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Wisconsin REALTORS® Are A Legal Resource For Property Owners

By HOM Editor
July 2017

Wisconsin Capitol

Murr v. State of Wisconsin

Wisconsin residents who find themselves at the mercy of changing property laws may not realize they can find support at their state REALTOR® offices. In 1978, the Wisconsin REALTORS® Association (WRA) set up a Legal Action Program in order to advocate for residents on land use and property rights issues. The program is funded entirely by local REALTORS® who contribute a portion of their annual dues to the Legal Action Fund.

The Legal Action Program typically intervenes in property related cases in several ways; they can act as an “amicus curiae” or “friend of the court”, be a party to a lawsuit, identify expert witnesses, provide relevant research or act as a member of a coalition. In short, while the Legal Action Fund does not pay legal fees, they will use a wide variety of available resources to help Wisconsin property owners to resolve their legal dispute.

An ongoing example of the program’s work is the case of Murr v. Wisconsin. The Murr family purchased their land in 1960 and in 1963 they bought an adjacent lot thinking it would be a good investment for future generations. However, in 1973 the state of Wisconsin passed a law that changed all of that.

Under the law, St. Croix County adopted a new ordinance stating that any property that failed to meet a minimum lot size would be considered “substandard” and not developable. There was a grandfather clause built in that would allow owners of individual lots to develop or sell the lots. However, if someone, like the Murrs, owned two or more substandard adjacent lots, the ordinance required the lots to be consolidated. Therefore, if the Murrs wanted to build another home on their adjacent property or sell the second lot to a developer they were out of luck.

According to the ordinance, the only way the Murrs could capitalize on their 1963 investment would be to merge their lots and forfeited the profit they could have earned had they been able to sell or develop the second lot independently.

The Murrs sought legal recourse without much success. The circuit court rejected the Murr’s claim and upheld the county’s ordinance. Their appeal was not only denied but the process created new property laws that would have an enormous statewide impact. During the Murr’s hearing, the Wisconsin Court of Appeals ruled that moving forward, a parcel of property had to be combined with any adjacent parcels owned by the same person when evaluating the impact of the regulation on the parcel for regulatory takings purposes.

In plain speak, the Murrs were forced to combine their lots because the second lot was too small (or “substandard”). But after this new ruling, size no longer mattered. Any two adjacent properties owned by the same person are now required to be consolidated if the property owner wishes to contest existing regulations – regardless of size. Quite a deterrent for property owners who might wish to challenge existing regulations.

The Murrs didn’t give up and tried to take the case to the Wisconsin Supreme Court, which subsequently rejected their appeal.

Because of the potential impact the Murrs case had on property rights for all Wisconsin landowners the WRA stepped in. Through its Legal Action Program the WRA filed an amicus (“friend of the court”) brief with the United States Supreme Court.

The WRA’s brief asked the court to invalidate the court of appeals’ rule, highlighting, among other things, the rule’s inconsistency with Supreme Court precedent and numerous Wisconsin laws that protect the rights of property owners and treat each individual lot as property.

On June 23, 2017, the U.S. Supreme Court upheld the Wisconsin Court of Appeals’ ruling and rejected the Murrs’ regulatory takings argument.

The WRA’s Legal Action Program continues to support the Murrs, but more importantly they are working to prevent the state of Wisconsin from redefining property laws in a way that will hurt landowner’s ability to control how the status of their property.

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