5) Vested Rights, Grandfathering and Moratoria

 By Peter Olson, Jenkins and Olson

Vested rights, grandfathering and moratoria are three closely related concepts that cause property owners and local governments a great deal of difficulty. Vested rights and grandfathering, although often used interchangeably, are not really the same concept; or, more precisely, it is not useful to use those terms for the same concepts. Instead, vested rights should be thought of as rights that arise pursuant to general legal principals, and grandfathering should be thought of as rights that are specifically created by the local zoning ordinance. In other words, a person can be grandfathered by a specific provision of an ordinance where they did not have vested rights. Alternatively, many persons would have vested rights where their local ordinances were silent on grandfathering.

A few examples may be useful. Consider an applicant who realizes the local zoning code has no restrictions on chicken houses, and he requests a building permit for ten chicken houses, the closest of which will be seventy-five feet from a subdivision. The local government suddenly decides its regulations on chicken houses are too weak, and implements a moratorium on construction of chicken houses. The local government subsequently adopts tougher measures, including a 500 foot setback, and attempts to apply it to the applicant. Do these restrictions apply to him? No, because he has vested his right to proceed. Under well-established law, a property owner who applies for a building permit under the existing regulations is entitled to consideration under that ordinance. No grandfathering provision would apply here; the principal is established in law.

On the other hand, consider a property owner who has made no application, and simply owns a vacant residential R-1 lot. The local government amends the zoning ordinance to alter the setbacks on R-1 property, increasing front setbacks from 20 to 40 feet, and so forth. However, it includes a grandfathering provision that lots of record before a certain date may still apply the prior standards. That would be a grandfathering provision, not a vested right. If the government had not included such a provision, the property owner would be bound by the change in the zoning ordinance. There is no vested right to use one’s property under the current zoning. The property owner had to take steps to vest rights, such as filing an application, or substantial expenditures in conjunction with some sort of formal or informal approval of the development. In contrast, grandfathering is simply a right granted by the zoning ordinance. It may overlap with vested rights, or it may not.

Many of the provisions in typical non-conforming use provisions actually exceed what vested rights law would require. For example, allowing a property owner to revive a business after a lapse of up to one year would not be required by a vested rights analysis, but is a typical grandfathering provision. On the other hand, simply allowing a preexisting business that predates zoning to operate on a residentially zoned lot would implicate a vested right and a taking if the local government tried to halt the lawfully pre-existing business. Many ordinances include a grandfathering provision to this effect, but it is superfluous.

Vested Rights Defined
 
 
 

 

Vested rights of a property owner to use property in a certain way may not be infringed upon by the adoption of a zoning ordinance which prohibits such use. W.M.M. Properties, Inc. v. Cobb County, 255 Ga. 436, 339 S.E.2d 252 (1986). Banks County v. Chambers of Georgia, Inc., 264 Ga. 421, 444 S.E.2d 783 (1994). The term “vested rights” means interests which it is proper for the state to recognize and protect and of which the individual cannot be deprived arbitrarily without injustice. A statute which confers a right upon an applicant seeking to alter the use of his property confers no vested rights upon all property owners. Stone Mountain Indus., Inc. v. Wilhite, 221 Ga. 269, 144 S.E.2d 357 (1965). However, a property owner “can avail himself of the privilege thereof while it remains in the [statute].” Stone Mountain Indus., Inc. v. Wilhite, supra at 269, 144 S.E.2d 357. Thus, if a property owner becomes an actual applicant seeking to alter the use of his land, he has a vested right to consideration of his application under the statutory law then in existence. Banks County v. Chambers of Ga., Inc., 264 Ga. 421, 444 S.E.2d 783 (1994).

Important to keep in mind is that implicit in all vested right analysis is the notion that the right was lawful in the first place. An illegal application for a building permit does not vest rights. If the use was never permitted, an erroneous assurance that the project would be approved, combined with substantial expenditures should not vest rights. However, this is a subtle point often lost on the courts, and so should be presented carefully.

