Untitled California Attorney General Opinion ( 1994 )

TO BE PUBLISHED IN THE OFFICIAL REPORTS
OFFICE OF THE ATTORNEY GENERAL
State of California
DANIEL E. LUNGREN
Attorney General
______________________________________
OPINION :
: No. 94-304
of :
: July 21, 1994
DANIEL E. LUNGREN :
Attorney General :
:
ANTHONY S. Da VIGO :
Deputy Attorney General :
:
______________________________________________________________________________
THE HONORABLE TRICE HARVEY, MEMBER OF THE CALIFORNIA STATE
SENATE, has requested an opinion on the following question:
Under the provisions of the Subdivision Map Act, may two or more remainder parcels
be designated when a developer subdivides portions of more than one parcel for the first phase of
a housing development and intends later to subdivide the undeveloped portions for subsequent
phases of the development?
CONCLUSION
Under the provisions of the Subdivision Map Act, two or more remainder parcels may
not be designated when a developer subdivides portions of more than one parcel for the first phase
of a housing development and intends later to subdivide the undeveloped portions for subsequent
phases of the development.
ANALYSIS
We are advised that a developer plans to subdivide portions of contiguous parcels of
land for the first phase of a housing development. The portions that are not part of the first phase
will be subdivided later for the subsequent phases. For example, a developer purchases 3 contiguous
parcels of 20 acres each. He plans as a first phase to subdivide five acres of each parcel into half-
acre lots. We are asked whether, in creating the 30 lots, he may designate the remaining 15 acres
of each original parcel as a "remainder parcel" on the maps of the subdivision. We conclude that
he may not so designate these undeveloped areas.
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The Subdivision Map Act (Gov. Code, §§ 66410-66499.37; "Act")1 vests local
governments with control over the design (§ 66418) and improvement (§ 66419) of land
subdivisions in California (§ 66411; see Morehart v. County of Santa Barbara (1994) 7 Cal. 4th 725,
748; City of West Hollywood v. Beverly Towers, Inc. (1991) 52 Cal. 3d 1184, 1189). A subdivider
must obtain approval of and record a subdivision map with the governing local entity before the
resulting parcels may be sold, leased, or financed. A "parcel map" is required when creating four
or fewer parcels (§ 66428), while a "tentative map" and "final map" (§ 66426) are required when
creating five or more parcels under the Act's general provisions. (See John Taft Corp. v. Advisory
Agency (1984) 161 Cal. App. 3d 749, 755; South Central Coastal Regional Comm. v. Charles A. Pratt
Construction Co. (1982) 128 Cal. App. 3d 830, 845; Simac Design, Inc. v. Alciati (1989) 92
Cal. App. 3d 146, 157-159.)2
The main purposes of the Act are to facilitate orderly community development and
to protect the public from fraud and exploitation. (South Central Coast Regional Comm. v. Charles
R. Pratt Construction, Co., supra, 128 Cal.App.3d at 844-845; Benny v. City of Alameda (1980) 105
Cal. App. 3d 1006, 1011; Simac Design, Inc. v. Celciati, supra, 92 Cal.App.3d at 157-158; Pratt v.
Adams (1964) 229 Cal. App. 2d 602, 605-606.)
As conditions of approving a subdivision map, a city or county may require the
subdivider to install or pay fees for the installation of such improvements as streets, sewers, parks,
and school facilities made necessary by development of the subdivision. (See, e.g., §§ 66419-66421,
66462-66485; South Central Coast Regional Comm. v. Charles A. Pratt Construction Co., supra,
128 Cal.App.3d at 845, 74 Ops.Cal.Atty.Gen. 89, 91 (1991); 73 Ops.Cal.Atty.Gen. 152, 153 (1990);
66 Ops.Cal.Atty.Gen. 120, 121-123 (1983); 62 Ops.Cal.Atty.Gen. 246, 247 (1979).)
A "subdivision" for purposes of the Act's requirements is defined in section 66624
as follows:
"`Subdivision' means the division, by any subdivider, of any unit or units of
improved or unimproved land, or any portion thereof, shown on the latest equalized
county assessment roll as a unit or as contiguous units, for the purpose of sale, lease
or financing, whether immediate or future except for leases of agricultural land for
agricultural purposes. Property shall be considered as contiguous units, even if it is
separated by roads, streets, utility easement or railroad rights-of-way. . . ."
