by Robert T. Yamachika
The Subdivision Map Act has a long memory. This is what a prospective purchaser of several parcels in Ventura County recently found out in Fishback v. County of Ventura (2005) 133 Cal.App.4th 896. This decision is an excellent overview of the arcane world of antiquated subdivisions.
In September of 1940, LA-Ventura Land Co. ("LA Land") recorded a survey on the southern portion of a 140 acre parcel ("parent parcel"). The survey purported to divide the southern portion of the parent parcel into 15 parcels. In less than one year, LA Land conveyed 10 parcels of the parent parcel to various grantees, leaving it with the four remaining parcels and the parent parcel. Several years later, LA Land conveyed a portion of the four retained parcels to the another party, the Kahns, who in turn divided the land into four more parcels. Eventually, 12 of the parcels which included some of the original 10 conveyances and others later conveyed from the retained parcel, were acquired by the Meltzers. In December of 2001, the Meltzers applied to the County for unconditional certificates of compliance for all 12 parcels.fn1 The Meltzers claimed that the parcels were legally created under the Subdivision Map Act ("SMA") as it was written in the 1940s. Their claim was based on two theories: (1) that the 1940 recorded survey created legal parcels and (2) that the conveyances from the parent parcel created legal parcels under the "annual quartering exception" to the definition of a subdivision.
The County determined that two of the 12 parcels were legal, and issued certificates of compliance for those. The County then determined that it made an error in issuing the two certificates but did not contest their issuance, but determined that the other 10 lots were illegal as violative of the SMA. The Fishbacks held an option to purchase the Meltzers' parcels and petitioned for a writ to compel the County to issue certificates of compliance for the 10 parcels. The trial court denied the petition, holding among other things, that the recorded survey did not create a legal subdivision and the annual quartering exception did not apply. The Fishbacks subsequently abandoned their contention that a recorded survey created a legal subdivision.
On appeal the Fishbacks argued that the parcels in question were legally created through the "annual quartering exception" to the definition of a subdivision. The parties agreed that the transactions in question were governed by the 1937 and 1943 versions of the SMA and that there is no substantial difference between the two versions.fn2 The SMA defined a "subdivision" as "any land or portion thereof, shown on the last preceding tax roll as a unit or as contiguous units, which is divided for the purpose of sale, whether immediate or future, by any subdivider into five or more parcels within any one year period." Because the definition of a subdivision required a division of a unit of land into five or more parcels in any one year, a division of a parcel into four or fewer parcels within a year was not governed by the SMA, i.e. the "annual quartering exception."
The court found that in less than one year, LA Land conveyed 10 parcels from the parent parcel and the 10 conveyances broke up the parent parcel so as to create 14 parcels, including four parcels left in possession of LA Land. The Fishbacks argued that under the annual quartering exception, the first four parcels conveyed are legal. The Court of Appeal did not agree based the plain language of the statute. The SMA defined a subdivision as a division of a unit of land into five or more parcels in any one year period. Once the fifth parcel is created within a one year period, all the parcels created within that year constitute a subdivision.
The Fishbacks also argued that the portions of the parent parcel that were retained after making the 10 conveyances were not parcels within the definition of a subdivision. Currently, section 66424.6(a) of the SMA allows a subdivider of a portion of a unit of land to designate a remainder parcel. The designated remainder is not counted as a parcel for the purpose of determining whether a parcel or final map is required. But section 66424.6(a) was not added until 1979. The Fishbacks pointed to no similar statute in existence at the time the parent parcel was subdivided.
The Fishbacks relied on the phrase, "or portion thereof," as used in the definition of a subdivision. But the court held that the phrase simply clarifies that an entire parcel does not have to be divided in order to qualify as a subdivision. Thus a party who acquires only a portion of a unit of land as shown on the tax rolls, cannot claim the right to subdivide without complying with the SMA. The phrase "or portion thereof" cannot reasonably be interpreted to mean that land retained by a subdivider does not count as a parcel. The Fishbacks also relied on the phrase, "for the purpose of sale." They argued the retained land was not divided for the purpose of sale. The Court of Appeal disagreed stating that the phrase, "for the purpose of sale," modifies "unit" or "contiguous units" of land. A unit of land is one shown on the "last preceding tax roll as a unit." If a "unit" or "contiguous units" of land are divided for the purpose of sale, it is irrelevant that the retained parcel is not held for the purpose of sale. Thus, for example, if the owner of a unit of land divides it in half, the unit is divided for the purpose of sale even if the owner intends to sell only one half and keep the other.
