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HomeMy WebLinkAboutLechner Estates Lot Line IssuesL Department of Administrative Services Dave Kanner, County Administrator November 24, 2009 TO: Board of Commissioners FROM: Dave Kanner RE: Lechner Estates Lot Line Issues 1300 NW Wall St, Suite 200, Bend, OR 97701-1960 (541) 388-6570 - Fax [541) 385-3202 www. co. deschutez. or. us Last summer, following a discussion of the lot line issues in Lechner Estates, the Board requested that I pull together for property owners in the subdivision a clear, step-by-step "road map" they could use for resolving their problems once and for all. A staff group consisting of me, Dave Inbody, Laurie Craghead, Mike Berry, Kevin Harrison and Teresa Rozic spent a considerable amount of time researching and discussing the various steps involved and came up with our final product in early October. In order to accommodate the schedules of the leaders of the Lechner Estates property owners group (one of whom lives in Arizona), we were not able to present this to them until November 23rd. There is further discussion of that meeting below. Background Lechner Estates was created in the late 1950s by Bert and Pearl Lechner on about 300 acres of land south of Burgess Road, west of what is now the city of La Pine. The Lechners hired a timber company surveyor to mark the subdivision tracts. There was no legal requirement at that time that the subdivision plat be recorded. When the Lechners began selling individual lots within the subdivision, the deed descriptions did not match the tracts laid out on the ground by the private surveyor. As a result, purchasers acquired properties whose boundaries were significantly different than what they thought they were acquiring. Today, roads that were thought to have been contiguous with property lines in the 1950s run through the middle of properties as described, fences run across property lines and there may be additional problems with the placement of wells and septic systems. In addition, when the Lechners finished creating these inaccurate deed descriptions, they were left with an oddly shaped remnant parcel that is today referred to as tax lot 100. The County acquired this parcel from the Lechners via tax foreclosure in 1973. The problems in the area first came to the County's attention in 1989, when a County -owned tract was sold to a private party. The County Commissioners were notified that surveys in the area were inconsistent with deed descriptions and the sale was rescinded. The Enhancing the Lives of Citizens by Delivering Quality Services in a Cost -Effective Manner County surveyor was directed to reset the public land survey corners in the area and this work was completed in 1991. It was also determined at that time that a resolution to the problem was outside of the County's jurisdiction. These lot line problems resurfaced in 2007, when Commissioners were contacted by a property owner who was unable to sell her property because of her inaccurate deed description. Over the course of the next year, the County was contacted by other property owners experiencing similar problems. In 2008, at the Board's request, staff assembled and mailed an FAQ sheet to all property owners in the subdivision providing background information and options for dealing with the problem, as well as an explanation as to why Deschutes County cannot fix the problem. Earlier this year, some property owners asked that the County take a more direct role in laying out the steps that need to be taken to solve the problem, which brings us to where we are today. The Way Forward I must emphasize again that the County cannot solve this problem for the property owners. The deeds and deed conveyances are essentially private contracts in which we cannot legally intervene. It would seem that at a minimum, the owners of the 41 lots bisected by the private roads in the subdivision need to voluntarily agree to participate in a solution. The problem, of course, is that because the solution involves the simultaneous adjustment of a large number of contiguous lot lines, any individual property owner has de facto veto power over the entire process. On November 23rd, staff met with eight property owners from Lechner Estates and provided them with the attached information. As you can see, there are nine steps the property owners need to go through. Some of these steps are process items that need to be taken care of by the County, such as lot of record verification and survey review, but these are items we take care of on a fee-for-service basis at the request of a property owner; these are not things we unilaterally do on our own. Note that the County does not conduct private property surveys. (The County Surveyor's Office maintains the public corner system.) The conversation during this meeting was quite spirited and focused in large measure on the costs involved. I think it is fair to say that to the extent practical, the property owners would like to see a direct financial contribution from the County. This financial contribution would take the form of: • Waiving the fee for the code text amendment (or making it a County -initiated amendment) • Paying the fees for the lot of record verification. (Laurie is researching whether we can legally do this.) • Paying the fees for the lot line adjustments. (Ditto.) • Paying the fee for the survey review. (Ditto again.) If we assume that 41 lots are involved and we agreed to the above, the County's cost would be $41,260. We were also asked if the County would be willing to bid out and pay for the necessary survey work, then bill each of the affected properties for a share of the cost. We told them we would probably not do so. In addition, the County would need to do a survey of tax lot 100, since part of the solution will involve lot line adjustments and transfers of portions of that tax lot to adjoining properties. The cost of such a survey would be $2,000 - $3,000. Policy Questions for the Board: 1. Is the County willing to give up tax lot 100 and deed apportioned pieces of it to adjoining property owners in order to achieve a solution to the private property lot line problems? I would recommend that we do so. TL 100 is completely landlocked and has little market value. 2. Is the Board willing to waive or pay any or all of the fees for those services the County must provide as part of the solution? I would recommend that we do so for the text amendment, which may have a general benefit for similarly situated properties in the County (if there are any), but the rest of the fees are for individual private properties without demonstration of hardship. Given that there are lot line issues all over the County (although few, if any, on this scale) such waivers would set a dangerous precedent. It would also raise issues (that Laurie is researching) regarding the use of public funds for private benefit without benefit to the general public health and welfare. 