TO: Albemarle County Planning Commission
Mark Graham, Director, Department of Community Development
Amelia McCulley, Director of Zoning and Current Development/Zoning Administrator
Wayne Cilimberg, Director of Planning
FROM: Greg Kamptner, Deputy County Attorney
DATE: March 13, 2006
RE: Phased Cluster Subdivisions; Vested Rights
This memorandum addresses the doctrine of vested rights as applied to a proposed program that would require phased cluster subdivisions in the Rural Areas zoning district.
Privately held land is subject to applicable local zoning ordinances whether enacted before or after property is acquired. Generally, landowners have no property rights in anticipated uses of their land since they have no vested property rights in the continuation of the land’s existing zoning status. Board of Zoning Appeals of Bland County v. Caselin Systems, Inc., 256 Va. 206 (1998).
The doctrine of vested rights protects certain existing private property interests when zoning regulations are changed. Thus, in limited circumstances, private landowners may acquire a vested right in planned uses of their land that may not be prohibited or reduced by subsequent zoning legislation. Virginia Code § 15.2-2307; Holland v. Board of Supervisors of Franklin County, 247 Va. 286 (1994). A vested rights analysis determines whether a previously approved use has ripened to the point that it should be allowed to exist, even though it would not conform to new zoning regulations.
2. Three factors determine whether vested rights exist
Virginia Code § 15.2-2307 identifies the three factors that must be established in order for a landowner’s rights to be deemed vested: (1) the owner obtains or is the beneficiary of a significant affirmative governmental act that remains in effect allowing development of a specific project; (2) the owner relies in good faith on the significant affirmative governmental act; and (3) the owner incurs extensive obligations or substantial expenses in diligent pursuit of the specific project in reliance on the significant affirmative governmental act.
Section 3 focuses on the significant affirmative governmental act. Section 4 addresses the issue of determining whether a landowner has incurred extensive obligations or substantial expenses in diligent pursuit of the project. The second factor – good faith reliance – is presumed and will not be addressed in this memorandum.
3. The proposed phased cluster subdivision program under a vested rights analysis
Virginia Code § 15.2-2307 delineates a number of the affirmative governmental acts that are deemed to be significant, and those acts include: (1) the County’s approval of a preliminary subdivision plat for the period during which it remains in effect (see section 3(B)), where the applicant diligently pursues approval of the final plat within a reasonable period of time under the circumstances; and (2) the County’s approval of a final subdivision plat, also for the period during which it remains in effect.
As currently proposed, the phased cluster subdivision program would allow a landowner to create 4 lots in the first phase – 2 cluster lots, the preservation parcel, and the residue. All future cluster lots would be created from the residue. In each subsequent 10-year phase, 2 additional cluster lots could be created from the residue until all division rights were exhausted.
The creation of a phased cluster subdivision would proceed as follows:
A. The preliminary plat
The first governmental act in the development process for a phased cluster subdivision would be the County’s approval of a landowner’s preliminary plat showing the ultimate division of the property (all phases) and all improvements. This would be the first significant affirmative governmental act in a vested rights analysis for a phased cluster subdivision. The preliminary plat would be valid for 5 years. Albemarle County Code § 14-228. During the 5-year period, the landowner would have the right to develop the project as approved on the preliminary plat, insulated from changes to the Zoning Ordinance, provided that the landowner could establish that his or her rights have vested. Albemarle County Code § 14-227.
A landowner must submit to the County a final plat for all or part of the property within one year after the approval of the preliminary plat. Albemarle County Code § 14-228. If a final plat is not timely submitted, the County’s approval of the preliminary plat is null and void and whatever vested rights existed to complete the project under the preliminary plat would expire as well. Because the phased cluster subdivision program would allow only one final plat to be recorded in a 10-year period, the landowner would be assured that only a timely filed first final plat could be approved in conformance with an approved and vested preliminary plat, insulated from any changes to the Zoning Ordinance.
