Property owners and developers apply for building permits all the time. They fill out forms and submits plans to show that what they intend to build complies with current zoning and building codes. And when their applications are approved, they expect to receive a permit. But sometimes a permit is withheld or even revoked because of an intervening change in the applicable code provisions. For example, a property owner applies for a building permit to erect an outdoor storage building. At the time of his application, outdoor storage is a permitted use of the property, and the building plans are up to code. However, shortly after the application is approved, there is a change in zoning which now prohibits outdoor storage at the property. Can the municipality revoke his permit? Or does the property owner have a vested right to build based on his approved building permit? The answer depends on the state in which he lives.
A minority of states, like Wisconsin, follow what is often referred to as the Building Permit Rule. Under this rule, your right to use property consistent with the zoning code provisions which were in effect at the time you applied vests at the time you submit a building permit application that strictly conforms to all applicable zoning provisions.[1] The benefit of this approach is that it promotes predictability and provides a bright-line by which property owners, developers, municipalities and courts can determine whether a permit can be revoked.
A majority of states, like Illinois and Michigan, require more than just a fully compliant permit application. For a right to vest in these states, a property owner will also need to show that they have completed a substantial amount of construction, made a significant change to the property, or made significant expenditures based on the approved permit. Under this rule, a property owner’s building permit can be revoked even if construction has already begun if the construction has not been substantial or the changes or costs have not been significant. This rule is much harder to apply and typically favors the government. These cases often require expensive and fact-intensive litigation.[2]
If you need assistance with your building permit application or vested rights litigation, please contact the zoning and land use attorneys at Dalton & Tomich.
[1] Patricia E. Salkin, American Law of Zoning § 32:3, at 32-13—32-14 (2017).
[2] Cribbin v. City of Chicago, 384 Ill.App.3d 878 (2008) (“substantiality is a necessarily fact-intensive determination”).
