Family Subdivisions: Benefit to the Family or Opportunity for Abuse?

By: Andrew McRoberts, Editor. This was posted Thursday, September 10th, 2009

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Family subdivisions (sometimes called “family transfers”) are under fire in the news. According to the published accounts, the Suffolk City planning director is investigating at least two family transfer deals that are potentially unlawful. Adding to the controversy, the legal work on these two deals was reportedly handled by the mayor’s husband. Tough spot for the poor city staff member to be in, I say.

From this local government lawyer’s experience, misuse of the family division laws goes on all over the state. And it’s not just me. Frequent subdivision writer and speaker, friend and Roanoke City Attorney Bill Hackworth recognized the “mischief” these family subdivisions cause in one of his outlines a few years ago. See Hackworth, Subdivisions Regulations — Just the Basics, Please, 2005 LGA Fall Conference Handout (page 8).

All counties and the City of Suffolk (successor to rural Nansemond County) are authorized to allow family subdivisions. Virginia Code § 15.2-2244. Many are required to provide for family subdivision cuts with little regulation. Virginia Code § 15.2-2244(A). However, those with high growth or in high growth areas, as defined by the statute’s subsection (C) “may include reasonable provisions permitting [such divisions],” thus not requiring them at all. However, there is little political will to do away with these exceptions. After all, who can be against families?

Where permitted, family divisions allow exceptions to the normal subdivision requirements, in order to encourage these divisions. But these exceptions and short-cuts encourage some to use local family subdivision ordinances for profit, to create subdivisions where none should exist. Such abuses have caused many localities to enact restrictions including holding requirements, affidavit requirements, warning labels on deeds, restrictive covenants and other hurdles, but from my experience, there are always those that will be glad to jump the hurdles if there is large-enough profit at the end of the race.

A locality’s remedies for an invalid subdivision lot are relatively harsh, and sometimes the will is lacking to pursue them. A local government may deny building permits or other approvals, or to ask a Court for an injunction to bar development or set aside the division. See, e.g., Opinion of the Attorney General to William M. Hackworth, York County Attorney, 1989 Op. Atty. Gen. 100.

This would be painful for the subdivider, if caught quickly enough, but it is more often the lot buyer or his or her successors that get harmed by the locality’s enforcement of the law. It doesn’t seem fair that an innocent purchaser has their lot wiped away or permit for their dream home denied. But what happens if the house has already been built? The locality and the general public can be left without a practical remedy. Even without local government intervention, a violation of the subdivision ordinance is a ticking time bomb that can last for many years, waiting to explode into a problem at resale or denied building permit. And don’t forget the neighbors. What if you had no notice or opportunity for comment, but lived next to one of these subdivisions being created where it had no right to be?

The purpose of the family subdivision came out of the agrarian tradition that allowed a family farmer to cut off lots for his children, to provide for their need for domicile, to pass on a bit of the family estate (land) and to allow the family to live in close proximity to the family farm which they worked together. See, e.g., Opinion of the Attorney General to Mr. George R. St. John, Albemarle County Attorney, 1986-87 Op. Atty. Gen. 121. There are fewer and fewer places around the state these days where that arguably is needed or makes much sense, and modern estate planning is more flexible than it used to be.

Of course, there are still valid family subdivisions that meet all requirements and fulfill the purposes of the law. But, with the likelihood of abuses without practical and meaningful remedy that come with them, the question arises, are they worth the harms? Are they worth it in your locality?

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