Anti-piecemealing language in the ordinance ate my four-lots-a-year plan

Question

36 acres, county ordinance exempts a division of four or fewer lots from the major subdivision requirements, meaning no engineered road to county standard, no stormwater plan, no performance bond. My plan was obvious: four lots now, sit two years, four more, and so on. Then I read section 4 of the same ordinance. It aggregates all divisions from the same parent tract over a rolling five year period and it follows the tract, not the owner, so a resale doesn't reset the clock. The major plat path adds what I estimate at $95k to $130k on this parcel, mostly the road built to county spec plus engineering, on a tract I can buy around $185k. Twelve lots at $34k retail is $408k gross, so the major plat still pencils on paper, it just triples the capital I need in the ground before the first closing. Is there a version of this that works, or does the aggregation clause simply mean the four-lot exemption is only ever for one-time sellers?

Rena Expert · Accepted Answer

Parent tract aggregation with a lookback is exactly what it's designed to do, which is stop serial minor splits from producing a subdivision without the infrastructure a subdivision would have required. Whether your specific ordinance reaches your specific facts is a land use attorney question, and the answer varies not just by state but by county, so get a written opinion before you underwrite either path.

On the structure: the exemption isn't useless, it's just worth exactly four lots on that parent tract, once. The question is whether four lots at $34k, sold with minimal improvement cost, clears enough over your $185k basis to be a deal on its own. If four lots is $136k gross on a $185k buy, it isn't, and you've spent the exemption on the least valuable lots you own.

The number I'd push on is the $95k to $130k road estimate. That range is too wide to underwrite. Get a civil engineer to give you a rough grading and section takeoff before you're hard on the contract, because the drivers are cut and fill volume, the culvert and drainage structures, and whether the county requires a paved surface or accepts chip seal or gravel on a low-volume road. I've seen the paved-versus-gravel line item alone move a number like yours by 60 percent.

The risk you haven't raised is phasing under a major plat. Most ordinances let you record a master plat and build improvements in phases with a separate bond per phase, which would let you build road for lots 1 through 6 and defer the rest. That changes your peak capital requirement more than anything else in your model. It also means the bond, typically 100 to 125 percent of remaining improvement cost, has to be posted by someone, and a bonding company will want financials or cash collateral. Find out what your county accepts as security before you assume phasing solves the capital problem.

aliyah_b · Answer

The bond is the part I never see in anybody's spreadsheet. When I called around, a surety wanted collateral roughly equal to the face amount unless you have a balance sheet, which for a first-timer means it's just cash sitting still for however long the county takes to accept the improvements. Ember, does your county release the bond at acceptance or hold a maintenance bond after?

Anti-piecemealing language in the ordinance ate my four-lots-a-year plan

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