Last week we wrote about a United States Supreme Court case Murr v. Wisconsin and its impact locally. Since that post, the Petitioner, Donna Murr, contacted the author to provide us with an update to her family’s situation.

After the Supreme Court decision in June, legislation was introduced in both the Wisconsin State Senate and the Wisconsin State Assembly. This legislation – among other things – sought to prohibit a state, county, town or village agency from merging a substandard lot with another lot without the consent of the affected property owner.

We are pleased to report that the Wisconsin State Assembly and Senate both passed the legislation in early November, and on November 27, 2017 Governor Scott Walker – with Donna Murr by his side – signed the bill into law. As a result, the Murr’s lots can be developed separately. As Ms. Murr noted in her email “We spent 10 years in the courts and 4 months in the Wisconsin legislature! Crazy right?”

On another note, Aram Terchunian of First Costal Corporation contacted the author and provided a note of caution. Mr. Terchurian rightly pointed out that Tidal Wetlands – Land Use Regulations contains an automatic merger provision for substandard lots. Indeed, at 6 CRR-NY 661.6 (b) the regulation addresses lots within the wetland jurisdiction that are substandard. Under §661.6 (a)(5) the minimum lot area for lots connected to a community sewage system is 20,000 square feet, and 40,000 square feet is required for lots not connected to a community sewage system. According to the Regulations, substandard lots as defined above “in the same ownership may be treated together as one lot”.

So know that while a property might not merge because of zoning regulations, it may merge because of wetland regulations.

Thank you to both Donna and Aram for their contributions to this blog.

The stakes could not be higher; would the property yield one or two waterfront building lots? On June 23, 2017, the Supreme Court of the United States decided a case that involved the merger of two parcels of property undersized for development purposes that had come into common ownership. In Murr v. Wisconsin, the Murr family who owned the property appealed a Wisconsin Court of Appeals case that upheld the merger of the lots and denied the Murr’s takings complaint. Ultimately, the decision by the Supreme Court upheld the Wisconsin Court of Appeals decision that the lots had merged and must be one lot for development purposes.

At issue were two waterfront parcels of property on the St. Croix River in the Town of Troy, County of St. Croix in the State of Wisconsin. Initially, the Murr’s parents purchased a parcel of property and constructed a cabin for recreational purposes for their family. Title to the property was taken in the name of the family business, William Murr Plumbing, Inc. Three years later, Mr. and Mrs. Murr purchased the adjoining lot as an investment. The lot was titled in the Murrs’ personal names and remained vacant.

Fast forward to 1994 when the Murr parents gifted the property with the cabin to their six children. One year later the Murr parents gifted the vacant lot to their six children. Two of the Murr children transferred their interests in the property to the four remaining siblings who are the Petitioners.

Meanwhile, in 1976, the State of Wisconsin through the Wisconsin Department of Natural Resources was busy developing regulations concerning the development of lots within the St. Croix River area. These regulations provided minimum lot size and area requirements within those lots after considering wetlands, rights-of-way, slopes, and floodplains. Acknowledging the takings issue, the Department included a “grandfather” clause that exempted lots from regulations if they were held in single and separate ownership. Wisconsin law then went a step further and determined that lots that did not meet the zoning requirements and were not single and separate merged by operation of law and resulted in a single building lot.

By transferring the property in 1994 to their children, the Murrs – at least under Wisconsin Law – stripped a vacant lot of its development rights and effectively merged the properties. To their dismay, the Murr children could not separately sell the property; the proceeds of which they intended to use to improve the cabin.


Upon learning of this possible merger the Murr children applied to the St. Croix County Board of Adjustment (“Board”). This application requested – among others – a variance to “sell or use two contiguous lots in common ownership as separate building sites”. After a public hearing, the Board denied the application in a written opinion.

Thereafter the Murrs appealed the Board’s decision to the Wisconsin Circuit Court. The Wisconsin Circuit Court upheld the Board’s decision to deny the request to treat the lots as single and separate but reversed the Board on the individual variance requests. Both parties appealed to the Wisconsin Supreme Court.

In upholding the Circuit Court, the Court of Appeals rejected the fairness argument advanced by the Murrs.  Instead, the Court of Appeals adopted the State of Wisconsin’s argument that grandfathering clauses protected individuals with substandard lots from losing development rights but also protected the environment by merging contiguous properties that come into common ownership.

