In 1997, code compliance officers with the Santa Cruz County Planning Department came to Hillary Falconer’s Soquel horse ranch and issued red tag notices for her stables, swimming pool, an adobe structure that her father had built in the 1960s, a compost bin and more—72 items in all—for being in violation of county building or zoning codes. Falconer, who owns and runs Briarcliff Farms on Old San Jose Road, contested all of them in court for three years. “Basically, they went through and said everything in this property was illegal,” says Falconer. “Everything.”
Those tags made it almost impossible for Falconer and her now late husband to sell their ranch, because red tags, which are attached to property titles, restrict a property owner’s ability to apply for loans or refinance. “If you have a red tag on your property, you have basically shot your ability of getting a loan,” says Rose Marie McNair, president of the Pajaro Valley Association of Realtors. “If you try to sell the property, you can’t.”
Today, whether or not Falconer’s violations had any merit is less of an issue than the county’s red tag process. The Sixth District Appellate Court ruled in April that the planning department has been violating state law for over 12 years by recording red tags on people’s property titles without a court order or hearing. Now homeowners who received tags can have them expunged from their property titles. That frees up their ability to refinance and apply for loans.
Kevin Fitzpatrick of the Santa Cruz Planning Department says for years inspectors thought they were simply following a county ordinance that allowed the practice and never thought the county was violating state law. The county practice had been held up by different cases in lower courts.
Just how many people were affected by the latest ruling is difficult to say. Part-time land-use consultant David Smith has helped clients have the tags removed (although homeowners can complete the form without an expert). Although only 34 property owners have taken the county up on its offer of red tag expungement, Smith estimates the number of those eligible could be around 4,000. The county doesn’t have any estimates, but Fitzpatrick calls that figure a possibility. “I have no idea,” he says. “I really don’t.”
Smith says his clients were shocked when he told them their red tags would disappear from their property titles. “They were anywhere from surprised to incredulous. They can’t believe it’s gonna happen,” says Smith.
Typically, once a red tag was posted, owners had 90 days to start to correct the violation without incurring civil penalties, but they could still be billed at $170 for the time compliance investigators spent on the case.
Michael Bethke served as chairman for the short-lived Building, Accessibility and Fire Code Appeals Board, which handled complaints filed against planning investigators and which the county Board of Supervisors dismantled after three meetings. Bethke says many of the violations were against honest people trying to do the right thing. “Most of them want to do the right thing, if they’re your average Joe Citizen, and maybe they did something that they didn’t even know you need a building permit for,” says Bethke, currently Santa Cruz County fairgrounds manager. “I’ve encountered a lot of people like that—mostly elderly folks, and they add on a car port or something.”
The Santa Cruz County Planning Department posted a request for expungement form on its website in June, and each request has been granted. Fitzpatrick says he doesn’t know why only 34 people have applied to have them removed.
Falconer says it comes too late. “It’s almost like who cares after you’ve lived with them for 14 years,” says Falconer, who once thought she was going to die with all 72 red tags on her property title. She wishes the court ruling had come 10 years ago, when she was trying to sell the horse ranch prior to the housing bubble burst. “Who’s going to buy it?” says Falconer. “Nobody’s looking for an estate right now.” Many of Falconer’s violations were for not having proper permits, a claim she disputed in court.
Fitzpatrick says buyers should be aware if there is a violation on a property. “She’s trying to sell something on her property that’s illegal. What difference does it make?” he says. He adds that red tags were placed on people’s properties in order to let the homebuyers know there was a violation.
Bethke says if violations are serious, inspectors should follow up and make sure homeowners solve the problems instead of waiting for them to sell or refinance. “What good is just recording a red tag going to do and then forgetting about it?” asks Bethke.
