Development

Subdivision Does Not Confer Vested Rights

Matter of Genser v. Board of Zoning and Appeals

NYLJ 9/21/09, p. 36, col. 1

AppDiv, Second Dept.

(memorandum opinion)

In landowner's article 78 proceeding challenging denial of an area variance, the Board of Zoning Appeals (BZA) appealed from Supreme Court's grant of the petition. The Appellate Division reversed, holding that subdivision had not conferred vested rights on landowner.

Landowner's parcel had accommodated a single-family house since 1949. On Dec. 15, 2005, the Nassau County Planning Commission approved landowner's application to subdivide the property into two parcels, one which was about 109 feet wide and the other about 73 feet wide. On the same day, the town submitted a planned zoning amendment to the county planning commission, which recommended a local determination by the Town of North Hempstead. The proposed zoning amendment had first been made public on Nov. 29, and was adopted by the town on Jan. 3. The amendment set a minimum lot width of the greater of 65 feet or the average width of lots within a 200-foot radius of the parcel. The amendment would have made landowner's smaller parcel nonconforming. Meanwhile, however, on Dec. 30, landowner had sold the larger parcel and the existing house. When landowner sought to build on the smaller parcel, the building department disapproved the application because the lot failed to conform with the zoning ordinance. Landowner then sought an area variance, which the BZA denied. Landowner then brought this article 78 proceeding, contending that landowner had acquired vested rights and that the denial of the area variance was arbitrary. Landowner also contended that if the variance were not annulled, landowner's property had been taken without just compensation. Supreme Court granted the petition and annulled he BZA's determination.

In reversing, the Appellate Division first held that landowner had not acquired vested rights because landowner had not made substantial changes or incurred substantial expenditures in reliance on a permit. The court then concluded that the variance denial was not arbitrary because evidence before the BZA suggested that the variance would produce an undesirable change in the character of the neighborhood by introducing a lot smaller than others in the vicinity. The court also noted that landowner's hardship was self-created, at least to some extent, because he had constructive notice of the zoning change when he signed the contract of sale, since the proposal for the change had been made public two weeks earlier. The court did not address landowner's takings claim, because Supreme Court had not reached that issue.

COMMENT

A developer that has obtained subdivision approval before a municipality enacts a more restrictive zoning ordinance will have the right to develop the subdivision if the developer has acquired common law vested rights, or if landowner qualifies for protection under Village Law ' 7-709. At common law, a developer's rights to complete development generally do not vest unless the developer has undertaken substantial expenditures prior to the effective date of the change in the ordinance. Village Law ' 7-709 provides developers that have received final subdivision plat approval with a time period during which they are entitled to develop without complying with a newly enacted ordinance.

A developer does not obtain a common law vested right to complete development unless the developer can show substantial expenditures and construction prior to the effective date of the more restrictive zoning ordinance. Thus, in Berman v. Warshavsky, 256 AD2d 334, the court held that a developer had not acquired common law vested rights when developer had obtained subdivision approval and sold one of the subdivided lots before the village amended its zoning ordinance. The court applied the amended zoning ordinance's definition of the word “street,” which left the developer with two undevelopable parcels, noting that no rights had vested because developer had not yet undertaken any construction, let alone substantial construction. Moreover, even if a court finds expenditures sufficient to vest common law rights to complete development, developer may lose those rights if a developer's actions suggest abandonment of its rights, or if a court concludes that the developer has recouped any expenditures made in reliance on the subdivision approval. In Schoonmaker Homes v. Village of Maybrook, 178 AD2d 722, the developer had acquired a vested right to complete development on its subdivision as result of over $700,000 of expenditures and construction on infrastructure and general improvements in furtherance of its subdivision plan. Nonetheless, the developer was not permitted to complete construction because the zoning board of appeals, based on substantial evidence, had found that the passage of 20 years without completion of the development evidenced developer's abandonment of the plan, resulting in divestiture of any vested right. As a result, the ZBA was entitled to insist on compliance with the new zoning ordinance, which was designed to minimize the problems relating to density, open space, traffic, and parking that had manifested in the 20 years since subdivision approval had been received. Id.

Village Law ' 7-709 provides alternative protection to a developer who has obtained subdivision approval. The statute protects a developer's subdivision rights against subsequent ordinances, even if the municipality enacts the ordinance before developer has acquired common law vested rights, so long as the developer builds within the statute's time period (which varies from two to three years, depending on the circumstances). Curiously, in cases like Berman and Genser, landowner does not appear to have relied on section 7-709. But in Matter of Ellington Constructions Corp. v. Zoning Board of Appeals, 77 NY2d 114, the Court of Appeals made it clear that the statute was designed to provide landowners with protection beyond that available under the common law doctrine. In Ellington, the court held that because the developer had, within the statutory period, installed various improvements on a country road adjoining a subdivision including drainage facilities, water and sewer lines, and fire hydrants, landowner was entitled to complete the development even though no building permit had been issued within the statutory period of exemption. The court indicated that so long as landowner, within the statutory period, makes expenditures that would qualify for common law vested rights, the statute protects landowner even if those expenditures are made after amendment of the zoning ordinance. However, if a developer fails to apply for a building permit within the statutory period, and any expenditures incurred during the period would be valuable under the new ordinance, landowner is subject to the new ordinance. In Matter of Padwee v. Lustenberger, 226 AD2d 897, the court upheld a decision by the Zoning Board of Appeals rejecting a building permit application, despite completion and sale of two of five subdivided plots within the statutorily prescribed exemption period, because a majority of the improvements made by the developer were equally useful under the amended ordinance.

