statement from planning staff that the property complied with all land use ordinances for the operation of a vehicle sales business.
However, after the plaintiffs had improved the property and opened their business, the city notified them that they were in violation of the city's land use ordinances and ordered them to cease operation of their business. The plaintiffs subsequently sued the city, alleging that the city had negligently misrepresented the property's compliance with all land use ordinances.
Even though the plaintiffs had detrimentally relied on the city's representations, the court concluded that the city had no heightened duty to act for the benefit of the plaintiffs. Because there was no "special relationship" between the city and the plaintiffs, planning staff had no obligation to pursue the plaintiffs' interests, and therefore the plaintiffs were without remedy.
Although the Loosli case provides an extreme example of the risks associated with seeking a zoning confirmation, it highlights the importance of diligently pursuing all available information. Accordingly, individuals seeking to acquire title should, at a minimum, do the following:
First, be wary of relying on Web sites. Although city and county officials routinely refer individuals to zoning and comprehensive plan maps posted on city and county Web sites, many of these sites expressly disclaim the accuracy and completeness of the zoning representations contained therein. For example, Marion County's Web site provides that the county in no way "warrant[s] the accuracy, reliability or timeliness of any of the data provided" on the online maps.
Second, do not rely on verbal zoning confirmations from local planning staff. If you cannot see the documents, there is a chance that the planning staff member could be viewing an "unofficial" or online version of the zoning map or providing information about the wrong property.
Finally, if you visit the local planning office, secure as much information as planning staff will provide and keep accurate records. If you request a zoning confirmation and planning staff refers you to either an unofficial counter map or a computer to look up the zoning on the city's or county's Web site, ask whether there could be any discrepancy between that counter or Web site map and the official map. If planning staff indicates that a discrepancy could exist, request to review the official map. Once you are confident that you have viewed the official map, keep accurate records of the steps you took to confirm the zoning on your property. Make copies of the maps, and record the dates you visited the planning office and the names of the planning staff members who assisted you.
For more information about the issues in this update, please contact:
Stoel Rives' Development Law Group comprises lawyers specializing in real estate, land use, condominiums and planned communities and construction law.
Stoel Rives is a business law firm providing counseling and litigation services to a wide range of clients throughout the United States. The firm has more than 350 attorneys operating out of 11 offices in seven states. For more information, visit www.stoel.com.