By now, most owners of Oregon property are aware of Measure 37 and its potential effect on property development. What many don’t realize, however, is that Measure 37 impacts all transfers of real estate in Oregon – even property which is not subject to a Measure 37 claim. Specifically, all deeds and sale agreements used to transfer real property in Oregon must now contain disclosure language relating to Measure 37.

Measure 37 requires the government to waive land use restrictions which were not in effect at the time a property was acquired by its present owner, or to compensate the owner for the reduction in value resulting from such restrictions. On February 21, 2006, the Oregon Supreme Court upheld Measure 37, allowing local governments across Oregon to continue processing Measure 37 claims.

Regardless of the status of Measure 37, all documents transferring any Oregon real estate after January 1, 2006 must contain new language in order to comply with Oregon law.

Background
Oregon law has historically required all real property conveyance documents to contain a land use disclosure provision. Effective January 1, 2006, the law was modified to change the disclosure language which has been in use since 1995. The disclosure language must now incorporate a warning to purchasers and sellers relating to potential Measure 37 claims.

Are Your Documents in Compliance with Current Law?
Real estate professionals, individuals, estate planners, and anyone else drafting real estate conveyance documents without the assistance of legal counsel must take steps to ensure that their conveyance documents contain the current disclosure language. The required disclosure language for deeds and land sale contracts is as follows (the new language is in bold red text):

BEFORE SIGNING OR ACCEPTING THIS INSTRUMENT, THE PERSON TRANSFERRING FEE TITLE SHOULD INQUIRE ABOUT THE PERSON'S RIGHTS, IF ANY, UNDER ORS 197.352. THIS INSTRUMENT WILL DOES NOT ALLOW USE OF THE PROPERTY DESCRIBED IN THIS INSTRUMENT IN VIOLATION OF APPLICABLE LAND USE LAWS AND REGULATIONS. BEFORE SIGNING OR ACCEPTING THIS INSTRUMENT, THE PERSON ACQUIRING FEE TITLE TO THE PROPERTY SHOULD CHECK WITH THE APPROPRIATE CITY OR COUNTY PLANNING DEPARTMENT TO VERIFY APPROVED USES AND, TO DETERMINE ANY LIMITS ON LAWSUITS AGAINST FARMING OR FOREST PRACTICES AS DEFINED IN ORS 30.930 AND TO INQUIRE ABOUT THE RIGHTS OF NEIGHBORING PROPERTY OWNERS, IF ANY, UNDER ORS 197.352.

The required disclosure language for purchase and sale agreements and earnest money receipts is as follows:

THE PROPERTY DESCRIBED IN THIS INSTRUMENT MAY NOT BE WITHIN A FIRE PROTECTION DISTRICT PROTECTING STRUCTURES. THE PROPERTY IS SUBJECT TO LAND USE LAWS AND REGULATIONS , WHICH THAT, IN FARM OR FOREST ZONES, MAY NOT AUTHORIZE CONSTRUCTION OR SITING OF A RESIDENCE AND WHICH THAT LIMIT LAWSUITS AGAINST FARMING OR FOREST PRACTICES AS DEFINED IN ORS 30.930 IN ALL ZONES. BEFORE SIGNING OR ACCEPTING THIS INSTRUMENT, THE PERSON TRANSFERRING FEE TITLE SHOULD INQUIRE ABOUT THE PERSON'S RIGHTS, IF ANY, UNDER ORS 197.352. BEFORE SIGNING OR ACCEPTING THIS INSTRUMENT, THE PERSON ACQUIRING FEE TITLE TO THE PROPERTY SHOULD CHECK WITH THE APPROPRIATE CITY OR COUNTY PLANNING DEPARTMENT TO VERIFY APPROVED USES AND , THE EXISTENCE OF FIRE PROTECTION FOR STRUCTURES AND THE RIGHTS OF NEIGHBORING PROPERTY OWNERS, IF ANY, UNDER ORS 197.352.

Rationale
The Oregon legislature revised this disclosure language to benefit both sellers and purchasers. The language is intended to warn sellers that they may have a basis for a Measure 37 claim, which may otherwise be lost when selling the property. Purchasers are benefited by notice that neighboring property owners may have Measure 37 claims, which could eventually change the landscape around the property being acquired.

Consult a Qualified Attorney
“Do-it-yourselfers” beware: the conveyance documents you may be using to transfer real property in Oregon may now be obsolete. The attorneys on Dunn Carney’s Closely Held Business and Real Estate and Land Use teams can help bring your forms up to date and into compliance with the law.

If you have questions regarding real estate conveyance disclosure language or would like to consult with us about you or your company’s exposure in this area, please contact Randall L. Duncan, Chair of our Closely Held Business Team. We will be happy to accommodate your request.

Closely Held
Business Team

The Closely Held Business Team - Dunn Carney is dedicated to assisting business owners in navigating through the opportunities and challenges the law presents to advance each owner’s success in business. They understand the multifaceted issues business owners face each day and the need for responsive and proactive legal counsel.

Team members include:
Randy Duncan, Team leader
Bob Allen
Shane Antholz
Ric Ashe
David Buono
Brian Cable
Jack Cooper
Ken Davis
Tim Hering
Frank Hilton
Elizabeth Howard
Scott Jonsson
Robert Kerr
JoDee Keegan
John O'Neil
Eric Smith
Kyle Stinchfield
Bob Winger
J. David Zehntbauer