Vested Rights Act of 2014: Some questions

Over the last couple of months, I’ve been involved in some litigation involving the Vested Rights Act of 2014. One of the interesting sidelights of the case has to do with development plans. The statute, as you may recall from an earlier post, establishes a vested right to use a parcel of property in accord with an approved development plan or building permit. Tenn. Code Ann. § 13-4-310 (b).

The act defines the term “final development plan” to mean “a plan which has been submitted by an applicant and approved by a local government describing with reasonable certainty the type and intensity of use for a specific parcel or parcels of property.” The statute gives several examples such as a subdivision plat, a master planned unit development plan, site plan or “any other land use approval designation as may be utilized by local government.” Tenn. Code Ann. § 13-4-310(k)(5)(a). Furthermore, the statute gives a fairly precise definition of what needs to be included in order to be protected. Tenn. Code Ann. § 13-4-310(k)(5)(b).

Interestingly, §310 (e) allows the local government to specifically identify the types of development plans which will trigger the protection of the statute. However, there’s a big caveat: “provided, that regardless of the nomenclature used in the ordinance or resolution to describe a development plan, a plan which contains any of the information described in subdivision (k)(5) or (k)(6) shall be considered a development plan that will cause property rights to vest according to this section.”
 Tenn. Code Ann. § 13-4-310 (e).

What happens if the local government defines those develop plans, but leaves one out? For example, Metro Nashville has enacted such an ordinance, but the ordinance leaves out a final site plan approval by the zoning administrator pursuant to MetZo §17.40.170. Since that section very specifically requires that the plan “specifically describe the nature and scope of the development serve as the basis for the issuance of permits” it would seem to clearly fall within the protection of the statute.

Another thing which is significant here: the definition of a development plan within the Vested Rights Act does not require that the local approval be with a public hearing before an administrative body of any type. Certainly, those kinds of approvals would qualify, but in the Metro ordinance, if it is not a plan which must go before the planning commission, it must nevertheless be specifically approved by the zoning administrator prior to the issuance of the permits. Isn’t this enough to protect the property owner?

Another interesting issue which came up in this piece of litigation involves the definition of the term “building permit.” Although quite rare, there may be some types of land uses which do not require a building permit whatsoever. Certainly agricultural uses (although accessory buildings such as banes, housing for agricultural workers, and so forth may be needed) in many contexts do not need a building permit. Does that mean that agricultural application which does not include any construction may be lost if the local legislative body changes the zoning before farm work actually begins? Suppose the agricultural use obtained a certificate of occupancy – is the CO sufficient to vest rights under the VRA?

Finally, suppose the farm did apply for and obtain a building permit for housing for workers in a municipality (so that the well-known County agricultural exemption is inapplicable; Tenn. Code Ann. § 13-7-114) but this cause the local legislative body to change the zoning before construction could begin on the housing. Is there an argument that since the farm is over hundred acres in size, and the accessory housing is less than 1% of that, that the building permit does not somehow best the right to use the property as agricultural?

These are all interesting questions. Personally, it would seem to me that a development plan approved by the local zoning administrator would best rights pursuant to the terms of the plan even if the local government had not specifically named that type of a development plan as a document which could vest rights. It also seems to me that if an agricultural use obtained a building permit, or for that matter, a certificate of occupancy, relating to any portion of the property, that its rights are to vest based on the issuance of either the building permit or certificate of occupancy.

I’m sure we will learn more about this over time. In this case, much as in the Tennessee Religious Freedom Restoration Act, we have little case law on which to base our conclusions, and as a result it is quite difficult to anticipate how the courts will actually apply the statute. However, I would think over the next few years, we will certainly get some resolution of these issues.