The Wisconsin Supreme Court recently accepted several cases that will be important to REALTORS® and the real estate industry in Wisconsin. While the high court will likely hear other cases of interest to the real estate community, the ones on the docket for early fall include issues dealing with shoreland zoning, eminent domain and property tax assessments.
Below is a brief summary of the important real estate cases to be heard by the Supreme Court this fall.
Shoreland zoning
Anderson v. Town of Newbold
Facts: Anderson owns a lot in the town of Newbold. The lot has approximately 358 feet of shoreland frontage on Lake Mildred. In 2016, Anderson submitted a proposed certified survey map to the town, which detailed dividing the lot into two lots with widths of 195 and 163 feet, respectively. The town board rejected Anderson’s proposed land division because it did not comply with the town’s subdivision ordinance, which requires a minimum lot width of 225 feet at the ordinary high water mark on Lake Mildred.
Issue: Whether a town has the authority, under Wis. Stat. § 236.45, to regulate lot sizes in shoreland areas through its subdivision regulations, despite the fact that the legislature has prohibited towns from enacting shoreland zoning regulations.
Why this case is important to REALTORS®: Allowing towns to regulate development density in shoreland areas through their land division authority would be in direct conflict with the legislature’s enactments that include (a) prohibiting towns from engaging in shoreland zoning, and (b) establishing uniform lot size requirements in unincorporated shoreland areas. Moreover, this case could open the flood gates to towns and counties ignoring the lot-size requirements in shoreland zoning, establishing their own lot size requirements in shoreland areas through their subdivision regulations.
Assessment of contaminated property
Collison v. City of Milwaukee Board of Review
Facts: Collison owns a vacant lot in the city of Milwaukee, which the city valued at $31,800 for property tax purposes. The lot previously contained leaking underground storage tanks that were removed in 2012. Soil samples revealed soil contamination, but no Phase II environmental study has been performed. The property is listed on the city of Milwaukee’s “do not acquire” list
of contaminated properties.
Collison appealed the property tax valuation, arguing the property’s value is zero dollars due to the environmental contamination. Because there were no recent comparable sales, the city assessor used the income approach to determine fair market value because the property had been previously used as a parking lot and, whether contaminated or not, could still generate income as a parking lot. Collison argued that the City of Milwaukee Environmental Contamination Standards (CMECS) are in direct conflict with Wis. Stat. § 70.32(1m), which requires assessors to consider impairment to value from environmental pollution. CMECS prohibits assessors from valuing property as contaminated unless a Phase II study has been conducted.
Issues: The issues in this case are (1) Whether CMECS conforms to Wis. Stat. § 70.32(1m), and (2) whether the assessor considered the impairment of the property’s market value due to contamination, as required by Wis. Stat. § 70.32(1m).
Why this case is important to REALTORS®: The CMECS standard of considering environmental contamination only if a Phase II environmental study, which costs between $5,000 and $8,500, is performed seems to be an unreasonably high and expensive bar for a property owner to clear in order to have a fair and accurate assessment.
Eminent domain jurisdictional offer not supported by appraisal
Christus Lutheran Church v. Wisconsin Department of Transportation
Facts: In October 2016, the Wisconsin Department of Transportation (DOT) notified the landowner, Christus Lutheran Church, by letter that stated the DOT would require 5.87 acres of the church’s land to expand State Trunk Highway 15 as well as temporary easement rights over another 0.198 acres. The DOT first offered approximately $134,000 to purchase the property, based upon an appraisal, but the church declined to sell. The DOT determined the acquisition was more complex because of additional impacts to the church’s pond, parking lot, signs and landscaping as well as severance damages relating to the church’s building. The DOT then sent a revised offer of $403,200. The church declined. The DOT then proceeded with eminent domain and made a jurisdictional offer of $403,200. The DOT offer was approximately $270,000 more than the property value stated in an appraisal submitted by the DOT in support of the offer. The church did not respond, and the property was conveyed.
Christus Lutheran sued, alleging the DOT failed to provide an appraisal supporting the $403,200 jurisdictional offer in violation of Wis. Stat. § 32.05(2)(b) and (3)(e), making the offer void and thus prohibiting the DOT from acquiring any interest in the property. Under Wis. Stat. § 32.05(2)(b), if the negotiation process fails between a landowner and the DOT, the DOT may initiate a jurisdictional offer with an appraisal that must be “a full narrative appraisal upon which the jurisdictional offer is based.” The court of appeals held the jurisdictional offer was not sufficiently based on the appraisal.
Issue: Whether a jurisdictional offer in the eminent domain process is valid when the offer is not supported by the appraisal.
Why this case is important to REALTORS®: The condemnation process must allow property owners to understand the value of the land when a jurisdictional offer is presented. In most cases of condemnation, the government has the greater advantage. The appraisal is the one tool that allows the landowner to understand the property market value during the negotiations and is intended to prevent the government from offering landowners lowball prices.
WRA Legal Action Program
The WRA, through its Legal Action program, will be participating in each of these cases by filing an amicus curiae, or “friend of the court” brief. Amicus briefs allow organizations that are not actual parties to the case but have an interest in the outcome to raise legal arguments or discuss broader implications of a particular decision by a court. The Legal Action program is one of the WRA’s most important advocacy tools to protect property rights, maintain housing affordability, and ensure that real estate transactions continue to operate smoothly.
For updates on these and other cases, watch for future updates in the WRA Legal News weekly email, an email of important legal news affecting REALTORS® and their business.
Tom Larson is Senior Vice President of Legal and Public Affairs for the WRA.