Rogue River navigability ruling complicates potential sale of properties.

Selling land along the Rogue River has become more complicated since landowners challenged the state's recent ruling that the banks and channel are public property.

Property owners and Realtors who want to put up a "For Sale" sign have to decide whether to tell prospective buyers that a portion of the property could be in dispute for years.

"I figure I would have to disclose," said Anna Pitts, who's trying to sell her house, which fronts a stretch of river between Rogue River and Gold Hill. She doesn't quite know what to tell a buyer because many of the legal and technical issues that could take years to resolve.

"So far nobody seems to understand," said the 60-year-old, who has lived in the spacious four-bedroom house for seven years and is upset that the state has decided to take away land she has paid taxes on.

In June, the State Land Board said an 89-mile stretch of the Rogue River from Grave Creek to Lost Creek Dam is a navigable waterway and has belonged to the citizens of Oregon since statehood was declared in 1859. Declaring the river banks public land allows rafters, anglers and other boaters to pull onto the banks without trespassing on private property.

The state sent letters to 3,000 owners of properties within 200 yards of either side of the Rogue, notifying them of the change.

Many property owners like Pitts, however, argue they own title to the middle of the river or to the opposite bank. A group of property owners, mostly in the Shady Cove area, sued the state over its ruling last month in Jackson County Circuit Court.

The Department of State Lands has decided to halt pursuing any further action against the properties until the legal action is resolved. Meanwhile, if a property owner or Realtor chooses not to disclose the situation, they could expose themselves to risk.

"If you do not, you're just open for a lawsuit," said Roger King, president of Save Our Legacy, a local group representing some 90 property owners along the river.

King said he knows of one man who sold his property in the upper Rogue in 2005 who didn't disclose and now is in a legal dispute. He declined to reveal the property owner's name.

He predicted there will be more legal problems if property owners and their Realtors don't inform buyers.

King said he expects the state's decision to be tied up in the courts for six or seven years, which could disrupt the plans of many along the Rogue who want to sell their properties.

"It's a serious situation," he said.

If the state wins, King said the property owners will face the potential of losing a portion of their property, but also might need to conduct a new survey or spend other money to get deeds cleared up.

The state says it owns the river channel and the banks up to the ordinary high water marks, but not to areas that flood. In some locations, particularly around Shady Cove, the channel has changed markedly since statehood, which could add difficulty to resolving property disputes.

People who work in real estate appear to realize the importance of informing buyers about the issue.

"I would say disclose, disclose, disclose," said Steve Blanton, chief executive officer for the Rogue Valley Association of Realtors. "When in doubt, disclose."

Blanton said there is too much uncertainty over the river properties to neglect telling a prospective buyer what to expect.

Mike Malepsy of Windermere Trails End Real Estate said he passes out a question-and-answer form he's received from the state to inform potential buyers about the issue.

Courts have consistently upheld navigability declarations on other rivers in the past.

"We're telling everybody that more than likely it's going to be law," he said.

He said it would be unwise for a Realtor to knowingly fail to inform a buyer. "That would be a head-in-the-sand thing," he said.

Tom Harrison, a broker with Oregon Opportunities Real Estate in Medford, said, "To not disclose, it would be fraudulent. It certainly wouldn't be ethical."

Harrison said that most buyers will generally understand the issue, and it shouldn't have a big effect on their decision to buy.

"That is, if it's explained to them properly," he said.

Once advised, Harrison said buyers could get legal counsel if they needed more information.

For Anna Pitts, the issue of the state's claim has come at a time when it's already difficult to sell property. Pitts said she no longer has her property listed with a Realtor after six months on the market. She is trying to sell the house by herself for $549,000.

Pitts said she typically waits until a buyer appears interested in her property before explaining the details about the state's claim to best of her ability. But she doesn't know exactly where the ordinary high water mark is on her property so her lack of knowledge makes it difficult to explain the situation adequately.

Pitts is concerned that confusion over the state's assertion that it owns the banks could prompt some boaters to trespass on her property and dump trash, which has already been a problem at times.

"There is a big question about the way people will interpret this," she said.

Reach reporter Damian Mann at 776-4476 or dmann@mailtribune.com.