The statute requiring our interpretation is section 66424.6 defining "remainder parcels." Section
66424.6 provides:
"(a) When a subdivision, as defined in Section 66424, is of a portion of
any unit or units of improved or unimproved land, the subdivider may designate as
a remainder that portion which is not divided for the purpose of sale, lease, or
financing. Alternatively, the subdivider may omit entirely that portion of any unit
of improved or unimproved land which is not divided for the purpose of sale, lease,
1
All references hereafter to the Government Code are by section number only.
2
Divisions of land in violation of the Act may result in criminal prosecution (§ 66499.31),
rescission of conveyance transactions (§ 66499.32), a claim for damages (§ 66499.32), a court
injunction (§ 66499.32), and the withholding of development permits (§ 66499.34), among other
consequences. (See Cal. Subdivision Map Act Practice (Cont.Ed.Bar 1987) §§ 8.1-8.8, pp. 197-205,
hereafter "CEB"; Longtin, Cal.Land Use Regulations (2d ed 1987) §§ 6.60-6.62, pp. 702-707.)
2. 94-304
or financing. If the subdivider elects to designate a remainder, the following
requirements shall apply:
"(1) The designated remainder shall not be counted as a parcel for the
purpose of determining whether a parcel or final map is required.
"(2) For a designated remainder parcel described in this subdivision, the
fulfillment of construction requirements for improvements, including the payment
of fees associated with any deferred improvements, shall not be required until a
permit or other grant of approval for development of the remainder parcel is issued
by the local agency or, where provided by local ordinance, until the construction of
the improvements, including the payment of fees associated with any deferred
improvements, is required pursuant to an agreement between the subdivider and the
local agency. In the absence of that agreement, a local agency may require
fulfillment of the construction requirements, including the payment of fees associated
with any deferred improvements, within a reasonable time following approval of the
final map and prior to the issuance of a permit or other grant of approval for the
development of a remainder parcel upon a finding by the local agency that
fulfillment of the construction requirements is necessary for reasons of:
"(A) The public health and safety; or
"(B) The required construction is a necessary prerequisite to the orderly
development of the surrounding area.
"(b) If the subdivider elects to omit all or a portion of any unit of improved
or unimproved land which is not divided for the purpose of sale, lease, or financing,
the omitted portion shall not be counted as a parcel for purposes of determining
whether a parcel or final map is required, and the fulfillment of construction
requirements of offsite improvements, including the payment of fees associated with
any deferred improvements, shall not be required until a permit or other grant of
approval for development is issued on the omitted parcel, except where allowed
pursuant to paragraph (2) of subdivision (a).
"(c) The provisions of subdivisions (a) and (b) providing for deferral of
the payment of fees associated with any deferred improvements shall not apply if the
designated remainder or omitted parcel is included within the boundaries of a benefit
assessment district or community facilities district.
"(d) A designated remainder or any omitted parcel may subsequently be
sold without any further requirement of the filing of a parcel map or final map, but
the local agency may require a certificate of compliance or conditional certificate of
compliance."
Under the general terms of section 66424.6, a "remainder parcel" is not to be counted when
determining whether a parcel or final map is to be recorded, and improvements or fees assessed for
improvements on the remainder parcel are to be delayed until the remainder parcel is developed.
A remainder parcel may either be designated as such on the appropriate subdivision map or omitted
entirely from the map. (See §§ 66434 [final map], 66445 [parcel map].) In the example given at the
outset, the issue would be whether the undeveloped 15 acres of each of the initial parcels may be
designated as remainder parcels or omitted entirely from the requisite tentative and final maps or
whether they must be considered as part of the first phase of the development.