The Fishbacks' reliance on a Attorney General opinion (52 Ops.Cal.Atty.Gen. 79 (1969)) in the view of the Court of Appeal was misplaced. In that opinion, the Attorney General assumed the following facts: the owner of a contiguous tract of property filed a valid subdivision map dividing a portion of the property into eight parcels. The portion of the property that was not included in the map was not intended for sale, lease or financing at the time the map was filed. Later, the owner of the retained parcel decided to divide it into less than five parcels for the purpose of sale lease or financing. The Attorney General opined that the retained lot did not require a subdivision map. In so determining, the Attorney General stated: "[I]nsofar as an individual makes a division of a portion of contiguous real property, and, at the time the division is made, does not have an intent to divide for the purpose of sale, lease, or financing, any other part of such real property, that division should not be considered in determining whether or not a future division is a subdivision within the meaning of [Business and Professions Code] section 11535. The sole factor in determining whether prior divisions should be considered is the intent of the individual at the time the prior division is made." The flaw in the Attorney General's reasoning is the assumption that the intent to sell, lease or finance must apply to each parcel created by the division of a unit of land. The definition of subdivision applies if a unit or a portion of a unit of land is divided for the purpose of sale. Thus, as the previous example illustrates, a unit may be divided for the purpose of sale, even if the owner intends to sell only some of the parcels created by the unit's division. In Fishback it is undisputed that the parent parcel constituted a unit of land as shown on the tax rolls prior to its division. The entire unit was divided into 14 parcels by the sale of 10 parcels. Thus the unit was divided for the purpose of sale. It is irrelevant that the owner may not have had the intent to sell all of the parcels in the unit.
The Fishbacks argued that, if nothing else, the four parcels created by the Kahns are valid. But the court held that LA Land conveyed an illegal parcel to Kahn and that it was part of an illegal subdivision created when LA Land conveyed 10 lots from the parent parcel within a year. In effect, the Fishbacks argued that four legal parcels can be created by dividing an illegal parcel. The Fishbacks pointed out that a unit of land is defined as a unit as shown on the last tax roll preceding the division. However the court stated, "that does not mean the unit shown on the last preceding tax roll is a legal parcel. There is simply nothing in the definition of a subdivision that allows the creation of legal parcels by dividing an illegal parcel."
Finally, the Fishbacks argued that the conclusive presumption of section 66412.6(a) applied and the parcels were legally created. Section 66412.6(a) provides: "For purposes of this division or of a local ordinance enacted pursuant thereto, any parcel created prior to March 4, 1972, shall be conclusively presumed to have been lawfully created if the parcel resulted from a division of land in which fewer than five parcels were created and if at the time of the creation of the parcel, there was no local ordinance in effect which regulated divisions of land creating fewer than five parcels." However, March 4, 1972, is the effective date of legislation adding the requirement of a parcel map to the SMA for divisions of land into four or fewer parcels. Section 66412.6(a), simply clarifies that parcels legally created without a parcel map are legal even after the parcel map requirement was added to the SMA. The statute does not legalize illegally-created parcels. The statute requires that "the parcel resulted from a division of land in which fewer than five parcels were created ... ." In this case the four Kahn parcels resulted from the parent parcel's division into 14 parcels.
Finally, the court held that the Fishbacks' reliance on Lakeview Meadows Ranch v. County of Santa Clara (1994) 27 Cal.App.4th 593, was misplaced. In that case the court held that the owner of three parcels created prior to the enactment of the SMA was entitled to certificates of compliance. In so holding, the court relied on section 66412.6, subdivision (a). But in contrast to the Kahn parcels, none of the three parcels under consideration in Lakeview resulted from an illegal division of land.
After Fishback, what is a purchaser of illegal subdivision to do? Section 66499.35(b) of the SMA provides in part that the owner or vendee of a contract of sale can also seek a conditional certificate of compliance. The difference is that within subsection (b), the County can impose conditions on the development of the property. The conditions can vary depending upon whether the applicant is the illegal subdivider or a purchaser without notice of the illegality.
fn1 An owner of a parcel may request a local agency to determine whether the parcel complies with the subdivision laws, and if the local agency determines that the parcel does comply, it must record a certificate of compliance. Gov. Code § 66499.35(a).
fn2 If a subdivision map was filed after the first Map Act was enacted in 1893, its validity is determined by whether it met the requirements of the version of the Map Act that was in effect at the time the subdivision was established. Gov. Code §§ 66451.10, 66499.30; 74 Ops.Cal.Atty.Gen. 149 (1991).
Robert T. Yamachika is an associate with Abbott & Kindermann, LLP. For questions relating to this article or any other California land use, environmental and planning issues contact Abbott & Kindermann at (916) 456-9595.
The information presented in this article should not be construed to be formal legal advice by Abbott & Kindermann, LLP, nor the formation of a lawyer/client relationship. Because of the changing nature of this area of the law and the importance of individual facts, readers are encouraged to seek independent counsel for advice regarding their individual legal issues.