Examples of Vested Rights
 
 
 

 

The Supreme Court in W.M.M. Properties, Inc. v. Cobb County, 255 Ga. 436, 339 S.E.2d 252 (1986) laid out the seminal analysis of the different types of vested rights. That Court identified four types:

Right to Rely upon Building and other Permits Once Issued
 
 
 

 

Once a building permit has issued, a landowner has a right to develop the property pursuant to that permit (during its term or for a reasonable time after its issuance if no term is specified), notwithstanding a zoning or regulatory change subsequent to the issuance of the building permit, and notwithstanding the fact that there has been no substantial expenditure of funds in reliance upon the building permit. Clark v. International Horizons, Inc., 243 Ga. 63, 252 S.E.2d 488 (1979); Keenan v. Acker, 226 Ga. 896, 178 S.E.2d 196 (1970). In Craig v. City of Lilburn, 226 Ga. 679, 177 S.E.2d 75 (1970), it was held that the issuance of septic tank permits plus expenditures in reliance

thereon created a vested right to use the property as shown by the installation of the septic tanks notwithstanding a regulation enacted subsequent to the issuance of those permits. In Schulman v. Fulton County, 249 Ga. 852, 853, 295 S.E.2d 102 (1982), it was held that the issuance of a special use permit plus expenditures in reliance thereon, like a building permit, created a vested right in the use approved by the permit. On the other hand, in Cobb County v. Peavy, 248 Ga. 870, 872, 286 S.E.2d 732 (1982), it was held that issuance of a business license is not the equivalent of a building permit.

Right to Issuance of a Building Permit
 
 
 

 

A landowner has a right, enforceable by mandamus, to be issued a building permit in accordance with zoning regulations as such regulations exist at the time a proper application for building permit is submitted to the proper authority. City of Atlanta v. Westinghouse Electric Corp., 241 Ga. 560, 246 S.E.2d 678 (1978); Gifford Hill & Co., Inc. v. Harrison, 229 Ga. 260, 191 S.E.2d 85 (1972); Howard Simpson Realty Co. v. City of Marietta, 220 Ga. 727, 141 S.E.2d 460 (1965); City of Decatur v. Fountain, 214 Ga. 225, 104 S.E.2d 117 (1958). Similarly, a purchaser who contracts to buy land conditioned upon its being rezoned has a right to be issued a certificate of zoning compliance (a prerequisite to the issuance of a building permit) in accordance with a zoning amendment obtained by the purchaser. Clairmont Development Co., Inc. v. Morgan, 222 Ga. 255, 149 S.E.2d 489 (1966).

Right to Rely upon Approved Development Plan
 
 
 

 

(1) Formally approved. A landowner has a right to develop the property pursuant to a development plan duly approved by the county zoning authority pursuant to powers delegated to it by the county commission even though the development plan varied the existing zoning, where the landowner has expended large sums of money in furtherance of the development and has dedicated land for use as parks and schools in reliance upon its approved development plan. DeKalb County v. Chapel Hill, Inc., 232 Ga. 238, 244, 205 S.E.2d 864 (1974). (2) Informally approved. A landowner has a right to develop property where the property was purchased in reliance upon the assurance of one county commissioner that the property was zoned for the use intended, the development plan was in accordance with the existing zoning and was approved, albeit informally, by the county commissioners, and the landowner has expended money in reliance upon the development plan and the existing zoning. Spalding County v. East Enterprises, Inc., 232 Ga. 887, 209 S.E.2d 215 (1974).

Right to Rely upon Official Assurances that a Building Permit Will Probably Issue
 
 
 

 

“Where a landowner makes a substantial change in position by expenditures in reliance upon the probability of the issuance of a building permit, based upon an existing zoning ordinance and the assurances of zoning officials, he acquires vested rights and is entitled to have the permit issued despite a change in the zoning ordinance which would otherwise preclude the issuance of a permit.” Barker v. County of Forsyth, 248 Ga. 73, 76, 281 S.E.2d 549 (1981). Also, when a landowner makes expenditures, in addition to paying the purchase price, in reliance on the existing zoning and assurances by zoning officials that they would be able to get a permit for the use planned, county officials may

not subsequently impose a moratorium on the issuance of all building permits for the use intended. Cannon v. Clayton County, 255 Ga. 63, 335 S.E.2d 294 (1985).