The Wisconsin Court of Appeals denied a Petition to Review.

After failing in their appeal of the denial of the variance requests the Murrs commenced an action alleging a taking of their property without just compensation.

State Takings Claim

Both Wisconsin State and St. Croix County law is consistent in that substandard abutting lots merge unless they are in separate ownership. Thus, the Murrs’ claim was based upon the theory that the State of Wisconsin and County of St. Croix had committed a regulatory taking when it adopted the law that specifically called for the merger of commonly owned undersized, contiguous property.

Relative to takings claims, Wisconsin law provides that “the property of no person shall be taken for public use without just compensation”. Specifically, the Murrs’asserted that applying Wisconsin law had deprived them of the beneficial use of Lot “E” – the unimproved lot. Because of the merger, the Murrs argued that Lot E was deprived of all beneficial use and all economic value.

In granting the summary judgment application of Wisconsin and St. Croix County, the Wisconsin Circuit Court found that the Murrs had retained a recreational and residential use of the property. Based on a professional appraisal, the court further concluded that the market value of the property had decreased less than 10%.

The Wisconsin Court of Appeals upheld the Circuit Court finding that Lots E and F must be considered as one lot because of the merger and no compensable taking had occurred.

Appeal to the Supreme Court

The Murr’s appealed the Decision to the Supreme Court.

Since 1922 the Supreme Court recognized that a compensable taking can occur where government regulation is so burdensome that it deprives a property owner of all beneficial or productive use of the property.  See Pennsylvania Coal Co. v. Mahon, 260 U.S. 393 (1922).  In Murr, the issue raised on appeal was whether the Supreme Court should consider the Murr lots as merged or as single and separate lots. In other words should the Wisconsin Department of Natural Resources and St Croix County regulations dictating an automatic merger of substandard contiguous lots held in common ownership be upheld?

By upholding the Wisconsin Court of Appeals, the Supreme Court acknowledged that validity of the merger provision. The Court relied on three factors to uphold the merger provision… First, the Court found that the Wisconsin merger provision was adopted for a specific, legitimate purpose; to protect environmentally sensitive property. Second, the Court found that the Murrs should have expected heightened regulation because of the properties location in an environmentally sensitive area as well as the fact the properties shared a long contiguous border. Finally, the Court observed a lack of financial impact demonstrated by the fact that the property as combined retained 90% of its value.

In the Town of Southampton, the Murr decision should have little impact. Contrary to Wisconsin and St. Croix County, the Southampton Town Zoning Code has no automatic merger provision for substandard contiguous lots held in common ownership. Rather, the Code states that a substandard property is entitled to a building permit if it can demonstrate that it is single and separate from surrounding lots. Single and separate status can be proven through a title company analysis of surrounding lots or a determination of the Zoning Board of Appeals.

Local Application

If a substandard lot is held in common ownership and contiguous, an application can be made to the Zoning Board in Southampton to determine if the lot is entitled to single and separate status. In an application for a determination of single and separate status, the Board will undertake an analysis to decide whether the lots maintained separate identities or if one lot was held to benefit another. Through a series of decisions, the Board has developed a test to analyze single and separate applications on a case by case basis.

For other jurisdictions, a property owner must look closely at the zoning law to determine how that jurisdiction treats substandard contiguous lots held in common ownership. Keen vigilance in this area of law is the only way to avoid the fate of the Murrs and lose the right to develop a waterfront lot.

Measuring the height of a structure may seem straightforward in the abstract, but sometimes in practice that is not the case. Take, for instance, a recent Southampton Town Zoning Board application – Matter of the Application of Hermann – where the height of a house was the subject of a challenge in front of the Zoning Board.

During construction of a residential dwelling, several stop work orders were issued and lifted based upon evidence submitted to the Building Inspector from different surveyors attempting to determine the height of the single family dwelling. Mostly the argument surrounded an interpretation of the term “average natural grade”, which is the point of measurement on the ground in Southampton. This case was complicated by two factors. First, the property was disturbed from the construction of a prior dwelling demolished to make way for the new dwelling. During the demolition the grade was lowered to accommodate a larger basement. Second, there was a ten foot change in slope from one side of the house to the other.


