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Subdivided Lands Law

DEFINITION

Rules in which a subdivider must adhere to when selling, leasing, or financing a subdivided property. The purpose of the law is to protect purchasers or leasers of the property from fraud, deceit, and misrepresentation by requiring the land owner to disclosure information regarding the property including the individual lots, parcels and/or units.

EXPLANATION

The Subdivided Lands Law was enacted by the California Department of Real Estate in order to protect the interests of buyers in the initial sale of subdivided property and to ensure that buyers are able to make an informed purchase.

Under the law, no subdivided properties can be sold until the Real Estate Commissioner has given a  final subdivision public report.

The primary purpose of the subdivided lands law is to protect consumers from the misrepresentation of real estate fraud or deceit in the sale or lease of property. The law protects consumers by making sellers of subdivided land disclose all information regarding the condition of the subject property to the real estate commissioner. This includes details of where the property begins and ends, what use the property serves (gas, natural resources, ranching, etc), and other details which assist the buyer in understanding the specifics of the property.

Once the details of the property have been submitted to the real estate commissioner, the real estate commissioner will prepare and issue a subdivision report for public records. Before issuing the report, the real estate commissioner will consider the financial standing of the property, in addition to changes that are going to be made (i.e. construction, renovation, drilling, etc.). The public records will indicate valuable information regarding the specifics of the property. Buyers can access this information to make better informed decisions regarding the purchase or leasing of the property.

There are three main types of subdivisions. They include:

Standard subdivision

Common interest subdivision

Undivided interest subdivision

Case Law Subdivided Lands Law

Case Review: People v. Byers (1970)

The case, People v. Byers (1979) 90 Cal.3d 140., involved a situation in which land was illegally subdivided and sold.

A property owner (Byers) illegally subdivided his land into four parcels and transferred them to his son. Together, father and son sold the parcels without following the procedures of the subdivided lands law. Knowing that he had violated the law, the father fled town to avoid prosecution. The son did not flee, and was tried in court for illegally subdividing and selling land.

The son argued that he had been unaware that his actions were unlawful. Nevertheless, the Superior Court found the son guilty. The son appealed. The Court of Appeals cited the Subdivision Map Act to argue that there was sufficient evidence to sustain the convictions. The court upheld the lower court’s ruling and the son was held liable for aiding and abetting a criminal (his father).

State Requirements

Subdivided land projects must abide by state law which have their own governing requirements. Before any sale or proposals are drawn up, adhering to the state requirements is extremely vital. Requirements can include an agent’s license being valid in order for them to legally sell subdivided lots as well as the public report that has been approved from the real estate commissioner. A sale could potentially be made by the officer even if  a broker license is not obtained.

The Public Report

A Subdivision public report withholds extremely important information that will eventually be given to the real estate commissioner in order to show the details of the subdivision before it is purchased. The details that are included in the public report need to be accurate to properly disclose the conditions of the subdivision.

The public report should include:

Sanitation Requirements

Title’s Condition

Streets and Roads

Police Activity

Fire Protection

Access to public utility lines

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