When Two Become One – A Look at the Law of Merger of Adjoining Parcels

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A previously ignored fact buried in the hieroglyphics of a legal description suddenly presents possibilities to someone looking for value in their real estate, particularly in this economy. As we know, land that functions as a single property may actually include more than one distinct parcel or lot (we’ll use these terms as synonyms). As to whether these can be individually sold or developed, consider the following situation and imagine it involves your property, or one in your neighborhood:

An owner has two parcels of land next to each other.* One of these is half the land area of the typical residential lot–the result of splitting a lot in the 1930s so that two neighbors could build larger homes, each on a lot and a half. We’re concerned with just one of these extra-size properties. The house in our example sat on the combined site (one half-size parcel, one full) for seventy years, and has now been torn down. The current owner seeks permits from the city to build two new houses, including a small one on the half-size lot, and to sell them individually. Threatening this course is the notion that the parcels have somehow merged into one, which would allow only one replacement house. While over the years the property has clearly been used as a single building site, should the parcels now be considered fused, effectively erasing the line of separation? Or are land boundaries sacrosanct?

Merger in this legal context means the permanent combining of parcels that are adjacent and under common ownership. While developers often assemble contiguous parcels for a project (and combine them with a subdivision map or something similar), this article focuses on mergers initiated by local governments–adverse to the interests of the owners–so-called involuntary, forced or compulsory mergers.

Non-conforming Lots
Local governments typically only seek to impose a merger when it involves one further element: a parcel that does not conform to today’s zoning standards, such as minimum lot area or street frontage. Merger can be a planning tool to correct or ameliorate such non-conforming lots. Municipalities also use merger to control development inasmuch as it reduces the number of separate parcels, which curtails buildings and population.

The counterargument to the policy of eliminating non-conforming lots (besides the fact that many are adequate for use) is that they may enjoy constitutional protection based on grandfathering, if they adhered to the rules when the lots were created. Our half-lot example, though clearly non-conforming today, was lawful at the time both as to its size and method of division. No minimum lot area applied, and California law recognizes land divisions then accomplished by deed, a common practice of the day. In this light, the half-size property may be a runt, but it arguably stands on its own as a valid parcel.

With these points of view in mind, we will glimpse how merger is handled through an appellate case in California, and a contrasting approach in Pennsylvania.

California’s Merger Law
Merger has been governed by statute in California since it was added to the Subdivision Map Act in 1976 (see Cal. Gov’t Code § 66451.10 et seq.).** A California Court of Appeal case, Stell v. Jay Hales Development Company, 11 Cal. App.4th 1214 (Cal. Ct. App. 1992),*** is representative of the law’s application, and demonstrates that merger does not occur simply by operation of law.

In Stell, neighbors attempted to prevent a house from being built on what they considered to be a backyard. They alleged, among other things, that two parcels had merged. The property at the center of Stell was situated in a row of single-family homes on approximately one-acre lots in La Cañada Flintridge, a small city alongside the mountains, about twelve miles north of downtown Los Angeles. Within a public easement, a flood control channel ran through the row of lots. While the land underlying the easement was owned by each homeowner, the concrete channel physically split each lot, front from back. Although it did not divide ownership, the channel may have inspired the owner of Lot 12 to use his back half-acre for another house.

In 1960, that owner sold the front portion of Lot 12 and retained the rear in the shape of a flag lot with a driveway to reach the road. Several transfers of ownership followed and, at times, both portions of Lot 12 were held by the same owner. For decades, no second house was built, until the rear part was sold to the defendant and construction of a house began. The work presumably alerted neighbors, who sued, seeking an injunction to remove the nascent structure, which they claimed constituted a nuisance. After the trial court disagreed, the neighbors appealed.

The neighbors argued that Lot 12 had not legally been severed in two. In the alternative they contended, assuming two parcels, that those had merged during the time they were owned together. And, in support of the nuisance claim, they stated that, either way, the property’s single-family zoning allowed only one house on the lot.

The court’s holding on the first question–whether the property was lawfully divided–was that the 1960 deed effectively created a second parcel. Just as in our initial example, the deed escaped any “subdivision” regulation, a category then defined as the creation of at least five parcels. As for the merger argument, the court analyzed it in light of the Subdivision Map Act. The state law’s objective, from the start, was to bring a consistent procedure to an action that had been handled in a range of ways by local governments. Early on, the law did away with merger occurring simply as a result of common ownership of parcels. At its core, the law mandates that, to pursue merger, municipalities must first adopt an ordinance that safeguards the due process rights of landowners, including notification and an opportunity to oppose the merger at a public hearing.

In Stell, the California Court of Appeal affirmed the trial court’s ruling that the front and back parcels of Lot 12 had never merged: at no time did any regulation provide for their automatic merger, and, after the state law was passed, any merger accomplished under it would have been evident from a recorded notice, one of the law’s required procedures. Notably, in the court’s discussion of merger, no attention was given to Lot 12’s history as a unified single-family residence–the focus was on the procedural elements of merger. Stell illustrates the narrow availability, and stringent interpretation, of compulsory merger in California, and the rejection of any automatic merger occurring without a hearing.

Merger in Pennsylvania
A merger rule in Pennsylvania has a different emphasis, as illustrated by Cottone v. Zoning Hearing Board of Polk Township, 954 A.2d 1271 (Pa. Commw. Ct. 2008). A full-fledged map, approved by Monroe County and Polk Township, established the Robin Hood Lakes subdivision. After the map created numerous lots, some of the lots remained unsold and undeveloped for nearly thirty years. In 2003, a homebuilder bought sixteen vacant lots at a tax sale. The builder sold one of the lots to Ms. Cottone, and requested a permit from the Township to build a house for her.

