Wednesday, January 26, 2011

Vested Rights and Variances

I probably spend too much time talking about variances in New Jersey, but as anyone who might peruse my previous posts will know, the New Jersey variance statute is quite similar to ours here in Tennessee. In a recent case, Fernandez v Bloomfield Zoning Board of Adjustment, 2010 WL 5428868, the New Jersey Appellate Division considered a case in which the property owner obtained a permit for a stop work order was issued when it was determined that the construction violated setback in other bulk requirements. The board of zoning appeals denied the requested variance, not because they could not demonstrate that there was an exceptional physical feature (on the contrary, the property was quite your regular in shape) but because the Board found that the variance would not satisfied the so-called "negative criteria," that is, the variance would create a substantial detriment to the public good.

On appeal, the court affirmed the decision of the Board of Adjustment and also addressed the landowners claim that the town should be prevented from issuing the stop work order as a result of the doctrine of equitable estoppel. The difficulty with equitable estoppel or the doctrine of vested rights under the circumstances is that a clear error was made in issuing the permit. In effect, the building permit was void ab initio. The problem is that if the building official could bind the city and change the laws of the city merely by the issuance of a building permit, there would be a lot of modifications to city walls based on an erroneous permit issuance. The rule generally is that there is no estoppel created by the issuance of an invalid building permit. The developer must be careful and must check on his own to ensure that the construction is permitted within the guidelines of the city regulations.

 The Appellate Division agreed with this approach:

The law is clear that to prove equitable estoppel in these circumstances, plaintiffs must establish that the zoning ordinance was ambiguous and the municipal official's interpretation of the ordinance was at least "debatable." [citations omitted] "A less restrictive rule of law for invocation of estoppel against a municipality could invite intolerable vulnerability to mischief at the hands of unethical builders or construction officials." Irvin, supra, 305 N.J. Super. at 660. We do not imply here that plaintiffs acted unethically; we merely acknowledge that there are sound reasons to set a high standard for invoking estoppel based on the erroneous issuance of a land use permit.
Plaintiffs do not argue that the zoning ordinance at issue was unclear or that the municipal official's interpretation was debatable, as opposed to simply wrong. In fact, the record contains no explanation as to the responsible municipal official's interpretation of the zoning ordinance, and it is not even clear which person in the zoning office was responsible for erroneously issuing the permit. Because the zoning office acted contrary to an unambiguous ordinance in issuing a zoning permit, plaintiffs cannot invoke estoppel against the municipality.
Further, the equities do not favor plaintiffs, given the Board's finding that granting the variance would cause harm to their neighbors. As built, the second-story addition was 2.57 feet from the neighbors' property line on the westerly side, instead of the six feet required by the ordinance. As the Board reasonably concluded, in such a crowded neighborhood, that represented a significant incursion on the neighbors' privacy. Further, as previously noted, the Board credited the testimony of the objectors that the addition interfered with their available light and their views of the neighborhood.
 As a result, there was no equitable estoppel. For interesting case with much more serious ramifications, take a look at Park View Associates v City of New York, 71 NY 2d 274 (1988).
The denial of the variance was also affirmed.
Applicants for a variance bear the burden of proving that they satisfy both the positive and negative criteria. See Cohen v. Bd. of Adjustment, 396 N.J.Super. 608, 615 (App. Div. 2007). We agree with [the lower court] that there was nothing arbitrary in the Board's decision that plaintiffs failed to satisfy the negative criteria. Based on the Board's factual findings, which find ample support in the record, granting the variances would have caused some of the very harms the zoning ordinance was designed to prevent, including diminishing the neighbors' light and open space, and invading their privacy. See N.J.S.A. 40:55D-2(c). Therefore, on this record, plaintiffs did not satisfy the negative criteria, and the Board properly denied their application on that basis.
There is nothing unusual in the outcome of this case. But again, it runs somewhat counter to the result that common sense might indicate and serves as a warning to developers everywhere that care must be taken to ensure that the proposed development complies with local regulations.
Tennessee courts do seem to be somewhat more lenient under certain circumstances with regard to the doctrine of equitable estoppel and/or vested rights. There is a somewhat similar case here in Tennessee, Rebound v Goodlettsville Board of Zoning Appeals, 1989 WL 150670 (Tenn. App. December 13, 1989). In that case, the zoning official evidently made a mistake in advising the applicant about the potential use of the property. At the time of the revocation of the building permit, the construction of the facility was substantially complete. Several million dollars worth state. The majority of the court felt that a variance should have been granted, but under Tennessee law, as we have frequently discussed, that is certainly problematic. There was almost certainly no basis for a variance under Tennessee law. In a concurring opinion, Judge Ben Cantrell relied instead on the doctrine of equitable estoppel, feeling that the advice given by the local zoning officials was sufficient to commit the city. As the NJ case above demonstrates, many times that is not enough.

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