Improperly Issued Permits
 
 
 

 

Improperly issued permits are void, and void permits do not vest rights, even if they have been relied upon and money has been expended. Unjust results can occur if property owners rely on statements from clerks or even permits issued in violation of the ordinance. Corey Outdoor Advertising v. Bd. of Adjustment of Atlanta, 254 Ga. 221, 327 S.E.2d 178 (1985). Matheson v. DeKalb County, 257 Ga. 48, 354 S.E.2d 121 (1987).

Grandfathering
 
 
 

 

Very little case law actively defines “grandfathering” and most cases that deal with the concept blend it with the concept of vested rights. This paper draws the distinction of grandfathering being a right granted solely by the zoning ordinance, and not be general legal principles. Some zoning ordinances explicitly use the rules of vested rights to define grandfathering, and other ordinances grandfather exceptions that would not have vested rights. For example, amending a zoning ordinance but allowing pre-existing lots to use standards from the prior zoning ordinance would be a grandfathering that was not required under the principles of vested rights. The typical zoning ordinance has a non-conforming use provision that would be considered grandfathering. The continuance of the existing use itself would be a vested right, but for example provisions allowing the expansion of a non-conforming use, or the renewal of such a use after a lengthy lapse, would not be required under vested rights law.

Grandfathering, in the sense it exceeds the bounds of a vested right, is not required by law, and is essentially a gift to the property owner. Grandfathering provisions typically have a political component rather than a legal component, but it is important to understand their basis. Once the grandfathering provision is enacted, however, it in and of itself grants the property owner a vested right, and so jurisdictions should think carefully about the rights they grant.

Zoning Moratoria
 
 
 

 

A moratorium in a zoning context is typically a ban on receiving applications for rezonings or permits, and moratoria are frequently imposed to preserve the status quo before the adoption of a new zoning ordinance. While they appear frequently in practice, very few decisions interpreting the validity of moratoria have been issued by the appellate courts. As such, local governments have been provided little guidance as to what constitutes a valid moratorium.

Authority and Validity
 
 
 

 

The adoption of a moratorium is authorized under the general police power of the local government. DeKalb County v. Townsend Associates, Inc., 243 Ga. 80, 252 S.E.2d 498 (1979). There is no specific statutory or constitutional authority for adoption of a moratorium. Under the police power, the validity of the moratorium is determined based on its reasonableness. The test would generally be, first, whether the interests of the public generally, as distinguished from some particular class, require the protection of the

moratorium and second, whether the moratorium adopted is reasonably necessary for the accomplishment of the goal, and not unduly oppressive upon individuals. DeKalb County v. Townsend Associates, Inc., 243 Ga. 80, 252 S.E.2d 498 (1979). In this case, the County imposed a moratorium of unlimited time and duration on sewer tap-ins. The court found no evidence to justify the moratorium, and it was found to have been an arbitrary action.

If exceptions are authorized, there need to be standards to control the granting of exceptions. Davidson Mineral Properties, Inc. v. Monroe County, 257 Ga. 215, 357 S.E.2d 95 (1987). In this case, the county adopted a moratorium on building permits of unlimited duration, which allowed the board of commissioners unfettered discretion to grant exceptions. This was found a violation of due process.

Standards and Exceptions
 
 
 

 

A moratorium must explicitly address at least three issues: first, what public purpose necessitates its adoption. Second, what is the term of its duration. Third, what standards govern exceptions, if exceptions are authorized. DeKalb County v. Townsend Associates, Inc., 243 Ga. 80, 252 S.E.2d 498 (1979); Davidson Mineral Properties, Inc. v. Monroe County, 257 Ga. 215, 357 S.E.2d 95 (1987).

Under this standard, a moratorium of unlimited duration has been found to be arbitrary; in addition, the fact that a moratorium did not specify its necessity in its terms was also a negative factor. A moratorium that allowed unlimited discretion to the local governing body to grant exceptions, without any standards for guidance, was found to violate due process; such an ordinance was too vague, indefinite and uncertain to be enforceable. Davidson Mineral Properties, Inc. v. Monroe County, 257 Ga. 215, 357 S.E.2d 95 (1987). The moratorium was criticized for unlimited discretion, as well as for the fact that the lack of standards provided no notice to the property owner of the criteria for issuance of a permit. This was found to be too vague, indefinite and uncertain to be enforceable.