Zoning Board Bound By Its Own Precedent

Matter of Lyublinskiy v. Srinivasan

NYLJ 9/29/09, p. 36, col. 1

AppDiv, Second Dept.

(memorandum opinion)

In an article 78 proceeding to review denial of a special permit, the Board of Standards and Appeals (BSA) appealed from a Supreme Court judgment granting the petition. The Appellate Division modified, holding that the BSA was bound by its own precedent about the scope of its authority, but that the case should be remitted to the BSA for a determination about how to exercise that authority.

Landowner owns a parcel in a residential district. The parcel had been improved with a single-family house, which landowner sought to enlarge. Landowner sought a permit to alter the building, but during construction testing revealed that the foundation was not sound. Landowner then completed more demolition that authorized by the permit, and the Department of Buildings (DOB) issued a stop work order. Later DOB rescinded the order, and construction continued. The DOB later discovered, however, that the new construction exceeded the bulk regulations for the premises. When DOB issued a second stop work order, construction stopped, and landowner applied for a special permit to enlarge the premises in excess of the size permitted by the zoning ordinance. The BSA concluded that because of the demolition work, landowner's construction was not an enlargement of the existing building, and that the BSA therefore lacked authority to grant the permit. Landowner then brought this article 78 proceeding. Supreme Court granted the petition and the BSA appealed.

The Appellate Division agreed with Supreme Court that the BSA's determination was arbitrary and capricious. The Appellate Division noted that in a prior matter, the BSA had granted a special permit legalizing the enlargement of a residence even though the entire original framing had to be replaced during construction as a result of termite damage and age. The court held that the BSA was obligated to adhere to its own precedent, and that in this case, the BSA had neither adhered to that precedent nor distinguished the prior determination in which the BSA had concluded that it did have authority to grant a permit. The court noted, however, that because of the BSA's erroneous conclusion that it lacked authority, the BSA never made the required findings necessary before it could issue a special permit. As a result, the court remitted to the BSA to determine whether the construction meets the zoning resolution's standard for grant of a special permit.

Subdivision Does Not Confer Vested Rights

Matter of Genser v. Board of Zoning and Appeals

NYLJ 9/21/09, p. 36, col. 1

AppDiv, Second Dept.

(memorandum opinion)

In landowner's article 78 proceeding challenging denial of an area variance, the Board of Zoning Appeals (BZA) appealed from Supreme Court's grant of the petition. The Appellate Division reversed, holding that subdivision had not conferred vested rights on landowner.

Landowner's parcel had accommodated a single-family house since 1949. On Dec. 15, 2005, the Nassau County Planning Commission approved landowner's application to subdivide the property into two parcels, one which was about 109 feet wide and the other about 73 feet wide. On the same day, the town submitted a planned zoning amendment to the county planning commission, which recommended a local determination by the Town of North Hempstead. The proposed zoning amendment had first been made public on Nov. 29, and was adopted by the town on Jan. 3. The amendment set a minimum lot width of the greater of 65 feet or the average width of lots within a 200-foot radius of the parcel. The amendment would have made landowner's smaller parcel nonconforming. Meanwhile, however, on Dec. 30, landowner had sold the larger parcel and the existing house. When landowner sought to build on the smaller parcel, the building department disapproved the application because the lot failed to conform with the zoning ordinance. Landowner then sought an area variance, which the BZA denied. Landowner then brought this article 78 proceeding, contending that landowner had acquired vested rights and that the denial of the area variance was arbitrary. Landowner also contended that if the variance were not annulled, landowner's property had been taken without just compensation. Supreme Court granted the petition and annulled he BZA's determination.

In reversing, the Appellate Division first held that landowner had not acquired vested rights because landowner had not made substantial changes or incurred substantial expenditures in reliance on a permit. The court then concluded that the variance denial was not arbitrary because evidence before the BZA suggested that the variance would produce an undesirable change in the character of the neighborhood by introducing a lot smaller than others in the vicinity. The court also noted that landowner's hardship was self-created, at least to some extent, because he had constructive notice of the zoning change when he signed the contract of sale, since the proposal for the change had been made public two weeks earlier. The court did not address landowner's takings claim, because Supreme Court had not reached that issue.

COMMENT

A developer that has obtained subdivision approval before a municipality enacts a more restrictive zoning ordinance will have the right to develop the subdivision if the developer has acquired common law vested rights, or if landowner qualifies for protection under Village Law ' 7-709. At common law, a developer's rights to complete development generally do not vest unless the developer has undertaken substantial expenditures prior to the effective date of the change in the ordinance. Village Law ' 7-709 provides developers that have received final subdivision plat approval with a time period during which they are entitled to develop without complying with a newly enacted ordinance.

