“Stacking” Division Rights?
Another challenge for the Land Division Administrator
Over 17 years have passed since the Legislature amended the Subdivision Act of 1968, changing its name to the “Land Division Act (LDA)” and radically altering the rules for division of property, before the requirements for subdivision or “platting” approval kick in. Land division administrators have been wrestling with parent parcels, transfer of division rights, exempt transfers, bonus divisions, and the other challenges presented by the Act. Recently, we have become aware of another issue in determining the number of resulting parcels: Can “re-division rights” be added to or “stacked” on top of remaining “original division” rights?
The amendments to the Subdivision Control Act which took effect March 31, 1997, changed the calculation of the number of parcels which could be created before a property was required to go through the platting process. The number of resulting parcels which were to be permitted was based upon the size of the “parent parcel” – contiguous land under common ownership as of March 31, 1997. The Act also provided that transfers between adjacent properties were not to be considered divisions, nor would transfers which only created parcels greater than 40 acres in area, and allowed “bonus divisions” in certain situations.
Initially, we offer a suggestion to promote a better understanding of the LDA. The Act regulates the number of parcels which may be created out of a parent parcel. Using the term “resulting parcel” is less confusing than using the term “division” or “split.” One split or division creates two parcels; two splits or two divisions creates three parcels. The LDA does not deal with the number of times a property is divided; it deals with the number of resulting parcels created out of the original parent parcel.
In addition to the resulting parcels permitted based on the size of the parent parcel (let us call those parcels created by “original divisions”), the LDA also permits additional resulting parcels by re-division after 10 years. Section 108(5) of the Land Division Act provides in part that: “A parcel or tract created by an exempt split or a division is not a new parent parcel or parent tract and may be further partitioned or split . . . if . . . not less than 10 years have elapsed since the parcel or tract was recorded. . . .” and the further partitioning results in not more than two parcels for the first 10 acres, plus one parcel for each additional 10 acres, up to 7 parcels total (or 10 parcels if one resulting parcel is at least 60% of the area being partitioned).
These “re-division rights” have potentially been in existence since as early as 2007, the 10-year anniversary of the LDA amendments. Re-divisions are a one-time opportunity; they do not arise every 10 years.
Advocates of “stacking” interpret the LDA such that the total number of resulting parcels which may be created includes not only the number of “original divisions” allowed based on the size of the parent parcel, but also the number of re-division rights which would be available under Section 108(5) of the Act.
For example, suppose Joe owns a 40-acre parcel on March 31, 1997. In 2003, he sells a 2-acre parcel – the minimum allowed under the local zoning ordinance – to Bill. In 2014, Joe decides to create 10 additional parcels, or a total of 11 from the original 40-acre parent parcel. Joe, points out that while he has the right to create 7 resulting parcels from the original 40-acre parent parcel, he also has the right to create 4 “re-division” parcels based on the 38 acres he did not sell to Bill, for a total of 11 resulting parcels. The assessor responds: “Not so – the re-division rights are attached to Bill’s property, but they cannot be used because Bill’s parcel is too small to be divided under the zoning ordinance.”
Interestingly enough, the “stacking” example described above would allow one more resulting parcel than if Joe had taken as many division rights for the 40-acre parcel as he could have initially, then the maximum number of re-division rights were exercised 10 years later.
Proponents of “stacking” point to the legislative history of the revisions of the bills which eventually became the LDA amendments. Language of Section 108(5) in early versions of the bills would have clearly prohibited stacking, but that language was not in the amendment as enacted. On the other hand, while the final version of the LDA does not exclude or prohibit stacking, it is not expressly permitted either, but rather leaves the question ambiguous.
We think the correct interpretation of the Act is this: In a situation in which additional resulting parcels may yet be created based on the original parent parcel size, and in which there are also “re-division rights,” the owner is entitled to create the greater of the number of resulting parcels based on original divisions remaining, or the number based on re-division rights, but not both. One logical problem with attempting to apply the “stacking” theory is that the manner in which it works depends on whether one considers the original division rights to be taken first, or the “re-division rights” to be taken first. If the original division rights were considered to be taken first, then the resulting parcels become new parcels, which re-starts the 10-year time period before re-division rights attach. Also, Section 108(2), which governs original divisions, speaks in terms of the number of parcels being created from the parent parcel. Section 108(5), pertaining to re-division, however, speaks of tracts being “further petitioned or split;” it does not speak of the number of additional parcels which may be created from the parent parcel.
So far, there has been no reported decision determining whether the LDA permits stacking of re-division rights or not. Commentators are in agreement that the law is unclear on this subject, and urge legislative action to fix it. Expecting that the Legislature will grasp the question, let alone fix it, is probably not realistic, so do not hold your breath.
If you are facing a difficult situation regarding the number of resulting parcels which can be created, taking into account re-division rights, we would be pleased to assist.