The problem was that, while the lots had lain fallow, the Township adopted a new lot size standard for building a house in the residential zone. Although the subdivision had been approved with lots that amounted to less than three-tenths of an acre, this size fell short of the new zoning ordinance’s one acr
e minimum. On that basis, the Township denied the building permit, and, after an unsuccessful administrative appeal, Cottone and the builder sued.

The trial court upheld the Township’s decision to deny the permit. The court also agreed with the Township that the lot had merged with the adjoining lots prior to the sale to Cottone. On appeal, the Commonwealth Court of Pennsylvania reviewed the rules of merger and affirmed.

Function Over Form
Polk Township provided for the merger of lawfully-created but substandard lots according to a two-pronged scheme. Which path of analysis to follow depended on whether the lots were commonly owned at the time a new regulation rendered them non-conforming. If adjacent lots were commonly owned when an ordinance rendered them undersized– the situation in Cottone–the law presumed they were merged as necessary to make a parcel that complies with the zoning ordinance. To rebut the presumption, the landowner had to show an intention to maintain the lots as separate.

In Cottone the sixteen lots had been, until the recent sale, under common ownership since before adoption of the new lot size standard. The legal presumption, therefore, would require that lots be stitched together into minimum one-acre parcels. To prevail in showing that one
lot was independent required proving an intent to keep the lot separate. The appellants attempted to do so by pointing to the approved subdivision map (whose purpose, after all, was to create alienable units), and the fact that each lot had been assigned an individual tax identification number and sold by a separate deed.

Despite these facts, the court upheld the Township’s determination that a parcel merger had occurred, based on the use of the land. In order to establish an intent to keep the lots separate, the court cited the rule that more evidence was required than the mere subjective intent of the landowner. Indeed, “there must be proof of some overt or physical manifestation of intent to keep the lots in question separate and distinct.” Examples included “a line of trees, a fence or wall” to demarcate the boundary. Lot lines on an approved map could be considered, but, because of the stress on actual use, these were not dispositive.

Following the law’s bent, the court in Cottone characterized the subdivision map, and separate tax number and deed, as “abstract legal attributes [that] do not carry the day.” The court viewed the lot at issue as vacant land with no apparent physical differentiation from the adjoining lots, and this resulted in the changed status of these subdivision lots through merger.

Different Outcomes
Applying these rules from the Golden and Keystone States to our earlier example, we can guess what awaits the landowner hoping to squeeze a house onto the halfsize lot. If a California city wanted to use merger as the basis for denying a building permit application, it could do so only if procedures had been completed in accordance with a merger ordinance. Any attempt to frustrate the construction without legal justification could expose the city to a court order requiring the issuance of the ministerial permit. In contrast, if we subject our example to a rule where the history of use is relevant, the fact that a house had occupied the combined lot-anda-half site for so long would likely force the conclusion that the lots had merged.

These rules promote different ideas about how difficult it should be for a local government to regulate land. Ideologies aside, consider how well the results fit with their surroundings. Allowing our half-size lot to escape merger would go against its sole purpose from the start–as an add-on to its companion lot. It can be seen as introducing a uniquely small property into the block, and another family to the neighborhood–points that are, arguably, worth considering in a decision about merger.

Compelling merger can also have out of place results. The sixteen vacant lots in Cottone represented only a small portion of the Robin Hood Lakes subdivision. Changing the standard in existing neighborhoods like this could result in anomalies or alter an area’s desirable or historic character, which might be preserved by respecting grandfather rights.

Shades of Gray
An improved approach would draw from the best of both rules–including procedural safeguards and a reckoning with the history of use–without harming either concern. Further, and just as important, would be the responsiveness of the ordinance to individual cases. To succeed, findings of fact should be required that justify a merger according to stated policies.

A decision to merge lots should be supported by relevant facts, whether the safety of building on a small parcel is of concern, or protecting density of development or neighborhood character. Instead of a broad rule, tailoring a merger decision to the circumstances would allow landowners and planners to each make their case in light of policies written into legislation. With respect to the property interest side, landowners will be served by knowing the applicable rules and having a long view of future potential uses.

As both landowners and local governments have found, parcel merger has the potential to prevent undesirable use of non-conforming properties, and can also defeat expectations accompanying legitimate lots. Because of its consequential nature, merger should be employed in a considered and measured way.

Lloyd Pilchen is a lawyer with CA Land Use Professionals, LLP in Los Angeles, and a California and Illinois surveyor.

Editor’s Note: For more on this topic, read the longer version of this article on our website, including linking parcels by covenant and an evidentiary note on square footage.

* This example is derived from an actual administrative appeal of a building permit in which the author represented the permit holder.

** For a thorough account of California’s merger law, see Merger and Local Governments (1986), available from the California Governor’s Office of Planning and Research.

*** See Citizens for Covenant Compliance v. Anderson, 12 Cal.4th 345 (Cal. 1995) (disapproving a ruling in Stell regarding enforceability of restrictive covenants).

A 1.331Mb PDF of this article as it appeared in the magazine—complete with images—is available by clicking HERE

About the Author

Lloyd Pilchen, PS, Esq.

Lloyd Pilchen is a partner at Olivarez Madruga llp in Los Angeles and serves as legal counsel for cities and public agencies. He is a California and Illinois surveyor. Law Land Lines™ offers Lloyd’s take on the law.