A moratorium cannot function as an interim zoning ordinance and give all discretion to the local governing body. By inference from cases disapproving moratoria, a valid moratorium will be of limited duration, for a specific purpose, and not allow exceptions, or allow exceptions governed by clear standards. The moratorium should serve a general purpose and be reasonably tailored to achieving that purpose.

Adoption of Moratorium
 
 
 

 

The adoption of moratoria has provided some confusion to local governments. The purpose of a moratorium being to prevent the vesting of rights under the existing law, many jurisdictions adopt moratoria with no notice, to surprise the development community and slam the door while the revision to existing ordinance gets underway. This procedure was frequently challenged under the zoning procedures law, with disgruntled applicants asserting that the zoning moratorium itself was an amendment to the zoning ordinance or was a zoning decision, subject to the Zoning Procedures Law, O.C.G.A. § 36-66-1 et seq. Many superior courts struck moratoria on this rationale.

The Supreme Court finally provided some guidance in the case of City of Roswell v. Outdoor Systems, Inc., 274 Ga. 130, 549 S.E.2d 90 (2001). In that case, Roswell enacted a temporary one-month moratorium on billboard permit applications while it revised its sign ordinance. Outdoor Systems challenged the moratorium as not being adopted in accordance with the Zoning Procedures Law. That law, of course, requires minimum advertisements and a public hearing prior to amending a zoning ordinance. The Court reasoned that a temporary moratorium was not “final legislative action” and thus did not fit the definition of a zoning ordinance, such that the ZPL would apply. The dissent agreed with the conclusion, but pointed out that a more logical rationale would be the fact that a sign ordinance is not a zoning ordinance at all.

The Court held, “Because the moratorium was temporary, limited in scope to billboards exceeding a specific size, and enacted in response to a court order invalidating existing sign regulations, we conclude that it was a reasonable interim action and therefore exempt from the procedural requirements of O.C.G.A. § 36-66-4.” 549 S.E.2d at 91. Hence, this gives some standards on adoption, as well as additional insight on criteria that would make an acceptable moratorium. A permissible moratorium would follow this model, and could likely get away with a longer time-frame as well.

Moratorium and Vested Rights
 
 
 

 

A moratorium cannot abridge vested rights. Cannon v. Clayton County, 255 Ga. 63, 335 S.E.2d 294 (1985). Moratoria are often directed at building permits. For example, a new zoning ordinance is soon to be adopted, or amended, and the local governing body desires to prevent a flood of applications under the old ordinance. Alternatively, some portion of a zoning ordinance is struck or about to be struck as defective, and a local governing body seeks to prevent property from being unzoned. In those cases, a moratorium cannot be used to defeat the vested rights of property owners. If a property owner has applied for a permit, for example, a subsequently enacted moratorium cannot prevent the issuance of the permit.

Recent Vested Rights Cases
 
 
 

 

This section summarizes the holdings of some recent vested rights cases, as a useful tool for the practitioner.

Enviro Pro Inc. v. Emmanuel Co., ___ Ga.App. ___, 2004 WL 48901 (Georgia Court of Appeals, January 12, 2004).
 
 
 

 

A county board chairman gave a letter to a company purporting to give the company the authority to apply septic tank waste to farm property. The entire board later voted that it did not have approval. The court found the board chairman’s letter to be ultra vires (unauthorized), and held that the company had no vested rights as the permit had not been lawfully obtained.

Union Co. v. CGP, Inc., ___ Ga. ___, 589 S.E.2d 240 (2003).
 
 
 

 

Developer began subdivision development with land purchase, health department approval and land disturbance permit in 1997; developer obtained additional building permits in 2000. In 2001, developer sought more building permits and was told no more

until the subdivision complied with Flood Damage Prevention Ordinance (FDPO), dating to 1983 (amended 1993 and 2000). Developer claimed vested rights. Trial court claimed CGP’s rights vested because of substantial expenditures in further of approved plans and permits, plus official assurances that future permits would probably issue. Supreme Court reversed, noting that illegal building permits that violation the preexisting FDPO do not vest rights, and that “unofficial approval of CGP’s plans without regard to the restrictions of the flood ordinance would frustrate Union County’s duty to its residents to enforce the law.” The issuance of the prior building permits vested no rights, as they were issued as a mistake, and violated the ordinance.

