How Property Can Be Protected Against Changes in Local Zoning and Ordinances

Whether you are an individual, a small business, or a developer with a property that has a site plan recently approved or in process, there are provisions of the law you should be aware of in order to protect your investment in this current market. Under Virginia law (Virginia Code Section 15.2-2261), an approved final subdivision plat which has been recorded or an approved final site plan for a property shall be valid for a period of not less than five (5) years from the date of approval. You will notice that the language of the statute treats final subdivision plats and final site plans differently. An approved final subdivision plat must be recorded in order to remain valid for the five (5) year period, which in many cases will require that bonds be posted and maintained in full force and effect.  This should be contrasted to a commercial site plan, which under the statute is deemed final once it has been reviewed and approved by the locality if the only requirement remaining to be satisfied in order to obtain a building permit is the posting of any bonds or escrows. Thus, there is no requirement to post bonds for a commercial site plan in order to achieve the five (5) year period of validity.

Code Section 15.2-2261 provides that during the five year period of plan validity, subsequent changes to local ordinances cannot adversely affect the right of the developer or his successors in interest to commence and complete the development in accordance with the terms of the recorded plat or approved site plan, unless the change in the ordinance is required in order to comply with Virginia state law, or there has been some other mistake, fraud or change in circumstances substantially affecting the public health, safety or welfare. Given the downturn in the real estate market in recent years, the five year period of validity afforded under this statute may not be sufficient. Many builders and developers are experiencing the problem of site plans about to expire and subdivision plats which have been approved but which have not been recorded because of the need to avoid the expense of bonding, or if the subdivision plat has been recorded, the problem of extending a bond which is about to expire. 

A method to preserve development rights in a specific project so as to protect the project from subsequent changes to the zoning ordinance is through use of the more traditional vesting allowed by Virginia Code Section 15.2-2307 (commonly referred to as “Quillen” vesting). Under this statute, if the locality has approved a proffered rezoning with respect to a particular property, or if a preliminary plan and final subdivision plan or site plan have been approved, and the owner proceeds in reliance upon these approvals to incur obligations or incur substantial expenditures, the owner can achieve vested rights in the approved land use. Thus, if dedications or contributions are made by a developer pursuant to proffer requirements, Code Section 15.2-2307 could support vesting of a project without an approved final plan if for some reason proffers are partially performed prior to plan approval. Further, if the owner has undertaken some partial performance of an approved site plan or subdivision plan such as site work involving the installation of utilities and other site improvements, including possibly the granting of proffered dedications to public use where the project is subject to a proffered rezoning, vesting might be achieved even though the five (5) year period of plan validity under Code Section 15.2-2261 is expiring.  Questions of this nature are very fact-specific as to each different plan, and will require review and analysis of every particular project on a case by case basis.

Author: Geary H. Rogers - Email: GRogers@comptonduling.com