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Conditional Site Plan Approval Not Enough to Create Vested Right in Prior Zoning

The Appellate Division Second Department concluded that a conditional site plan approval, without more, was insufficient to create vested rights in the prior zoning of a parcel. In Matter of Exeter Building Corp. v. Town of Newburgh, the Appellate Division reversed the Supreme Court holding that the Newburgh Zoning Board was incorrect in determining the property owner had no vested rights.

While the property owner was processing its application, obtaining a subdivision and conditional approval of a site plan that required a compliance with a number of conditions, the property was rezoned. In an earlier litigation, it was determined that because part of the property owner’s application process included a subdivision the property had the benefit of Town Law § 265-a, which grants a three year exemption from a rezoning for property that has been subdivided. During that three year period a single family home on the property and water tanks were removed, there was some grading and clearing done and a sign announcing the availability of town homes on the site was erected, pursuant to permits. However, all the conditions to the site plan were not fulfilled and the chair of the planning board was not authorized to sign the site plan until all of the conditions were fulfilled.

Upon the expiration of the three year exemption period, the property owner sought a declaration from the ZBA that it had vested rights. The ZBA disagreed and this lawsuit ensued.

The Court summarized the law on vested rights in New York as follows:

” a vested right can be acquired when, pursuant to a legally issued permit, the landowner demonstrates a commitment to the purpose for which the permit was granted by effecting substantial changes and incurring substantial expenses to further the development” (Town of Orangetown v Magee, 88 NY2d 41, 47; see Matter of RC Enters. v Town of Patterson, 42 AD3d 542, 544; Matter of Lefrak Forest Hills Corp. v Galvin, 40 AD2d 211, 218, affd 32 NY2d 796, cert denied 414 US 1004; Matter of Fox Lane Corp. v Mann, 216 App Div 813, 813, affd 243 NY 550). “Neither the issuance of a permit . . . nor the landowner’s substantial improvements and expenditures, standing alone, will establish the right. The landowner’s actions relying on a valid permit must be so substantial that the municipal action results in serious loss rendering the improvements essentially valueless” (Town of Orangetown v Magee, 88 NY2d at 47-48; see Glacial Aggregates LLC v Town of Yorkshire, 14 NY3d at 136; People v Miller, 304 NY at 109; Matter of RC Enters. v Town of Patterson, 42 AD3d at 544; People ex rel. Publicity Leasing Co. v Ludwig, 172 App Div 71, 73-74, affd 218 NY 540, 542).”

In concluding the property owner lacked vested rights in this case the Court held:

“Whether a planning board’s final unconditional approval of a site plan may, even in the absence of a building permit, satisfy the first prong of the test has not been settled in New York (cf. Figgie Intl. v Town of Huntington, 203 AD2d 416, 418-419; but cf. 202 Devs. v Town of Haverstraw, 175 AD2d 473), and it is not before us now….Even if a property owner may claim vested rights in reliance on an unconditional final approval of a site plan, it is undisputed that the Planning Board never granted unconditional approval of the plaintiffs’ site plan.

Further, the plaintiffs may not ground a claim of common-law vesting upon reliance on the limited permits that were issued to them. None of those permits-which authorized demolition of the single-family house and the water tanks, erection of a sign, and regrading and clearing-either singly or together amounted to the Town’s approval of Madison Green. Thus, the plaintiffs’ expenditures and construction in reliance on those limited permits could not satisfy the prerequisite for common-law vesting of the right to construct the entire project. At most, the limited permits authorized the plaintiffs to complete the work described in the permits themselves, which, if undertaken, would leave the subject property in a condition amenable to development under the new, more restrictive R-1 zoning regulations.”

-Steven Silverberg

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