County modifies policies for lien contract releases, reversion to acreage

The county of San Diego’s policies on releases of lien con­tracts and reversion of proper­ty to acreage will be modified.

A 5-0 San Diego County Board of Supervisors vote Oct. 28 approved the introduction and first reading of the ordi­nance amendments and also found the action to be categori­cally exempt from California Environmental Quality Act review. The second reading and adoption was approved on a 5-0 vote Nov. 18. An ordinance amendment (other than a Zon­ing Ordinance change or an urgency adoption) takes effect 30 days after the second read­ing and adoption, so the official revision will occur Dec. 18.

A tentative parcel map be­comes a final map after all con­ditions of the tentative map, other than those for which permits cannot be issued un­til a final map is recorded, are fulfilled. A final map is re­quired for grading and build­ing permits. The conditions of a final map include secured agreements to ensure that the infrastructure will be built and that payment for labor and materials used to build the infrastructure will be made. The security agreement cov­ers completion of road, water, sewer, and other infrastructure improvements but does not re­quire completion of the homes or other lot improvements themselves.

The secured agreement may be a security bond. The bond company charges a fee, and if the bond is renewed so is the fee (which may be changed by the bond company). Some developers thus prefer the use of a lien contract, in which the property is transferred to a holding company. A lien con­tract prohibits the construc­tion of any improvements, the selling of any lots in the subdi­vision, or the issuance of per­mits before the lien contract is replaced by a security bond.

The county may release a lien contract only after the property owner provides a sub­stitute security. The security bond will cover 150 percent of the costs of the estimated security at the time the lien contract is replaced with the bonds. The county’s Subdivi­sion Ordinance provides op­tions for the full release of a lien contract but had not pre­viously addressed a partial release of the lien contract in which the lien contract is re­moved for some of the develop­ment while remaining in effect for the rest of the property. A partial replacement of the lien contract allows for construc­tion on lots in that area as well as the sale of lots.

Under the revised ordinance adequate security must be pro­vided for the area of the prop­erty for which the lien contract is released. The area released from a lien contract must be able to function as an indepen­dent unit. The improvements required to construct the por­tion of the subdivision released from the lien contract must be shown in the improvement plans and may require addition­al agreements if the county deems those new agreements to be necessary. The ordinance amendments also provide for reversion to acreage for the re­maining property if the terms of a lien contract are breached.

Reversion to acreage means that the previous parcel map no longer exists and the entire parcel is the sole legal lot. Re­version to acreage may occur when a subdivision is in de­fault of its deadlines or other conditions. Reversion to acre­age may also occur if the prop­erty owner considers the entire original parcel to be more valu­able than the separate lots, in which case those lots are re-merged with the reversion to acreage. Reversion to acreage also eliminates road improve­ment requirements and other conditions.

The Subdivision Ordinance had previously included stipu­lations for reversion to acre­age for subdivisions of five or more lots but not for parcel maps of four or fewer contigu­ous lots under the same own­ership. The revised ordinance clarifies that the reversion to acreage process also applies to the smaller parcel maps. In the event of a reversion to acreage all lots including remainder parcels will be included. The clarifications also formalize the requirement of a deposit for the reversion to acreage process to ensure that the costs for county staff time and other services are recovered.