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In analyzing the language of section 66424.6, we are guided by several well
recognized rules of statutory construction. "In construing a statute a court's objective is to ascertain
and effectuate the underlying legislative intent." (Moore v. California State Board of Accountancy
(1992) 2 Cal. 4th 999, 1012.) "In determining intent, we look first to the language of the statute,
giving effect to its `plain meaning.'" (Kimmel v. Goland (1990) 51 Cal. 3d 202, 208.) Both the
legislative history of the statute and the wider historical circumstances of its enactment may be
considered in ascertaining the legislative intent. (California Mfrs. Association v. Public Utilities
Commission (1979) 24 Cal. 3d 836, 844.) "The words of the statute must be construed in context,
keeping in mind the statutory purpose, and statutes or statutory sections relating to the same subject
must be harmonized, both internally and with each other, to the extent possible. [Citations.]"
(Dyna-Med, Inc. v. Fair Employment & Housing Com. (1987) 43 Cal. 3d 1379, 1387.) "When
uncertainty arises in a question of statutory interpretation, consideration must be given to the
consequences that will flow from a particular interpretation. [Citation.] In this regard, it is
presumed the Legislature intended reasonable results consistent with its expressed purpose, not
absurd consequences. [Citation.]" (Harris v. Capital Growth Investors XIV (1991) 52 Cal. 3d 1142,
1165-1166.)
Applying these rules, we find that the division of a portion of a unit of land for the
purpose of sale, lease, or financing is a "subdivision." (§ 66424.) The portion of the unit that
remains, i.e., the area which is not intended to be sold, leased, or financed is the "remainder." While
a remainder parcel is thus created by a division of property for the purpose of sale, lease, or
financing, the subdivider has no such purpose for the remainder parcel itself. Such construction of
section 66424.6, in light of section 66424, is reasonable and effectuates the Legislature's apparent
intent.
In the example given above, the proposed subdivision is of portions of three
contiguous units of land. Each unit will have a portion that is not intended to be part of the initial
phase of the development. We believe that under the language of section 66424.6, a subdivider may
designate as a remainder only one portion of a unit; the terms "a remainder" and "that portion" are
both singular. However, there is nothing in the statute to suggest that a portion of only one of
several units may be so designated. Specifically, the words "a portion of any unit or units" are
neither literally nor logically limited either to a portion of any one unit or to a single portion which
encompasses territory of more than one unit.
Even without regard to the words "or units" contained in section 66424.6, "a portion
of any unit" is not inherently constrained. Thus, the second sentence of subdivision (a) of section
66424.6 provides that ". . . the subdivider may omit entirely that portion of any unit" of land which
is not intended to be sold. We have previously observed that the use of the indefinite adjective "any"
indicates that the application is without restriction or limitation. (71 Ops.Cal.Atty.Gen. 167, 169
(1988); see Emmolo v. Southern Pacific Company (1949) 91 Cal. App. 2d 87, 92.)
Our reading of section 66424.6 is confirmed by examining the statute's legislative
history. The report of the Assembly Committee on Local Government dated April 29, 1991, stated
in part with respect to the statute's most recent amendment:
"This bill:
"1) Authorizes a subdivider to designate remainder parcels, which cannot be
counted in determining whether a parcel map or final map is required. Prohibits the
payment of fees related to their improvement. Allows the remaining parcels to be
sold, which may be outside the parcel or final map."
4. 94-304
Accordingly, more than one remainder parcel may be designated on a subdivision map if more than
one unit of land is being subdivided. There may be one remainder for each unit subdivided.
Here, however, the problem is not the number of remainder parcels which may be
shown on the map. Rather, it is that the subdivider is a developer creating a "first phase" of a
housing development. The developer's intent is that the three undeveloped portions in the example
given will be subdivided in subsequent phases for the purpose of sale. We conclude that a remainder
may not be designated when the subdivider intends to subdivide it later for the purposes of sale,
lease, or financing.
As previously indicated, a "subdivision" is defined as the division of land "for the
purpose of sale, lease or financing, whether immediate or future. . . ." (§ 66424; emphasis added.)
The proposed remainder parcels in our example will be created by the developer for "future"
division and sale. They would thus be part of the initial subdivision as that term is defined in
section 66424. As stated in the leading text:
"Because a map is not required on conveyance of the remainder parcel, a
subdivider may be tempted to use the parcel to avoid tentative and final map
requirements. If, however, the subdivider intends to sell, lease, or finance the
remainder parcel (either when the other parcels are subdivided or in the future), the
remainder parcel should be considered part of the subdivision and would not qualify
under Govt C § 66424.6." (CEB, supra, § 3.3, p. 47.)
