There are several methods by which title can be conveyed on the Hollister Ranch and each method holds unique rights and abilities. Partnerships in the Hollister Ranch have been created using many different types of “vehicles”. Corporations, LLC’s, Partnership Agreements, Tenancy in Common are just some of the ways that title is held and each have advantages and disadvantages to an individual from both legal and tax viewpoints. When buying into an existing partnership it is advisable to seek legal counsel in determining if the type of ownership being offered suits your individual needs.
A Whole Parcel
The sprawling 14,400 acre Hollister Ranch is subdivided into 136 unique parcels boasting approximately 100 acres each. Because of the agricultural zoning by which the Hollister Ranch maintains its agricultural tax status, there are special rules and limitations that govern an owner’s ability to develop his/her property.
One option of ownership on the Hollister Ranch is to secure an entire 100-acre parcel. Each parcel can be developed subject to the Hollister Ranch CC&R’s and current county zoning ordinances, but each allows for a principal residence, a guest house, and an agricultural employee residence. The employee residence, however is only permitted by the County if there is a “need” for an employee necessary to carry on a legitimate and viable agricultural operation.
A 1/3 Undivided Interest
The majority of owners on the Hollister Ranch have chosen to enter into partnerships in which the ownership rights of the parcel have been divided into thirds. This does not mean that the physical land has been divided into 33.33-acre equal portions, but instead entitles the owners to equal use of the property. That being said when purchasing a 1/3 interest, it is important to keep in mind that you are not subdividing the property (hence the term “undivided”) and which “building rights” you are purchasing. As previously mentioned based on the regulations that govern agriculturally zoned property, there are three different buildings possible: the main residence, the guesthouse, and the agricultural employee residence.
The Principal Residence
Perhaps the most sought after, and certainly the most valuable, is a 1/3 undivided interest with “main house building rights”. This type of ownership allows for the owner exclusive rights to build the main (or sometimes referred to as the “principal”) residence on the designated parcel and live full time on the property if so desired. There are no restrictions as to size or type of construction other than those imposed by the HR CCR’s, County and Coastal Commission Zoning Ordinances.
The Guesthouse (Accesory Structure)
The “guesthouse” building rights secure an opportunity to build up to 800 square feet of living space, but do not allow for a full kitchen or full time habitation of the structure. A guesthouse can be built simultaneously with the main residence or after the main residence. It can not be built prior to a main residence and SB County Building guidelines specify that the guesthouse must be built inside a 2 acre “building envelope”. There have been exceptions to this policy however they are rare.
The Agricultural Employee Residence (Accessory Structure)
The “agricultural employee residence” is the third allowable building structure that may be permitted on a single 100-acre parcel. This structure may only be constructed after the County Agricultural Preserve Committee determines that there is a viable agricultural operation currently on site. Ag operations that qualify for an employee residence have varied over the years, but some have been: Horse Breeding, Flower Farms, Olive Orchards, Succulent Production, Organic Fruit Orchard, and Lemon Orchards. Due to the subjective nature of each type of operation and the changing opinions of the Ag Preserve Committee, this type of structure is very difficult to receive approval for.
There is another way to buy into the Hollister Ranch known as “access interests”. These are partnership interests that do NOT include any building rights and are restricted by the HR CCR’s. They exist within partnerships that were formed prior to 1988, when the HR membership voted to disallow further partnership division and limited the maximum ownership of a parcel to 3 families. These interests therefore are “grandfathered” and can vary from 1/12 to 1/3 undivided interests and allow for the owner to access the Hollister Ranch and all of the common areas, but again no building rights are associated with them. Because of the restrictive nature of these interests we highly recommended you seek legal counsel and review the partnership documents before buying