3. Is the Board willing have staff bid out the survey work and then bill each of the affected properties? I recommend against this. We have no way of compelling repayment other than by a lien on each individual property, and each lien would likely be in second (or third or fourth) position. We look forward to discussing this with you further on November 30tH Possible Lot Line Issue Resolution — Steps for Property Owners 1. Deschutes County Code Change — Submit a text amendment changing the Deschutes County Code to allow for the reduction of substandard parcels by more than 10%. 2. Lot of Record Verification — Request verification that each parcel is a legal lot, 3. Survey Property —Hire a private surveyor to conduct a survey and write new deed descriptions and easements (specifics associated with survey process outlined below). 4. Lot Line Adjustment Application — Based on the completed survey, submit application identifying all lot line adjustments. This can be achieved as a "before and after" description of lots in one application. 5. Survey Review — Submit the completed survey to the County Surveyor for review. 6. Preliminary Title Report —Request a preliminary title report for each lot. 7. Check with Lender —Confirm with mortgage lender what is required to change the property description on mortgage. 8. Transfer to Entity — All deeds are turned over using one of the following methods: a. Title Company —Hire a title company to act as transfer entity by holding property in escrow. b. New Entity - Establish a separate entity to which properties will be deeded and properties with adjusted lot lines will be returned (possibly an LLC) c. County —transfer property to Deschutes County that will act as the transfer entity d. Court Settlement —All property owners enter into a suit to quiet title that results in a settlement with lot lines redrawn. e. Recordable Deed — All property owners enter into a recordable deed that is a boundary line adjustment agreement in which all parties will be grantors and grantees. 9. Transfer to Property Owners — All parcels identified with corrected lot lines are transferred back to property owners through one of the five methods identified in step #8. Costs Associated with Steps in Process These estimates do not include costs associated with property owners hiring private legal counsel or other outside expertise during this process. Steffi Estimated Cost 1. Code Chane $5,000 2. Lot of Record Verification $420/Lot 3. Survey Property —$2,500/Lot 4. Lot Line Adjustments $420/Adjustment, avg. 6 per lot $1,000 + $20/Adjustment 5. Survey Review 6. Preliminary Title Report $250/Lot 7. Check with Lender May be fee for change —500 create entity, —$50 submit deed 8. Transfer Property to Entity 9. Transfer to Property Owners $50/Lot # Lots Total Cost Property Description 29 Lots $176,490 All properties directly south of County -owned Lot 100 41 Lots $246,810 All owners that signed Mulenex agreement 102 Lots $604,270 All properties in SW corner of Section 4, Township 22 South, Range 10 East 229 Lots $1,348,490 All properties in West half of Section 4, Township 22 South, Range 10 East Property Survey Process The cost for surveying the property can vary dramatically depending upon a variety of factors. If owners put it out to bid, County Surveyor would be willing to discuss history of area, survey issues and logical procedures to fix it with survey companies submitting bids — to ensure more accurate bids. A surveyor would need to work through the following steps: 1. Setting Control Points for Accurate Aerial Ortho-Photo — more accurate than what we currently have. Price to have it flown about $100/acre -i 29 lots (-50 acres) _ $5,000. Aerial photo can be used to: a. Roughly map improvements not obscured by trees b. Plan efficient field survey strategy — crew costs $5,000+/week c. Identify potential conflict areas of occupation d. Serve as base map to plot out underground utilities, fences, and proposed boundary lines. 2. Precisely Survey Outer Boundary of Agreement Area —probably occupation vs. deed problems that won't be fixed by this agreement, surveyor will have to identify physical encroachments and deed discrepancies along exterior boundary of final survey 3. Survey AN Internal Occupation Lines — roads, driveways, fences, and cleared areas (lawns, pastures). Existing deed boundaries for internal properties won't need to be calculated since agreement extinguishes them. All deeds ever recorded for this area will need to be reviewed to identify, and possibly relinquish and recreated, existing easements. This is usually done by a title company charging by the hour. 4. Identify Unrecorded Iron Pipe Corners - compare them to current occupation lines. They can also provide a basis for establishing a geometric pattern for lots with no pipes, no occupation lines or owners haven't cleared or fenced beyond their homes. 5. Survey Existing Improvements along Proposed Lot Lines (buildings, sheds, aboveground and underground utilities, drain fields and wells) - consider in establishment of new lot lines. 6. Place Stakes along Proposed Lines - especially corners not intervisible 7. Map Conflict Area — the existence of pipes or proposed boundary lines that don't coincide with fences or other improvements will need to be addressed possibly via arbitration. Surveyor will probably need to place stakes in these areas, draft sketches for review by affected parties and make revisions as problem is being resolved. 8. Descriptions for New Parcels (and any easements) — potential problems, such as encroaching drain fields, could be remedied by easements or license agreements. 9. Prepare Survey — for filing at surveyor's office 10. Walk boundary lines with owners — reference in recorded agreement to reduce likelihood of future litigation Potential Cost Savings Step Alternatives Estimated Cost Alternative Cost 1. Code Change County initiates code change $5,000 $0 2. Lot of Record Verification No alternative $420/Lot $420/Lot 3. Survey Property Bidding process for all surveys may result in a lower cost —$2,500/Lot Low bid 4. Lot Line Adjustments Use "before and after" approach, only one adjustment per lot $420/Adjustment, avg. 6 per lot $420/Lot 5. Survey Review "Before and After" with one survey results in lower cost for review and one adjustment per lot $1,000 + $20/Adjustment $225 + $20/Lot 6. Preliminary Title Report No alternative $250/Lot $250/Lot 7. Check with Lender No alternative May be fee for change May be fee for change 8. Transfer Property to Entity Do not create an entity 500 create entity, —$50 submit deed —$50 submit deed 9. Transfer to Property Owners No alternative $50/Lot $50/Lot # Lots Estimated Cost Alternative Cost Property Description 29 Lots $176,490 $106,415 All properties south of County -owned Lot 100 41 Lots $246,810 $150,335 All owners that signed Mulenex agreement 102 Lots $604,270 $373,595 All properties in SW corner of Section 4, Township 22 South, Range 10 East 229 Lots $1,348,490 $838,415 All properties in West half of Section 4, Township 22 South, Range 10 East