We find support for this conclusion in the case of Pescosolido v. Smith (1983) 142
Cal. App. 3d 964, where a landowner divided his 37-acre parcel into 7 parts, giving 1 part to each of
his 6 children and retaining the 7th. No "sale, lease, or financing" was intended by the landowner
at the time of the division. Nevertheless, the court ruled that the division was subject to the Act's
provisions:
"We conclude that in order to effectuate the purposes of the Subdivision Map
Act, the phrase `For the purpose of sale, . . . whether immediate or future' in the
definition provided by Government Code section 66424 must encompass the ultimate
purpose for which the particular land division is done. In the case of a bona fide gift,
if the gift is of a distinct, independently developable and salable parcel, the ultimate
purpose -- eventual development and sale -- is revealed by the form of ownership
transferred and the intent of the conveyors, a form selected to maximize the market
value and marketability of the land conveyed. The fact that the donor does not
himself intend to sell the land which is the subject of the gift does not change the
ultimate purpose for creating the gift parcel." (Id., at p. 972.)
In reaching its decision, the Pescosolido court relied upon the often cited case of
Pratt v. Adams, supra, 229 Cal. App. 3d 602. In Pratt, 12 landowners owned 46,000 acres in
undivided interests and obtained a court order partitioning their property into 12 parcels. Even
though the division was "approved" in the partition proceedings, it was held that the landowners had
"caused" the division and thus were subject to the Act's provisions:
"The Subdivision Map Act and the ordinances passed in conformity with it
have several salutary purposes, such as: to regulate and control the design and
improvement of subdivisions, with proper consideration for their relation to
adjoining areas [citations]; to require subdividers to install streets [citations]; to
require subdividers to install drains [citations]; to prevent fraud and exploitation
[citations].
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"These purposes would be defeated if the courts were to recognize avoidance
of the statutes by such use of an action in partition as was devised here. . . ." (Id., at
pp. 605-606.)
Based upon the language contained in Pratt and Pescosolido, we believe that it is the
substance of a transaction creating a division of property which must be examined to determine if
the requirements of the Act are applicable. Here, we have a "first phase" of a development. Orderly
community development and protection of the public would be undermined if in the example given
the three undeveloped portions of the property were to be designated as remainders or omitted
entirely from the requisite subdivision map.3
We believe that a remainder parcel is one that is created without the intention to be
further divided or sold by the subdivider. In 62 Ops.Cal.Atty.Gen. 246, supra, we observed:
"A common practice in California is for a landowner to subdivide a portion
of his property, retaining a remainder for his personal residence. For example, an
owner of 25 acres of land might subdivide 20 of the acres into 1 acre parcels, and
retain 5 acres without intending to further subdivide it."
The classic example of a remainder parcel is the family homestead that is handed down from
generation to generation. Of course, at a later time a landowner may change his mind and wish to
sell a remainder parcel. Section 66424.6 provides for such a change of intent. Under subdivision
(d) of the statute, a sale of a remainder parcel may occur without "the filing of a parcel map or final
map, but the local agency may require a certificate of compliance or conditional certificate of
compliance."4
In answer to the question presented, therefore, we conclude that two or more
remainder parcels may not be designated when a developer subdivides portions of more than one
parcel for the first phase of a housing development and intends later to subdivide the undeveloped
portions for subsequent phases of the development. One remainder parcel may result from the
division of each unit of land when creating a subdivision, but no remainder parcels may be
designated or omitted from the requisite map if at the time of the division they are intended to be
divided in the future for the purpose of sale, lease, or financing.
*****
3
A contrary conclusion could allow, for example, a developer to cut in half 20 contiguous 10-acre
parcels and thereafter sell the 20 remainder parcels without surveying them or filing a subdivision
map for them. It cannot be seriously argued that such possible result was the intent of the
Legislature in enacting section 66424.6.
4
A certificate of compliance or a conditional certificate of compliance (§ 66499.35) is issued by
a local agency to indicate that a property complies with the provisions of the Act and the local
ordinances enacted pursuant thereto. (See 74 Ops.Cal.Atty.Gen. 149 (1991).)
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