The 5-year period that an approved preliminary plat is valid is the minimum period allowed by the Virginia Code, and a longer period could be allowed by the Subdivision Ordinance. Virginia Code § 15.2-2241(5). Because the potential buildout of a phased cluster subdivision could take decades, a preliminary plat’s period of validity could be extended beyond the 5-year period to assure those landowners whose preliminary plats have vested that they could develop according to the approved preliminary plat. However, a vested preliminary plat could insulate a project from changes to the Zoning Ordinance for years, possibly decades.
B. The first final plat
Within the first year after a preliminary plat is approved, the landowner must submit to the County a final plat for all or part of the property. Albemarle County Code § 14-228. For a phased cluster subdivision, the first final plat would create not more than 2 cluster lots, as well as the preservation parcel and the residue.
A first final plat would have to be approved and recorded during the 5-year period that the preliminary plat remains valid in order for the final plat to be insulated from any changes to the Zoning Ordinance. Once the final plat is approved, the landowner would have a vested right to develop that phase of the project, provided that extensive obligations or substantial expenses were incurred in diligent pursuit of the project (see section 4).
C. Subsequent final plats
Under current regulations, a landowner has the right to record the final plats for the remaining sections shown on an approved preliminary plat for a period of 5 years after the date that the first final plat was recorded, or a longer period approved by the subdivision agent or the Planning Commission. Albemarle County Code § 14-230(A). This timeline protects landowners creating phased subdivisions from changes to the Zoning Ordinance, but only for a relatively limited period of time – at most about 10 years (assuming the first final plat is approved and recorded near the end of the 5-year period the preliminary plat is valid, plus an additional 5 years for all subsequent final plats to be approved and recorded).
The proposed phased cluster program would allow each subsequent final plat to create not more than 2 additional cluster lots. Each subsequent final plat could be approved and recorded only after at least 10 years had passed since the prior final plat was recorded. Because of the 10-year phasing period (which would be established in the Zoning Ordinance), the Subdivision Ordinance would need to be amended to extend the period in which subsequent final plats in a phased cluster subdivision may be recorded from 5 years to a period not less than 10 years. See, Albemarle County Code § 14-230.
If a subsequent final plat was recorded within the prescribed period, the landowner would have a vested right to develop that phase of the project, provided that extensive obligations or substantial expenses were incurred in diligent pursuit of the project (see section 4).
4. Extensive obligations or substantial expenses; diligent pursuit
The other key issue in a vested rights analysis will be whether the owner incurred extensive obligations or substantial expenses in diligent pursuit of the project in reliance on the approved plat. Virginia Code § 15.2-2307.
The developer of a phased cluster subdivision may incur extensive obligations or substantial expenses in conjunction with the first final plat. See, City of Suffolk v. Board of Zoning Appeals of the City of Suffolk, 266 Va. 137 (2003). The nature of cluster developments may require that much of the infrastructure installed in the first phase be sized, located and constructed to handle the ultimate development of the entire property, and the first-phase infrastructure alone may be sufficient to find that the obligations are extensive or the expenses are substantial.
Assuming that the period of validity of a preliminary plat is extended under the proposed phased cluster subdivision program, diligent pursuit will be measured in years, even decades, with periods of activity and, possibly, long periods of inactivity. As for whether a landowner has diligently pursued a project, the County will have to determine whether the landowner undertook a series of activities to develop the whole property through a series of regular, if not constant, events. See, City of Suffolk, supra. The very nature of the proposed phased cluster subdivision program assures that development activities will be sporadic, with interludes of inactivity possibly lasting 10 years or more. Nonetheless, under this program, these activities would be found to be a series of regular events requiring a finding of diligent pursuit.
The doctrine of vested rights protects certain existing private property interests when zoning regulations are changed. For the phased cluster subdivision program, the vested rights analysis will depend on the regulations adopted to implement the program, and the particular facts applicable to a specific subdivision. Under current regulations, vested rights may arise with the approval of a preliminary plat and continue for the 5-year period that the preliminary plat is valid. Regulations implementing the phased cluster subdivision program could extend that period, allowing vested rights to be established for at least the length of time that a preliminary plat is valid assuring the landowner could develop the number of lots approved on the preliminary plat. For final plats, vested rights may arise when the final plat is recorded and apply to that particular phase of the subdivision.
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