Southampton Town Zoning Code provides specific guidance for measuring the height of a structure in §330-5 “Definitions” which defines “Height of a Structure”. Section B of that definition states:

“In all other cases, the vertical distance measured from the average natural elevation of the existing natural grade (before any fill has been or is proposed to be placed thereon) as established on a plan prepared by a licensed professional surveyor, at and along the side of the building or structure fronting on the nearest street to the highest point of the highest roof or, in the case of a structure, to the highest point. On all flag lots and lots utilizing a right-of-way, the flagpole access or right-of-way shall be considered the street front.” (Emphasis added)

So, the challenge to the property owner was twofold:

  1. Determine a reasonable methodology to establish “average natural grade” on a previously disturbed lot; and
  2. Apply that methodology to a property that contained a significant slope.


Fortunately, the Zoning Board had decided two previous cases involving height variances that centered on determining average natural grade. In the Matter of the Application of Schwartz, the Board initially observed that determining the average natural grade of a parcel of property was an inexact science. Next, the Board determined that using spot elevation data and the Topographic Map of the Five Eastern Towns was a reasonable methodology in determining average natural grade. Finally, the Board determined that a single measurement or data point along a building line was insufficient and that at least two data points must be used to determine average natural grade which would then be the basis on which to measure height.

Approximately a year and a half later, the Zoning Board decided a similar application, the Matter of the Application of Rubin. In Rubin, the Board followed Schwartz by making these findings:

  • Measuring contours and topography is an inexact science.
  • Site specific topographical data is the most accurate piece of information necessary to determine average natural grade.
  • Interpolation of data derived from survey maps and site-specific topographical data is a reasonable way to determine grade issues.


Applying the findings in Schwartz and Rubin, site-specific elevation data combined with the most recent contour mapping available will allow a licensed surveyor to determine contour lines and use these contour lines to determine height.


The property owner in Hermann engaged a surveyor who used the following data to determine average natural grade:

  • 1956 Topographical Map prepared by the U.S. Coast Guard
  • 1973 Photographs of Original Foundation under Construction
  • 1974 Five Eastern Towns Topographical Map
  • Actual field data
  • 2007 LiDAR Contour Map
  • 2012 LiDAR Contour Map
  • Field Observation of Surrounding Topography of adjacent lot
  • 2015 Under Construction Photographs of the Current Foundation
  • Actual Height Measurement

Using that information, the surveyor made a determination that the house exceeded the permitted height, and the property owner had to obtain a variance. The request for relief was significantly less than that alleged by the neighbor, and the variance request was ultimately granted. In the Hermann decision, the Board found that the methodology used by the property owner’s surveyor to be the most meaningful and likely accurate because it incorporated the above data.


To determine the height of a building – at least in Southampton – a surveyor must consider all of the data available, especially when the property is already disturbed. It is also suggested that a property owner or surveyor provide the Building Inspector with the methodology used to determine average natural grade in advance of construction, so violations of height restriction are avoided.

voidable-contractsAlso known as negative easements, restrictive covenants can wreak havoc on the ability to develop property. Recently, in our real estate practice at Farrell Fritz, we have seen two alarming examples.

In both cases, the restrictive covenant combined with applying municipal zoning requirements precluded the development of the property. Fortunately, we had inserted language into the contracts that allowed the client to cancel the contract with no negative financial consequences.

Restrictive Covenants and Land Use Regulations

One such instance involved a waterfront parcel on Shinnecock Bay in the Town of Southampton. This property was subject to the Town’s wetland law, which regulates the setback of structures in relation to the location of the wetlands on site. Through a title search, we found out that the property was also burdened by a private covenant that also restricted the location of structures.

This covenant contained specific language which required that a structure constructed on the site be setback at least 85 feet from the street. From the opposite side of the property, the Town’s wetland regulations required that a principal structure be at least 125 feet from the wetlands.

Applying both the wetland setback and covenant setback resulted in a negative building envelope.

Since this covenant was included as part of the subdivision process, all 26 owners of lots in the subdivision had to sign off on a waiver of the covenant requirements.

Another similar circumstance occurred where a covenant in a deed for a lakefront property required that any structure constructed on the premises be situated 60 feet from the street. This property was also subject to the same 125-foot wetland setback as the previous example. Again, application of both setbacks rendered the lot unbuildable.

In this instance, the covenant was unusual. It only benefitted the sellers of the lot, who also owned other properties in the area. The sellers specifically retained the right to modify the restrictions imposed by the covenant.

