Abuse of family transfers drew countywide attention and controversy in early 2006, but produced no popular solutions. Two years later the abuse is still rampant, but the county is no closer to preventing it.
The family transfer exemption allows landowners to split part of their property into lots for members of their immediate family without going through a subdivision review. Used properly, it’s a way for parents to give or sell part of their property to their children, but when abused, it can also serve as a way to evade subdivision regulations and create lots without any attention to public health and safety issues.
Last year, 239 lots – roughly one-sixth of all new lots in the county – were created through family transfers, according to a report issued by the county planning department last week. Of those, 86 were sold to non-family members within the year.
“We see those sales as indicators of abuse,” Jeff Harris, director of the county planning department, said. “Some of those are certainly for legitimate reasons, but with 36 percent of them being flipped and sold right away that’s a definite sign of evasion.”
County records indicate almost half of the 1,715 family transfer lots created over the past eight years have been sold to non-family members within a year.
The results are often chaotic: By side-stepping the planning process, important issues like water quality, access, traffic and neighborhood impact aren’t addressed, Harris said. Neighbors are left unhappy because there’s sudden development nearby without public comment. Buyers purchase property only to find they can’t get a well permit or don’t have legal access rights to their new land. Roads aren’t wide enough for emergency vehicles. Homes are built on steep slopes or in the floodplain and traffic increases on already dusty roads.
In the Truman Creek drainage area, south of Kila, resident Jeff Hutten has mapped family transfers as they’ve “significantly changed the character” of his neighborhood. Since 1993, family transfers have created 57 parcels there; many of them were sold and developed immediately.
The difficulty, county officials say, is that it’s hard to know when someone is requesting a family transfer for legitimate reasons, and when they simply want to sell them. Requests for family transfers come before the county’s 509 board – which handles land-use decisions that don’t fall to the planning board – but include little information on the owner or their plans.
“The only way for us to really catch abuse is to look for a pattern of recent development or a history of family transfers on the property,” Andrew Hagemeier, a county planner and member of the board, said. “You have to have some proof they’re lying to deny it, and we don’t have the time to look up records of each family’s children.”
Others have been denied when a “For Sale” sign is already up on the property when they apply for the family transfer, or when they show up before the 509 board after recently trying to submit a subdivision plan to the planning office. Even then, any applicant denied by the board can appeal to the Flathead County Commission, leaving commissioners to decipher between who’s being honest and who’s not.
“It comes down to us trying to determine intent, trying to find out who’s lying, and good luck with that,” Commissioner Joe Brenneman said.
The problem came to a head in 2006 when a proposed plan to address the apparent abuse drew more than 250 people to a meeting at the fairgrounds. Commissioners were considering requiring a three-year waiting period before lots created by family transfers could be sold. The proposal included an allowance for exceptional circumstances, where a family suffering from financial hardship could ask commissioners to waive the waiting period.
Opposition was strong as citizens raised concerns about invasion of privacy and lost property rights. Commissioners never took final action on the proposal, and say now they aren’t interested in reviving it.
All three commissioners expressed support for family transfers when used as intended and frustration with citizens who continue to abuse the exemption. They say they’ve become more aggressive in their questioning, not hesitating to ask point blank if landowners are planning to sell immediately. But, dealing with family transfers isn’t a top priority and commissioners haven’t heard a solution they’re comfortable supporting.
“The numbers Jeff gave us are alarming and I think everyone realizes it’s an issue, but we’re not discussing it specifically right now,” chairman Gary Hall said.