A developer does not obtain a common law vested right to complete development unless the developer can show substantial expenditures and construction prior to the effective date of the more restrictive zoning ordinance. Thus, in Berman v. Warshavsky, 256 AD2d 334, the court held that a developer had not acquired common law vested rights when developer had obtained subdivision approval and sold one of the subdivided lots before the village amended its zoning ordinance. The court applied the amended zoning ordinance's definition of the word “street,” which left the developer with two undevelopable parcels, noting that no rights had vested because developer had not yet undertaken any construction, let alone substantial construction. Moreover, even if a court finds expenditures sufficient to vest common law rights to complete development, developer may lose those rights if a developer's actions suggest abandonment of its rights, or if a court concludes that the developer has recouped any expenditures made in reliance on the subdivision approval. In Schoonmaker Homes v. Village of Maybrook, 178 AD2d 722, the developer had acquired a vested right to complete development on its subdivision as result of over $700,000 of expenditures and construction on infrastructure and general improvements in furtherance of its subdivision plan. Nonetheless, the developer was not permitted to complete construction because the zoning board of appeals, based on substantial evidence, had found that the passage of 20 years without completion of the development evidenced developer's abandonment of the plan, resulting in divestiture of any vested right. As a result, the ZBA was entitled to insist on compliance with the new zoning ordinance, which was designed to minimize the problems relating to density, open space, traffic, and parking that had manifested in the 20 years since subdivision approval had been received. Id.

Village Law ' 7-709 provides alternative protection to a developer who has obtained subdivision approval. The statute protects a developer's subdivision rights against subsequent ordinances, even if the municipality enacts the ordinance before developer has acquired common law vested rights, so long as the developer builds within the statute's time period (which varies from two to three years, depending on the circumstances). Curiously, in cases like Berman and Genser, landowner does not appear to have relied on section 7-709. But in Matter of Ellington Constructions Corp. v. Zoning Board of Appeals, 77 NY2d 114, the Court of Appeals made it clear that the statute was designed to provide landowners with protection beyond that available under the common law doctrine. In Ellington, the court held that because the developer had, within the statutory period, installed various improvements on a country road adjoining a subdivision including drainage facilities, water and sewer lines, and fire hydrants, landowner was entitled to complete the development even though no building permit had been issued within the statutory period of exemption. The court indicated that so long as landowner, within the statutory period, makes expenditures that would qualify for common law vested rights, the statute protects landowner even if those expenditures are made after amendment of the zoning ordinance. However, if a developer fails to apply for a building permit within the statutory period, and any expenditures incurred during the period would be valuable under the new ordinance, landowner is subject to the new ordinance. In Matter of Padwee v. Lustenberger, 226 AD2d 897, the court upheld a decision by the Zoning Board of Appeals rejecting a building permit application, despite completion and sale of two of five subdivided plots within the statutorily prescribed exemption period, because a majority of the improvements made by the developer were equally useful under the amended ordinance.

Zoning Board Bound By Its Own Precedent

Matter of Lyublinskiy v. Srinivasan

NYLJ 9/29/09, p. 36, col. 1

AppDiv, Second Dept.

(memorandum opinion)

In an article 78 proceeding to review denial of a special permit, the Board of Standards and Appeals (BSA) appealed from a Supreme Court judgment granting the petition. The Appellate Division modified, holding that the BSA was bound by its own precedent about the scope of its authority, but that the case should be remitted to the BSA for a determination about how to exercise that authority.

Landowner owns a parcel in a residential district. The parcel had been improved with a single-family house, which landowner sought to enlarge. Landowner sought a permit to alter the building, but during construction testing revealed that the foundation was not sound. Landowner then completed more demolition that authorized by the permit, and the Department of Buildings (DOB) issued a stop work order. Later DOB rescinded the order, and construction continued. The DOB later discovered, however, that the new construction exceeded the bulk regulations for the premises. When DOB issued a second stop work order, construction stopped, and landowner applied for a special permit to enlarge the premises in excess of the size permitted by the zoning ordinance. The BSA concluded that because of the demolition work, landowner's construction was not an enlargement of the existing building, and that the BSA therefore lacked authority to grant the permit. Landowner then brought this article 78 proceeding. Supreme Court granted the petition and the BSA appealed.

The Appellate Division agreed with Supreme Court that the BSA's determination was arbitrary and capricious. The Appellate Division noted that in a prior matter, the BSA had granted a special permit legalizing the enlargement of a residence even though the entire original framing had to be replaced during construction as a result of termite damage and age. The court held that the BSA was obligated to adhere to its own precedent, and that in this case, the BSA had neither adhered to that precedent nor distinguished the prior determination in which the BSA had concluded that it did have authority to grant a permit. The court noted, however, that because of the BSA's erroneous conclusion that it lacked authority, the BSA never made the required findings necessary before it could issue a special permit. As a result, the court remitted to the BSA to determine whether the construction meets the zoning resolution's standard for grant of a special permit.