Monday, May 27, 2013

TNCPA §208(g):Discontinuation

We have only two sections left for discussion: TNCPA §208 (g) and §208 (d) (2). This post will talk about §208 (g), the discontinuation clause. This subsection of the statute is complicated but certainly that is not unusual in the context of this statutory provision. Legislatively, there had been a debate about the discontinuation of non-conforming properties. Under the common law of most states, if the owner of a non-conforming property abandons the property with no intent to resume, the non-conforming aspect is lost and future activities on the property must conform to the zoning regulations. Many cities across the country, and in Tennessee, adopted discontinuation provisions which would limit the time that the property could be inactive, and once that time had elapsed, any renewed activity had to comply with local zoning. Notice the difference however: under the common law, the property owner had to abandon the use, implying a conscious and voluntary waiver of the right to use the non-conforming property; under the discontinuation provisions, even if the owner intended to resume the activity, if the inactivity lasted beyond the length of time specified in the ordinance, the non-conforming aspect was lost. Some cities had relatively reasonable discontinuation periods, including Metro Nashville which allowed inactivity for two years; others, were much shorter, like Chattanooga with its 60 day provision.

In order to bring some uniformity to this area, the Tennessee General Assembly once again amended the act, this time in 2004. I have posted a copy of the public act, Chapter 775 of the Public Accept 2004 on the Internet at this location. The reason to post the original public chapter is to highlight a key difference between the statutory codification in the original public chapter.

If you compare the two, specifically §208 (g) (4), you will note that the original Chapter 775 ends subsection (g) (4) with the period before the words “provided, however…” Those words then begin the next sentence and the formatting is such that it is clear that they apply to the entirety of subsection (g). In fact, I have included a copy of subsection (g) (4) here as originally adopted by the Tennessee General Assembly.

This is critically important. Because essentially, the final proviso of (g)(4) seems entirely to reverse the previous provisions of the paragraph. The early provisions of §208 (g) seem to indicate that the TNCPA “shall not apply if an industrial, commercial, or other business establishment ceases to operate for a period of thirty (30) continuous months…” The next sentence provides: “Anytime after the thirty-month cessation, any use proposed to be established on the site, including any existing or proposed on-site sign, must conform to the provisions of the existing zoning regulations.”

Based on this language at the beginning of §208 (g), it seems that the Tennessee General Assembly had chosen the objective approach: instead of requiring an intentional and voluntary waiver, if the non-conforming property remains inactive for 30 months or more, the non-conforming aspect of the property is forever lost. Then there are four subsections which explore situations in which the 30 month time frame may be tolled because of extenuating circumstances.

But then there’s the final proviso, which, in the original legislation appears as follows in relationship to subsection (4):

. . .

(4) The reactivation of the non-conforming use any time prior to the end of the thirty (30) month period.

Provided, however, that the restrictions of subsections (g) & (i) shall only apply if the property owner intentionally and voluntarily abandons the non-conforming use of the property. In any contested matter on the use of such property, the government has the burden of proving an overt act of abandonment in such matter.

I have spoken to a number of the legislators and lawyers involved in the amendment to this provision in 2004, and evidently this final proviso to (g) was added at the last minute. But the implication of this section is clear: the 30 month discontinuation provision is of little impact; first, before (g), or for that matter (i) applies, there must be some evidence that the property owner intentionally and voluntarily abandoned the non-conforming property and the government has the burden of proving an overt act of abandonment. If there is no demonstration of intentional and voluntary abandonment, then even if the property remains inactive for five years, the non-conforming aspect may be resumed regardless of the local zoning provisions.

By the way, I don’t know of any appellate court decisions interpreting this final proviso; I do know of one trial court decision here in Davidson County where the court seemed to give precedence to the requirement of intentional and voluntary abandonment, but also found that the 30 months have been tolled by litigation involving the property. If anyone knows of any other case law with regard to the apparent inconsistency between the final proviso and the remainder of subsection (g), I’d love to hear about it.

Let’s start from the top and review §208 (g) in its entirety. The subsection first indicates, as mentioned above, that the three principal sections of the act, (b)-(d) will not apply if the business “ceases to operate” for a period of 30 continuous months. After that, “any use proposed to be established… must conform to the provisions of the existing zoning regulations.”

Subsection (g) then lists four circumstances under which the discontinuation provision would be tolled. Those include (1)litigation; (2) construction, reconstruction, or renovation; (3) application for a building permit; and (4) reactivation of the non-conforming use prior to the end of 30 months.

There is, however, another provision which seems to undercut entirely the original restriction. The final lines of §208 (g) (4) read:

Provided, however, that the restrictions of this subsection (g) and subsection (i) shall only apply if the property owner intentionally and voluntarily abandons the non-conforming use of the property. In any contested matter on the use of such property, the government has the burden of proving an overt act of abandonment in such matter.”

This leaves us with something of a dilemma. The first sentence of subsection (g) requires nothing more than 30 months of inactivity in order for the protections of the statute to lapse. The last sentence requires voluntary abandonment by the owner and the government has the burden of proving “an overt act of abandonment” in order to prevail. Although this section has been on the books for almost 10 years, we still have no appellate court decisions. The lower court decisions in which I have been involved, have all deferred to the intent of the owner. The difficulty with that approach is that the four circumstances which toll the time of discontinuation are unnecessary if everything turns on the owner’s intent. In fact, the 30 months themselves are unnecessary. If the owner does not intentionally abandon the non-conforming property, it is merely inactive, and if the owner intends at some point to resume the activity, why couldn’t 10 or 15 years go by so long as there was an intention to resume those activities? Subsection (g) is notably difficult understand.

Perhaps we’ll get an answer this question one day. As it stands now, it’s difficult understand subsection (g). Obviously, there was a late amendment in the state capital when this provision was passed, tacking on the final proviso. Equally as evidently, no one really thought through how the final proviso would affect the preceding language. And, as it happens, the final proviso is almost contradictory to the foregoing provisions of the subsection.

Remember one other thing: as we have discussed previously, subsections (g), (h), and (i) do not apply to home rule municipalities unless the municipality has opted in by action of its legislative body. TNCPA §208 (j). That means that Memphis, Knoxville, and Chattanooga may all specify their own time of discontinuation as applied to commercial and industrial businesses, and related rules. This three cities are not bound (unless they choose to do so) by the final proviso or even by the length of time specified in subsection (g) for inactivity.

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