Netherland v. Nelson, 261 Ga.App. 765, 583 S.E.2d 478 (2003).
 
 
 

 

In this case, Netherland sought and obtained a permit from the county to dig a well on his property. It was later determined that under the zoning ordinance a well was not permitted and thus suit was initiated by an interested party to enjoin the use of the well. (The interested party owned a community water system and thus had a financial interest in prohibiting the use of the well.)

Netherland argued that he had been issued a permit by the county to dig the well and had obtained a vested right to construct and use the well. That being the case, the Plaintiff had no right to enjoin Netherland’s use of the well. However, the court found that Netherland had not obtained a vested right to use the well since the permit when issued was not valid, owing to its violation of the existing zoning ordinance. Only where a valid building permit has been issued does the applicant acquire a vested right to the use permitted by the building permit.

Café Risqué/We Bare All Exit 10, Inc. v. Camden County, 273 Ga. 451, 542 S.E.2d 108 (2001).
 
 
 

 

Where a local government issues a permit which is in violation of an existing ordinance, even if issued under a mistake of fact, the permit is void and the holder does not acquire any vested rights. This is true even if substantial expenditures were made in reliance on the void permit. A local government is not prohibited from revoking an improperly issued permit.

North Georgia Mountain Crisis Network, Inc. v. City of Blue Ridge, 248 Ga.App. 450, 546 S.E.2d 850 (2001).
 
 
 

 

A land use that is merely contemplated for the future but unrealized as of the effective date of a new zoning regulation does not constitute a non-conforming use. A property owner may acquire a vested right to use property where he makes a substantial change in position by expenditures in reliance on the probability that a building permit will issue or based upon an existing ordinance and the assurances of zoning officials. But where the only change in position is the purchase of the property itself, the purchase does not confer a vested right to a particular use by the purchaser.

City of Statham v. Diversified Development Company, 250 Ga.App. 846, 550 S.E.2d 410 (2001).
 
 
 

 

This case reaffirms the rule of law that a permit issued by a governing body in violation of an ordinance is void and a permit such as this does not convey any vested rights to the holder. A permit issued for a use or for a structure which violates an ordinance is void even though an officer of the local government issued the permit.

Power Line Moratorium
City of Buford v. Georgia Power Company, 276 Ga. 590, 581 S.E.2d 16 (2003).
 
 

 

The city of Buford imposed a moratorium on the construction of electric power substations by Georgia Power Company. The moratorium was invalidated by the trial court and affirmed in the decision of the Court of Appeals. Since the construction of electric power stations is regulated by state law, the local government is preempted from enforcement of provisions concerning the right of Georgia Power to construct or not construct electric power substations. This decision is support for the proposition that a local government may not control, in any way, the placement of electric power substations within certain zoning districts. According to the court, in the final sentence of its decision “…we conclude that the regulation of electric power substations by municipalities is preempted.”

Rabun County v. Georgia Transmission Corp., 276 Ga. 81, 575 S.E.2d 474 (2003).
 
 
 

 

Rabun County enacted a three year moratorium on the construction of new power lines exceeding 35,000 volts in capacity. The Court ruled that the ordinance blocked GTC’s purpose of constructing a high voltage transmission line across a seven- mile portion of Rabun County to service the county’s electrical needs; therefore, the ordinance, effectively infringes on the power of GTC to acquire the property interests in question through the exercise of eminent domain. The Court further held that the Georgia Constitution of 1983, Article IX, Section II, Paragraph I, provides home rule for counties, and grants the governing authority of each county the legislative power to adopt clearly reasonable ordinances, resolutions, or regulations relating to its property, affairs, and local government for which no provision has been made by general law and which is not inconsistent with this Constitution or any local law applicable thereto. However, this power of home rule does not extend to “[a]ction affecting the exercise of the power of eminent domain.” Ga. Const.1983, Art. IX, Sec. II, Par. I(c)(6).

