Landwatch Lane County v. Lane County

Where a parcel is wholly transferred but later divided into separate lots because of a lien foreclosure on part of the parcel, LUBA will validate the division.

Tax Lot 1300 (TL 1300), the subject property, is zoned Exclusive Farm Use (EFU) 30-acre Minimum. TL 1300 was once part of a larger parcel (the Parcel). The Parcel sold and the sellers executed a warranty deed transferring ownership to the buyers (the Warranty Deed). In the same transaction, the buyers executed a trust deed for the benefit of the sellers that encumbered only a portion of the Parcel (the Trust Deed). After the buyers defaulted on the Trust Deed, the encumbered portion of the Parcel, which later became Tax Lot 1301 (TL 1301), was foreclosed and transferred back to the sellers via a trustee’s deed (the Trustee’s Deed).

Intervenors applied for a legal lot verification of TL 1300. The planning director determined that TL 1300 was not created lawfully and denied the application. Intervenors appealed to the hearings officer who determined that TL 1300 was created lawfully by the Trustee’s Deed because of the foreclosure on TL 1301 and reversed. Petitioner appealed.

ORS 215.263(1) provides that EFU land divisions must be reviewed and approved before division, but ORS 215.263(7) provides that ORS 215.263 doesn’t apply to “divisions of land resulting from lien foreclosures.” Petitioner argued that the hearings officer erred in determining that TL 1300 was lawfully created by the Trustee’s Deed because TL 1300 was created by the Warranty Deed and therefore didn’t comply with applicable division laws. Petitioner further argued that this matter was like Perkins v. Umatilla County, 45 Or LUBA 445 (2003) (where a portion of an EFU-zoned property was conveyed via deed without compliance to applicable division laws and the remaining portion was later foreclosed on a tax lien).

LUBA determined that TL 1300 was not created by the Warranty Deed because it conveyed the entire Parcel. LUBA determined that TL 1300 was not created by the Trust Deed because the buyers remained the owners of the unencumbered portion of the Parcel (TL 1300) once the Trustee’s Deed was executed and transferred ownership of TL 1301. LUBA reasoned that TL 1300 was created by the Trustee’s Deed because TL 1300 and TL 1301 were then under different ownerships. LUBA reasoned that this matter was unlike Perkins because the properties in Perkins were conveyed and under different ownerships before the foreclosure, while the Trust Deed in this matter only created a security interest, not a new ownership. Accordingly, LUBA held that the hearings officer did not err in determining that TL 1300 was lawfully created by the Trustee’s Deed.

Affirmed.