If applied to their fullest extent, both restrictions result in a lot that cannot be developed.

Relief From Restrictive Covenants

Obviously, a property owner could apply for relief to the municipal agency having authority over wetland regulations. However, these municipal boards are under increasing pressure to preserve wetlands which protect water bodies, so relief from these restrictions is difficult to obtain. Extinguishment of the covenant is the only other option. There are three ways to extinguish a covenant:  (1) an agreement between the interested parties to the covenants; (2) a merger of ownership or (3) a final decision by a court of law.

All three paths are challenging.

To obtain an agreement to extinguish the covenant in my first example would require consent from the other 25 property owners in the subdivision.

Because of the vague nature of the language that created the covenant in the lakefront example, extinguishment involves a difficult title challenge. There, a prospective developer must research title ownership of the nearby properties to determine those owned by the persons that created the covenant. After that research, a perspective purchaser must then obtain an agreement of all current property owners in the chain of title of the affected properties to amend the covenant.

Second, to merge ownership would require the purchase of the properties that benefit from the covenant. A purchase of the necessary lots in both examples above would be cost prohibitive.

Finally, a party looking to extinguish a covenant can commence a litigation under §1500 of the Real Property Actions and Proceedings Law. There are too many causes of action under §1500 to list here; but extinguishing a well written covenant through the court system would be a difficult, time consuming, and expensive task.

The obvious advice here is to authorize a title company to provide any covenants and easements that could affect the development of a property under consideration for purchase prior to entering into contract of sale.

The orientation of a tennis court in a north/south direction is a benefit to competitive players interested in fair tennis play. Even the Appellate Division, Second Department, agrees.

To avoid the impact of sun glare, a Town of Southampton property owner sought several variances to construct a tennis court in a north/south direction. One of the variances requested a 17-foot setback from the street where 90 feet is required.  (Southampton Town Code, Section 330-11.)   This variance would allow the tennis court to be situated in a north/south direction and thus avoid the impact of sun glare that would occur if situated in an east/west direction.

StockSnap_8ODE0WIMD9A neighboring property owner, located across the street, appeared at the public hearing and opposed the requested variances.  In reaching its 2014 determination to grant the variance application, the Southampton Board of Zoning Appeals found that the proposed tennis court was located 158 feet away from the opposing neighbor’s house and therefore would not create a detriment to the property owner or the surrounding neighborhood.

The Board also relied upon no less than eight (8) mitigating factors, including:

  • Proposed landscape screening;
  • Sinking the court into the ground by four feet, thereby mitigating potential noise impacts;
  • The alternative of constructing a 9,000 square foot house was far more impactful;
  • The goal of distancing the court from the immediately contiguous neighbors was more important than any perceived impact to the opposing neighbor located across the street.

Unhappy with the Zoning Board’s determination, the opposing neighbor commenced an Article 78 proceeding in addition to seeking a TRO and preliminary injunctive relief.  After considering the arguments, by Decision and Order dated May 19, 2014, the trial court (J. Garguilo) upheld the Zoning Board’s decision, while at the same time vacating the TRO and denying petitioner’s request for preliminary injunctive relief.   Petitioner’s attempt to appeal the denial of injunctive relief was dismissed by the Appellate Division as the Second Department held that “appeal from the intermediate order in this proceeding must be dismissed because the right of direct appeal therefrom terminated with the entry of a judgment dated November 10, 2014.”  Id.

By further decision of even date, the Appellate Division upheld the Zoning Board determination, finding not only  “there was no evidence that the granting of the variance would produce an undesirable change in the character of the neighborhood, have an adverse effect on physical and environmental conditions, or otherwise result in a detriment to the health, safety, and welfare of the neighborhood or community . . . [but also] the Zoning Board rationally concluded that the benefit sought by [the applicant}, namely, to maximize its use of the proposed tennis court, could not be achieved by the alternative site proposed by the petitioner.”  Id.

The Appellate Division made the above determinations despite the fact that it found that the variances requested by the property owner were substantial in nature and that the difficulty was self-created. This decision is important to those seeking to uphold a favorable variance grant in the wake of neighboring opposition because this decision demonstrates that focusing on the absence of, or minimal, undesirable change in a neighborhood and detriment to the health, safety, and welfare of a community can trump substantial variance requests, including those that are self-created in nature.