Property Owner’s Guide to Measure 37 Claims

Property Owner’s Guide to Measure 37 Claims

By Hunter B. Emerick
Saalfeld Griggs PC

On December 2, 2004, Measure 37 became law. This law provides new protections for some Oregon landowners whose properties are damaged by land use regulations. Those landowners who are protected by this law may receive compensation for the loss of property value resulting from the land use regulation. In the alternative, the governmental agency which enacted the regulation may choose to waive enforcement of the restrictive land use regulation.

Measure 37 allows landowners to file suit in state court or to pursue a claims process with the proper governmental agency. The landowner is not required to file a claim with the government agency before filing in state court. This claims process appears simple. There are, however, a number of issues to consider, such as, which agency should be presented with the claim, how long a landowner has to make the claim, and how to calculate and prove damages. Each governmental agency is adopting its own, unique claims process. The Department of Administrative Services for the State of Oregon has already established its claims process. It is possible that if the claim before the governmental agency is not successful, the claim may not be later pursued in state court. This issue, however, is not yet resolved.

This law protects only those landowners who have suffered a loss of property value resulting from a land use regulation which was imposed after the property was acquired by the landowner. The amount of damage should be the value of the property before application of the land use regulation and the value of the property after the regulation’s application. If the property was inherited by the landowner from a family member, land use regulations imposed during the family member’s ownership can also be challenged. Although Measure 37 is silent on this issue, its author states that transfers to trusts should not affect Measure 37 rights. This opinion has an important qualification. One of the beneficiaries and/or trustees of the trust must be one of the owners of the subject property before the transfer to the trust. Accordingly, before any transfer of any interest in real property, the affect of such a transfer on Measure 37 rights and remedies must be carefully analyzed.

Generally, land use regulations subject to Measure 37 include any statute regulating the use of land, rules and goals of the Land Conservation and Development Commission, local government comprehensive plans, zoning ordinances, land division ordinances and transportation ordinances, metropolitan service districts, regional framework plans, function plans, planning goals and objectives and statutes and administrative rules regulating fanning and forest practices. Measure 37 does not apply to statutes, administrative rules and local regulations that are intended to protect the health and safety of the public, such as fire codes, building codes, pollution control, sanitation codes, solid or hazardous waste regulations and traffic safety regulations.

Any Measure 37 challenge must start with a demand letter informing the proper government agency of the current ownership of the property and, if appropriate, any family history with the property, identifying the restrictive land use regulation causing damage, and estimating the damage to the value of the property resulting from the regulation. It will be important to have this demand letter properly and timely prepared. It will form the basis for the agency’s decision on enforcement of its regulation and the claim from compensation against the agency through its administrative process or through the state courts.

The jurisdiction has 180 days in which to decide to compensate the property owner for the damage or to waive enforcement of the land use regulation. If the jurisdiction waives the regulation, no monetary damages will be due. Under Measure 37, the agency need only waive regulations that were imposed while the present owner held the property. Unlike compensation claims, the owner is not allowed to add the period during which family members owned the property.

There are many unanswered questions created by application of this important protection for property owners. Those questions include what triggers the right to demand compensation, how overlapping restrictive land use regulations from different governmental agencies should be challenged, what types of claims process can be implemented by agencies, whether an agency’s claims process bars a property owner from pursuing a court case, how transfers between family members or related entities affect Measure 37 rights and whether waivers of land use regulations in response to a Measure 37 challenge attach to the property or are good only while the current owner holds the property.

If the government agency elects to enforce the regulation, the landowner will then have to file suit or follow the agency’s claim process to obtain compensation. It may be that the only way to recover attorneys fees incurred in obtaining compensation is to file suit in state court. The government agency’s claims process does not appear to be required to offer reimbursement of attorneys’ fees incurred in that effort.

Presenting the Measure 37 case for the state courts should be very similar to a condemnation or eminent domain lawsuit brought by a governmental agency for a physical taking of real property. This firm’s litigation department has handled many such cases. Measure 37 claims, however, will require careful analysis of the challenged land use regulations. Our firm’s land use department has years of experience with interpretation of and challenges to land use regulations. If you are interested in pursuing your remedies under Measure 37, or you are consider a transfer of an interest in your real property, our office is well prepared to represent you. We have already started a number of demand letters to governmental agencies for clients’ whose properties are restricted by land use regulations. Please call Mark Shipman or Hunter Emerick at Saalfeld Griggs pc, with any questions about Measure 37.