A Land Conservation (Williamson) Act contract cancellation is an option under limited circumstances and conditions set forth in Government Code (GC) §51280 et seq. In such cases, landowners may petition a board/council for a cancellation of a contract. The Department has compiled a general cancellation outline to assist the public in understanding what is involved in the process of cancelling a contract.
Cancellation of Williamson Act contracts involves a significant amount of documentation. The Department has compiled a Cancellation Petition Advice Paper (PDF) to assist landowners and juristictions in compiling and organizing the necessary material.
Williamson Act Contract Cancellation Frequently Asked Questions
How is a Williamson Act Contract Terminated?
The preferred method of contract termination is nonrenewal. To terminate a Williamson Act contract, a landowner files a notice of nonrenewal. Starting at the next contract anniversary date, the contract winds down over the remaining (usually nine-year) term, with the property taxes gradually rising to the full unrestricted rate at the end of the nonrenewal period. If the land is restricted by a Farmland Security Zone Contract, the contract winds down over the remaining 19 years, with the property taxes gradually rising to the full unrestricted rate at the end of the nonrenewal period.
What if a Landowner Desires to Terminate a Contract Prior to the Nine Year Nonrenewal Period?
Williamson Act contract cancellation is an option under limited circumstances and conditions set forth in Government Code (GC) §51280 et seq. In such cases, landowners may petition a board/council for Williamson Act contract cancellation. The board/council may grant tentative cancellation only if it makes required statutory findings (GC §51282(a)).
If the required findings are met, the landowner is required to pay a cancellation fee equal to 12.5 percent of the cancellation valuation (unrestricted fair market value) of the property (GC §51283(b)). In some cases, the contract specifies a higher cancellation fee and if the land is restricted by a Farmland Security Zone Contract, the cancellation fee is 25 percent.
What Information is Required in the Cancellation Petition?
The petition must contain a proposal for a specified alternative use for the property, and a list of all government agencies known to have permit authority related to the proposed use (GC §51282(e)). Additionally, all the information in support of and relevant to the required cancellation findings should be included for the board’s consideration and deliberation on the matter (i.e. a description of proximate land, including whether the land is under contract, vicinity and location maps of the land). Please see the Cancellation Petition Advice Paper for more detailed assistance.
What are the Required findings for Contract Cancellation?
The board or council may grant tentative approval for cancellation of a Williamson Act contract only if it makes either public interest or consistency finds. In some cases, the contract or local government may require both public interest and consistency findings to be made in order to cancel the contract.
Cancellation of a Farmland Zone Security contract requires both the public interest and consistency findings be made and approval of the Director of the Department of Conservation. In the resolution tentatively approving the cancellation of a Farmland Security Zone contract, the board/council must find that no beneficial public purpose is served by the continuation of the contract and that the uneconomic nature of the agricultural use is primarily attributable to circumstances beyond the control of the landowner and local government. (GC§51297)
In order to find that the cancellation is consistent with the purposes of the Williamson Act, the board/council must also find:
- That the cancellation is for land on which a notice of nonrenewal has been served.
- That cancellation is not likely to result in the removal of adjacent lands from agricultural use.
- That cancellation is for an alternative use which is consistent with the applicable provisions of the city or county general plan.
- That cancellation will not result in discontiguous patterns of urban development.
- That there is no proximate, noncontracted land which is both available and suitable for the proposed use or that development of the contracted land would provide more contiguous patterns of urban development (GC §51282(b)).
In order to find that the cancellation is in the public interest, the board/council must find:
- That other public concerns substantially outweigh the objectives of the Williamson Act; and,
- That there is no proximate, noncontracted land which is both available and suitable for the proposed use, or, that development of the contracted land would provide more contiguous patterns of urban development (GC §51282(c)).
The uneconomic character of an existing agricultural use shall not by itself be sufficient reason for cancellation of the contract. The uneconomic character of the existing use may be considered only if there is no other reasonable or comparable agricultural use to which the land may be put (GC §51282(b)).
If the Required Findings Can Be Met, What Happens Next?
Upon tentative approval of a petition for cancellation, the clerk of the board/council must record with the county recorder a certificate of tentative cancellation, which provides:
- The name of the landowner requesting the cancellation,
- The fact that a certificate of cancellation of contract will be issued and recorded when specified conditions and contingencies are satisfied,
- A description of the conditions and contingencies which must be satisfied,
- and a legal description of the property (GC §51283.4(a)).
What Are the Conditions and Contingencies That Must Be Satisfied for Cancellation to Occur?
The board/council at their discretion may require certain conditions and contingencies be satisfied prior to final contract cancellation. Conditions to be satisfied include payment in full of the cancellation fee, together with a statement that unless the fee is paid, or a certificate of cancellation of contract is issued within one year from the date of the recording of the certificate of tentative cancellation, the cancellation fee shall be recomputed, based on the current fair market value of the land. Any provisions related to the waiver of the fee shall be treated in the manner provided for in the certificate of tentative cancellation.
Contingencies to be satisfied include a requirement that the landowner obtain all permits necessary to commence the project. The board/council may, at the request of the landowner, amend a tentatively approved specified alternative use if it finds that such amendment is consistent with the findings made (GC §51283.4(a)).
