Tax Lots, Lawfully Established Units of Land, and Lots of Record

“Tax Lots”, “Lots of Record”, and “Lawfully Established Units” and terms regularly used in advertisements for real estate and land use documents. Any person interested in real estate or land use should become familiar with these terms because they have legal significance and are often used incorrectly. This article defines and explains the importance of these terms.

Tax Lots: The term “tax lot” is not expressly defined in state statute, but originates from ORS 308.245, which obligates the assessor of each county to maintain maps “upon which are outlined the boundaries of each land parcel subject to separate assessment within the county, with the parcel’s tax lot or account number shown on the parcel.” In other words, a tax lot simply establishes the boundaries of a particular property tax account and is purely a tool for property tax assessment purposes. Although tax lots are commonly used to identify property, tax lots do not necessarily identify the legal boundaries of a property. Moreover, a tax lot does not establish whether a property can be developed or lawfully conveyed. The only thing that can be gleaned from an advertisement describing a property as comprised of multiple “tax lots” is that it has multiple property tax accounts with the County assessor.1

Lawfully Established Unit of Land: “Lawfully established unit of land” is defined in ORS 92.010(3)(a).2 In general, this term refers to a unit of land created through a lawful land division process. This term is important because ORS 92.018 provides a cause of action against the seller of any land that is unlawfully created.3 Accordingly, a seller of real estate can only lawfully convey a lawfully established unit of land. The boundaries of a lawfully established unit of land do not necessarily have to align with tax lot boundaries and a lawfully established unit of land is not necessarily developable.4

Lot of Record: A “lot of record,” which in some jurisdictions is referred to as a “legal lot of record,” “legal lot,” or “discrete parcel,” refers to a unit of land that is eligible for certain building permits or other land use entitlements. Of the three terms, determining lot of record status is the most important when buying or selling real property. There are no statutory requirements for a lot of record. The criteria for a lot of record are established by the local government with land use jurisdiction over the subject parcel.5 However, a common requirement is that the parcel be a lawfully established unit of land.

Most local jurisdictions adopted land partition ordinances in the 1970s after the adoption of Senate Bill 100, which mandated comprehensive land use planning statewide. Prior to adoption of such ordinances, it was permissible to create new units of land via deed. After adoption of such ordinances, property owners were required to go through a land use process (which generally required the recoding of a partition plat) in order to create new units of land. It took attorneys and title companies several years to catch on to these new requirements.

Consequently, numerous deeds have been recorded that un-lawfully established a unit of land. Under the standard definition of lot of record, this also means that the unit of land does not qualify as a lot of record. Historically, county tax assessors would often adjust tax lot boundaries based on those improper deeds leaving the lawful establishment and lot of record issues to go unnoticed. The lack of lot of record status is particularly problematic for properties with restrictive zoning such as Exclusive Farm Use (EFU). It can be difficult to fix a lot of record defect under such restrictions because it requires a demonstration that the property, as unlawfully established, could have been approved under the zoning standards in place at the time of creation.

Title insurance policies typically do not provide coverage for incorrect tax lot boundaries, unlawfully established units of land, or lot of record status. It is the responsibility of a buyer to make these inquiries as part of due diligence investigations. Sellers should also confirm the status of their property prior to listing because of potential liability under ORS 92.018. Moreover, a verified lot of record is more marketable than a property with a questionable lot of record status. Most jurisdictions have a lot of record verification process, but the assistance of a land use expert is often necessary for a property with a complicated history.

If you have questions regarding tax lots, lawfully established units of land, or lots or record, or otherwise need assistance with a real estate or land use matter, please contact BLJ for assistance.

1 Conversely, a tax lot could be comprised of multiple lawfully established units of land or lot of records and sometimes a single tax lot is created when real property is held under common ownership.
2 ORS 92.010(3)(a) defines “lawfully established unit of land” as follows:

(A) A lot or parcel created pursuant to ORS 92.010 to 92.192 [the statutory procedures for land divisions: subdivision, partition, replat]; or
(B) Another unit of land created:
(i) In compliance with all applicable planning, zoning and subdivision or partition ordinances and regulations; or
(ii) By deed or land sales contract, if there were no applicable planning, zoning or subdivision or partition ordinances or regulations.
(b) “Lawfully established unit of land” does not mean a unit of land created solely to establish a separate tax account.

3 Note that ORS 92.018 applies to sellers of real estate in general and is not limited to the specific party that unlawfully created the unit of land.
4 Local jurisdictions can establish criteria for a lot of record above and beyond the requirements for a lawfully established unit of land. Therefore, a lawfully established unit of land is not necessarily a developable lot of record. As an example, Deschutes County establishes a minimum area of 5,000 square feet and 50 feet wide (see Note 4). A deed that created a unit of land not meeting those minimum requirements prior to Deschutes County adopting its partition ordinance would be lawfully established, but not a lot of record.
5 By way of example, Deschutes County Code Section 18.04.030 defines “lot of record” as follows:

A. A lot or parcel at least 5,000 square feet in area and at least 50 feet wide, which conformed to all zoning and subdivision or partition requirements, if any, in effect on the date the lot or parcel was created, and which was created by any of the following means:

1. By partitioning land as defined in ORS 92;
2. By a subdivision plat, as defined in ORS 92, filed with the Deschutes County Surveyor and recorded with the Deschutes County Clerk;
3. By deed or contract, dated and signed by the parties to the transaction, containing a separate legal description of the lot or parcel, and recorded in Deschutes County if recording of the instrument was required on the date of the conveyance. If such instrument contains more than one legal description, only one lot of record shall be recognized unless the legal descriptions describe lots subject to a recorded subdivision or town plat;
4. By a town plat filed with the Deschutes County Clerk and recorded in the Deschutes County Record of Plats; or
5. By the subdividing or partitioning of adjacent or surrounding land, leaving a remainder lot or parcel.

B. Notwithstanding subsection (A), a lot or parcel validated pursuant to ORS 92.176 shall be recognized as a lot of record.

C. The following shall not be deemed to be a lot of record:

1. A lot or parcel created solely by a tax lot segregation because of an assessor’s roll change or for the convenience of the assessor.
2. A lot or parcel created by an intervening section or township line or right of way.
3. A lot or parcel created by an unrecorded subdivision, unless the lot or parcel was conveyed pursuant to subsection (A)(3) above.
4. A parcel created by the foreclosure of a security interest.

Article By Garrett Chrostek

Comments are closed.