Contract Cancellations

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. 

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.

The board or council may grant tentative approval for cancellation of a Williamson Act contract only if it makes either Public Interest or Consistency findings. 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. 

In order to find that the cancellation is Consistent with the Purposes of the Williamson Act, the board/council must find:

1. That the cancellation is for land on which a notice of nonrenewal has been served.
2. That cancellation is not likely to result in the removal of adjacent lands from agricultural use.
3. That cancellation is for an alternative use which is consistent with the applicable provisions of the city or county general plan.
4. That cancellation will not result in discontiguous patterns of urban development.
5. 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:

1. That other public concerns substantially outweigh the objectives of the Williamson Act; and,

2. 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)).​

Farmland Security Zone (FSZ) contracts require both of the above sets of findings plus 3 additional findings (GC §51257)

1. That no beneficial public purpose would be served by the continuation of the contract.
   

2. That the uneconomic nature of the agricultural use is primarily attributable to circumstances beyond the control of the landowner and the local government.
   

3. That the landowner has paid a cancellation fee equal to 25 percent of the cancellation valuation.​​

Upon tentative cancellation approval for a Williamson Act contract, the clerk of the board/council must record with the County Recorder a Certificate of Tentative Cancellation, which provides:

1. The name of the landowner requesting the cancellation,
2. The fact that a Certificate of Final Cancellation of contract will be issued and recorded when specified conditions and contingencies are satisfied,
3. A description of the conditions and contingencies which must be satisfied,
4. The amount of the cancellation fee certified by the board/council and that full payment is required prior to issuance of the Certificate of Final Cancellation, together with a statement that unless the fee is paid within one year of the last computation, the fee shall be recalculated when the landowner notifies the board/council that all contingencies have been met. For FSZ cancellations, the fee is paid prior to issuing the tentative certificate of cancellation.
   
5. A legal description of the property (GC §51283.4(a)).​
   
   

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.​

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 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. The landowner would not be entitled to the refund of any cancellation fee (GC §51283.4(c)). ​

The cancellation fee is payment made to cancel a Williamson Act or Farmland Security Zone contract.  It is the intent of the Legislature that fees paid to cancel a contract do not constitute taxes (GC §51283(f)). 

The County Assessor will determine the fee by calculating the current fair market value of the land to be cancelled, as though it were free of contractual restrictions (not under contract). This is done prior to any action by the board/council approving tentative cancellation of any contract. 

The County Assessor will then certify this amount to the board/council and send a notice to the landowner and Department of Conservation (GC §51283(a)).

Williamson Act cancellation fees that are not paid within one year from the date of the last computation, shall be recomputed upon determination that the conditions and contingencies have bee satisfied, and prior to the board/council executing a Certificate of Final Cancellation (GC § 51283.4(a) and (b)). 

A Farmland Security Zone cancellation fee is required to be paid prior to tentative cancellation approval by the board/council (GC § 51297(c)(3)).

Disputes over cancellation fees should be resolved before a city/county approves a tentative cancellation (GC § 51283.5).

The funds are collected by the County Treasurer and transmitted to the State Controller within 30 days of execution of the Certificate of Final Cancellation (GC § 51283(e)).

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:

1. 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.
2. 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.
3. 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)).
   

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).)​​​​​​​​​