The landowner must notify the board/council after satisfying the conditions and contingencies enumerated in the certificate of tentative cancellation. Within 30 days of receipt of such notice, and based on a determination that the conditions and contingencies have been satisfied, the board or council must execute and record a certificate of (final) cancellation of contract (GC §51283.4(b)). Within 30 days of execution of a certificate of final cancellation, the county treasurer must forward the cancellation fees to the State Controller's Office. Cancellation fees not paid within one year of the recording of the certificate of tentative cancellation shall be recomputed as of the date of the notice (GC §51283.4(a))
What Happens if a Landowner Doesn’t Satisfy the Conditions and Contingencies for Tentative Cancellation?
If the landowner is unable to satisfy the conditions and contingencies enumerated in the certificate of tentative cancellation, the landowner must notify the board/council of the particular conditions or contingencies that cannot be satisfied. Within 30 days of receipt of the notice, based upon a determination that the landowner is unable to satisfy the conditions and contingencies listed, the board or council must execute and record a certificate of withdrawal of tentative approval of contract cancellation. However, the landowner will not be entitled to the refund of any cancellation fee paid (GC §51283.4(c)).
Is the City/County Required to Hold a Public Hearing to Cancel a Contract?
In order to consider contract cancellation, a county or city must give notice of, and hold a public hearing on the landowner's petition for cancellation. Notice must be provided to all landowners with land under contract of which any portion is within one mile of the exterior boundary of the property subject to the cancellation request.
Additionally, notice of the hearing and a copy of the landowner's petition must be mailed to the Director of the Department of Conservation at least ten (10) working days prior to the hearing on tentative cancellation (GC §51284). Within 30 days of the tentative cancellation of the contract, the city/county shall forward a copy of the published notice of the decision to the Director of the Department of Conservation.
What is the Cancellation Fee?
The cancellation fee is payment made to cancel a Williamson Act contract that provides a private benefit that tends to increase the value of the property (GC §51283(f)).
Prior to any action by the board/council approving tentative cancellation of any contract, the county assessor must determine the current fair market value of the land as though it were free of the contractual restriction (GC §51283(a)).
The landowner shall pay to the county treasurer upon cancellation the cancellation fee that is equal to 12.5 percent of the cancellation valuation of the property for Williamson Act contracted property and 25 percent of the cancellation valuation for Farmland Security Zone contracted property. (GC §§51283(b) and 51297(c)).
Cancellation fees that are not paid within one year of the recording of the certificate of tentative cancellation will be recomputed as of the date of notice (GC §51283.4(a) and (b)).
Can the Cancellation Fee be Waived?
If it finds that it is in the public interest, a board/council may waive any payment or any portion of a payment by the landowner. It may extend the time for making the payment, or a portion of the payment, contingent upon the future use made of the land, and its economic return to the landowner for a period of time not to exceed the unexpired period of the contract, had it not been cancelled, if all of the following occur:
The cancellation is caused by an involuntary transfer or change in the use which may be made of the land and the land is not immediately suitable, nor will be immediately used, for a purpose which produces a greater economic return to the owner.
The board or council has determined it is in the best interests of the program to conserve agricultural land use that the payment be either deferred or not required.
The waiver or extension of time is approved by the Secretary of the Resources Agency. The secretary will approve a waiver or extension of time only on the finding that the granting of the waiver or extension of time by the local agency is consistent with the policies of the Williamson Act and that the local agency complied with the Act in approving the cancellation. In evaluating a request for a waiver or extension of time, the secretary shall review the findings of the board or council, the evidence in the record of the board or council and any other evidence received concerning the cancellation, waiver, or extension of time (GC §51283(c)).
What is the Department of Conservation’s Role in Contract Cancellations?
The specific notification requirements set forth in GC §51284 must be submitted to the Director of the Department of Conservation, the Director shall review the proposed cancellation and shall advise the board or council on the findings required in GC §51282. Before taking action on the proposed cancellation, the board/council shall consider the Director’s comments (GC §51284.1(b)).
Notice to the Director of the Department must be provided as follows:
When a board or council accepts a landowner’s petition for tentative cancellation as complete, a notice must be mailed to the Director immediately. The notice must include: 1) a copy of the petition, 2) a copy of the contract, 3) a general description, in text or by diagram, of the contracted land, 4) a deadline for the Director to submit comments. Any comments shall advise the board or council on the required findings. (GC §51284.1)
Why Does Contract Cancellation Appear to Be So Difficult and Complicated?
A Williamson Act contract is an enforceable restriction pursuant to Article 13, section 8 of the California Constitution and §51252. Williamson Act contracts are not intended to be cancelled and in fact, cancellation is reserved for unusual, "emergency" situations. Therefore, the nine-year nonrenewal process has been identified as the legally preferred method for terminating a Williamson Act contract.
The Supreme Court has stated that cancellation is not appropriate where the objectives served by cancellation could be served by nonrenewal, (See Sierra Club v. City of Hayward (1981) 28 Cal.3d 840, 852-853).
The State of California’s Attorney General’s Office has opined that cancellation is impermissible “except upon extremely stringent conditions”, (62 Ops. Cal. Atty. Gen. 233, 240, (1979). The Attorney General has also opined that nonrenewal is the preferred contract termination method: “If a landowner desires to change the use of his land under contract to uses other than agricultural production and compatible uses, the proper procedure is to give notices of nonrenewal pursuant to section 51245.” (54 Ops. Cal. Atty. Gen 90, 92 (1971).)