Coeur d’Alene, Idaho, May 29, 2018. This is a follow-up to our September 28, 2017 post titled “Did Your Driveway Disappear? The Idaho Supreme Court’s 2017 Decision in Regan v. Owen Wiped Out Easements.” In that post, we discussed the Idaho Supreme Court’s Regan v. Owen decision of September 8, 2017. The September 28, 2017 post, along with our May 10, 2017 post, summarizes the background for this post.
Refresher: Effective March 30, 2016, Idaho Code section 63-1009 was amended to clarify that only recorded financial interests (like a mortgage or lien) and leases can be extinguished by a tax deed. That legislative change left unanswered whether tax deeds issued before March 30, 2016 could wipe out easements or other non-financial property interests. On September 8, 2017 the Court ruled 3-2 that, under the prior Idaho tax-deed statute, a tax deed wipes out all “encumbrances” on the property, with “encumbrances” including non-financial property interests such as easements.
The Court’s September 8, 2017 decision jeopardized the validity of countless non-financial interests in tax-deeded parcels—including utility easements, conservation easements, restrictive covenants, shared-well agreements, and more. Shortly after the release of this decision, the Regans petitioned for a rehearing. The Court granted that petition and reheard the case on December 15, 2017.
On March 5, 2018, the Court published its decision upon rehearing. Regan v. Owen, 2018 Opinion No. 19 (“Regan III”). In this decision the Court, by a 4-1 margin, reversed its September 8, 2017 decision. Justice Robyn Brody, who had authored the dissent from the Court’s September 8 decision, now wrote for the Court majority in reversing that ruling. Her opinion for the Court reasoned that the term “encumbrances” in the prior tax-deed statute covered only financial interests in property, such as a mortgage, judgment lien, assessment, or tax. See Regan III, at 5-10.
Based on its ruling that an easement is not an “encumbrance” under the prior tax-deed statute, the Court reversed its September 8, 2017 decision and sent the case back to the trial court for further proceedings.
Idaho landowners can now breathe a sigh of relief. They no longer have to worry about losing their easement rights if their neighbor fails to pay property taxes. Likewise, utility companies, conservation easement holders, and beneficiaries of water or septic easements need no longer be concerned that someone’s delinquent property taxes could upend their longstanding rights.
In sum, the Court’s third Regan v. Owen decision is a big win for property rights—and property owners—in the State of Idaho.
Note: This post is not legal advice and should not be relied upon as such. Different sets of facts will likely lead to different legal conclusions. If you need assistance with real property matters, call Bristol George, PLLC at 866-511-1500 for a forty-five minute, no charge consultation to see if we can help.
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