Earlier this spring, Neil Ripsch walked into the Deschutes County Community Development Department office hoping to iron out a small detail of a years-old home inspection before selling his house. He walked out of the office facing thousands of dollars in fees, and a long and complicated path to proving that his 14-year-old home exists on a legal lot before he will be able to sell it.

“I think we’re treating a lot of people wrongly in the county,” Ripsch said during a Deschutes County Commission meeting.

Ripsch, who lives on Gribbling Road to the east of Bend’s urban growth boundary, is one of possibly hundreds of Deschutes County property owners who may be subject to higher costs and a convoluted approval process that stemmed from a state land use decision that called into question Deschutes County’s approach to providing building permits.

“We’ve lost a critical tool in our toolbox for issuing building permits,” said Peter Gutowsky, Deschutes County planning manager.

It started in 2015, when a Deschutes County resident appealed a county decision to adjust the boundaries of a neighboring property. The appeal to the Oregon Land Use Board of Appeals — Grimstad v. Deschutes County — resulted in a ruling that said building permits issued by the county did not automatically establish legal lots. The board returned the case back to the county for further review.

Gutowsky said the decision upends decades of county policy and creates a chain reaction that makes it more difficult for property owners to build new structures, make changes to existing ones, or sell a property.

“This particular decision, and the way the county is handling it, seems pretty funky,” Ripsch said.

In the 1970s, Deschutes County approved ordinances that changed the way individual residential properties can be established in rural parts of the county. Gutowsky said rules can vary, but in general, lots that have been created since 1977 by means other than breaking up larger pieces of property or as part of a larger subdivision, may not be considered legal lots of record under Oregon law.

Gutowsky described legal lots of record as properties that Deschutes County has deemed suitable for development, and are slightly different from tax lots. For decades, Deschutes County’s internal policy was to issue most residential building permits administratively based on a previously approved building or septic permit, with the belief that the subject properties were legal lots.

However, Gutowsky said the decision by the Oregon Land Use Board of Appeals now forces property owners to prove their lot is legal before they receive a permit, which can be a challenge for some property owners.

“We were too liberal in our recognition of legal lot of record,” Gutowsky said.

Gutowsky said it was almost impossible to tell how many homeowners might be in this situation but speculated that it might be “several hundred.” He said the county has received more than 75 requests for verification already.

The county provided notice to real estate brokers earlier this year, but individual residents were largely caught unaware until they visited the community development department for another reason. Some residents, like Ripsch, visited the department for something entirely different, only to find themselves trapped in a long, expensive process.

“It’s terrible to suddenly walk in and be victimized by this,” he said.

The process for proving a legal lot of record varies in complexity, but it often requires a large fee, at the very least. Gutowsky said the fee to file a mandatory land use application is $925, even if a property owner can verify that his or her property was established legally.

Gutowsky said the fee reflects the average cost to the county from reviewing deeds and providing public notice to the neighbors. While he acknowledged the financial challenge that the fee places on residents who followed the rules to the best of their knowledge, Gutowsky said the community development department had no way of lifting the fee at this time.

“We’re a fee-dependent department,” he said.

For property owners like Ripsch, who can’t prove their lot met the requirements, the process gets more challenging and requires the owner to hire a surveyor, and receive various documents from different Deschutes County departments. Ripsch said he expects the process to cost him around $3,000, including the fees imposed by the county.

“I did everything right, now I have to duplicate efforts at my expense,” he said.

Additionally, the requirement creates an extra layer of complexity for both homebuyers and sellers. Patty Dempsey, a broker with Windermere Central Oregon Real Estate, said one of her clients had run into problems proving her lot was legal while trying to sell her home. The buyer paid the $925 application fee, but the additional steps in the process are making it difficult for her to sell the house. Dempsey added that some home lenders in Central Oregon are reluctant to lend to buyers in rural parts until the situation gets resolved.

“It’s a little stressful for our seller, because she isn’t sure if she has a deal in place or not,” she said.

Dempsey added that it can take 10 weeks or more for a verification request to be processed.

With Grimstad v. Deschutes County still unsettled and under review, county leaders have prioritized finding a workaround. Gutowsky said the community development department is open to drafting a code amendment that would give the department more flexibility while complying with the land use board’s decision. He added that the department might consider a tiered fee structure to avoid saddling small property owners with inordinate costs.

“People are rightly frustrated about this,” he said.

County Commissioner Phil Henderson added that he expects the county to develop a workaround within the next few weeks.

“It really is a hardship financially and timewise,” Henderson said.

— Reporter: 541-617-7818, 
shamway@bendbulletin.com