10 Responses to “5) Vested Rights, Grandfathering and Moratoria”

  1. Annie Maniscalco Says:

    Bought house with a pre-existing one bedroom full bath and kitchen. I lived in it till the house I remodeled was livable for me to move in. I bought “AS” from the Bank. I have been renting the unit for as along as I owned the property as guest house. I find out it has no permits. Can this be grandfathered in zoning to make My house duplex instead of a single. How do i do this?

  2. Philip Twiss Says:

    I have a question, I have a permit for and built a cover over an existing arena. Barrow County changed the off sets during construction. We changed our foundation to meet the new offsets. Now, some many years after the structure is was finished (Inspected by the County twice, signed off and taxed by the County) The county has come to me to have the structure torn down because of the complaints of a connect neighbor. They claim the arena has to be some 200 feet from the property line. They have not defined what an arena is in their building code other then the offset requirement. I have shown that I was will and did move the foundation after the initial mistake was found by the county. I would have again change my plans if told by the county prior to finished construction. The arena predates the building code as evidenced by affidavit form independent contractor and satellite pictures. Can the County, now come to me demanding its destruction at great cost ~$150,000.00 because a connected neighbor is using the county resources to financially destroy me?

    • landmatters Says:

      Mr. Twiss: We appreciate your question, but the Atlanta Regional Commission is not involved in local zoning decisions. We suggest you open a dialogue with your local planning and zoning staff on this issue. You may also want to consider speaking with an attorney who is familiar with zoning and development codes in Barrow County.

  3. sherry burchell Says:

    is it true before building chicken houses in your neighbor hood you are suppose talk with your neighbors .

    • landmatters Says:

      Ms. Burchell: Some level of notification to adjoining property owners for that kind of building activity is typically required in most communities, but the answer depends fully on the zoning and other codes in place in the particular community where you reside. The Atlanta Regional Commission is not involved in local zoning or land use decisions. We suggest you open a dialogue with your local planning and zoning staff on this issue.

  4. Heather B. Says:

    There is property in Catoosa county that was rezoned to R-1 (residential only) as of 1991, but carries grandfathered rights (livestock, etc) today. I am looking to purchase this property but am concerned that the “grandfathered” rights could be contested by neighbors should I place horses on the property. I’ve appealed to the current owner to apply for re-zoning to A-1 so that we’re covered but the county is now telling her she doesn’t need to waste her time or money because I can have my horses out there no problem. Sounds fishy.

    • landmatters Says:

      Heather: We appreciate your question, but the Atlanta Regional Commission is not involved in local zoning decisions in any jurisdiction. We suggest you open a dialogue directly with your local County planning and zoning staff on this issue. You may also want to consider speaking with an attorney who is familiar with zoning and development codes in Catoosa County. In addition, feel free to contact the Northwest Georgia Regional Commission, which consults with local governments on planning issues in Catoosa County and surrounding counties. See http://www.nwgrc.org/.

  5. Pete Minter Says:

    If the land use (Commercial RV Park) is vested (established prior to zoning), what changes to the park would be considered forfeiture of the vested rights?

    For example, could a portion of the land that the RV Park is on be subdivided without forfeiture of the vested rights?

    • landmatters Says:

      Thanks for your question. If the RV park does not conform to the current zoning and was grandfathered in as a non-conforming use, then the owner presumably has the vested right to continue operating this type of use in the same general configuration and at generally the same intensity; the zoning regulations likely do not allow the expansion of grandfathered, legal, non-conforming uses. The subdivision of a portion of the property and conversion to a different use probably would not be a significant enough modification to impact the owner’s vested right to continue operating the RV park positively or negatively. This would especially be true if the subdivision would mean a reduction (rather than an expansion) in the RV park’s operations. In any case, the new use for the subdivided parcels would almost certainly have to conform to the current zoning. However, the Atlanta Regional Commission is not involved in local zoning regulations and decisions. We suggest you open a dialogue directly with your local planning and zoning officials on this issue. You may also want to consider speaking with an attorney who is familiar with zoning and development codes in your area.

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