Parties: Neighborhood Nonprofit Housing Corporation and Perry City

Issued:  October 17, 2024, Amended January 10, 2025

...

Entitlement to Application Approval (Vested Rights)

Requirements Imposed on Development

Compliance with Land Use Regulations,

 

The approval process for a final plat is the one in place at the time of the review. The vesting laws which would lock the property owner’s application into ordinances in place at the time of the initial preliminary plat application create entitlements for the application held as a property right, intended to protect the owner from future detrimental land use changes. Where an applicant waives its vested rights to be reviewed under prior ordinances, a city may not otherwise compel the outdated process.

 Advisory Opinion[1]

Issue

Which process governs approval of a final plat application – the one in place when the preliminary plat was submitted, or the one in conformance with the now-amended state law?

Summary of Advisory Opinion

A property owner has secured preliminary plat approval for their proposed residential subdivision but has not yet submitted a final plat application. The city’s ordinances in place when the preliminary plat application was submitted dictate that city council must approve the final plat. However, the state legislature recently enacted legislation requiring adoption of a new subdivision approval process statewide that proscribes plat approval by a city council. This new legislation took effect February 1, 2024, before the property owner submits the final plat application.

The city maintains that the plat application vests in the laws in place at the time the preliminary plat application was submitted, which includes securing final plat approval by city council, and that the city must therefore review the application under this outdated process. On the other hand, the property owner maintains that they will be submitting the final plat application after the new state law amendments take effect, and that the existing, outdated process would then violate state law and therefore is unlawful.

We find that the city may not require approval of a final plat application by city council where the property owner is not requesting such. The vesting laws which would lock the property owner’s application into ordinances in place at the time of initial preliminary plat application create entitlements for the applicant held as a property right, intended to protect the property owner from future detrimental land use law changes. Where an applicant waives its vested rights to be reviewed under prior ordinances, a city may not otherwise compel the outdated process.

Evidence

The following documents and information with relevance to the issue involved in this Advisory Opinion were reviewed prior to its completion:

1. Request for an Advisory Opinion submitted by Christopher Harrild on behalf of the Neighborhood Nonprofit Housing Corporation on March 19, 2024.
2. Response letter from Bill Morris, Perry City Attorney, received April 9, 2024.
3. Timeline submitted by Christopher Harrild on April 17, 2024.

Background

Neighborhood Nonprofit Housing Corporation (Property Owner) seeks approval of a subdivision of land owned in Perry City (City). The core of the dispute is who has authority to approve the final plat.

As is fairly standard, the Property Owner submitted the preliminary plat for approval some time before the final plat application will be submitted. The applicable city ordinances in place when the preliminary plat application was submitted dictate that City Council must approve the final plat. However, state law was recently amended to streamline the plat approval process statewide, requiring each city to enact a new subdivision ordinance that, among other things, no longer allows city council approval of plats. This state legislation was enacted with a delayed effective date to give local governments time to adopt new subdivision ordinances that comply with the state’s directive.

The City maintains that the plat application vests in the laws, ordinances, and processes in place at the time the complete preliminary plat application was submitted, which includes securing final plat approval by City Council. This is consistent with established vesting laws. On the other hand, the Property Owner maintains that they will be submitting the final plat application after the new state law amendments take effect, and that the existing process would then violate state law and is therefore unlawful. The Property Owner maintains that the final plat application must be reviewed under the streamlined process which conforms with the changes made in state law.

A brief history is as follows:

Timeline
March 23, 2023	S.B. 174 (2023) enacted. The bill requires a new statewide subdivision approval process to be adopted by ordinance that proscribes city council approval of final plats. The bill’s provisions regarding the new subdivision approval process have an effective date of February 1, 2024, for City. [2]
July 25, 2023	Preliminary Plat Application. Preliminary plat application made complete by payment made following application review with City staff. Concept review and preliminary plat application submitted earlier.
October 25, 2023	Preliminary Plat Approval. Following City Planning Commission review and recommendation for approval, the City Council reviewed and approved the preliminary plat.
February 1, 2024	New state law in effect. New state law prohibiting plat approval by city council goes into effect as Utah Code § 10-9a-604.1.
Anticipated future date	Final Plat Application. Property Owner will submit final plat application after the new state law goes into effect.

Before the final plat application will be submitted, the new state law went into effect, making plat approval by City Council unlawful. Regardless, the City has determined that vesting laws require that the final plat application be processed under the same procedures in place when the preliminary plat was submitted.

The Property Owner has accordingly requested this Advisory Opinion to answer whether the City Council may be the approving land use authority for a final plat application submitted after state law makes this practice unlawful.

Analysis

I.     City may not require final plat approval by City Council because state law clearly makes this approval unlawful after the effective date and the property owner is not exercising their vested right to have the plat approved under the prior process.

This Advisory Opinion answers which process governs approval of a final plat application – the one in place when the original plat application was submitted, or the one in conformance with the now-amended state law. On the surface, it appears that State law gives us contradictory direction. On the one hand, reliance on vesting laws would support applying the ordinances and processes in place at the time the preliminary plat application was made (which includes approval of the final plat by City Council). On the other hand, the City cannot impose a requirement that violates state law (which makes requiring approval by City Council unlawful). When we dig a little deeper, however, it becomes clear that the City’s land use application review and approval process must comply with current state law, and that an applicant with an application vested under a prior regulation may choose to have the City review that application under vested law, or alternatively to opt-in to the new process the City is required by law to follow under updated regulations.

A.   Utah vesting laws intended to protect property owners.

“The law of vested rights and estoppel must strike a fine balance between the competing interests of the developer and the municipality. A developer needs some protection from changes in land use requirements that prevent him from completing his project or that make completion more expensive. Municipalities need the freedom to revise their land use requirements to meet new land use problems or to implement new land use policies.” EVOLVING VOICES IN LAND USE LAW: A FESTSCHRIFT IN HONOR OF DANIEL R. MANDELKER: Part IV: Discussions on the State and Local Level: Chapter 7: Federalism: Vesting Verities and the Development Chronology: A Gaping Disconnect?, 3 Wash. U. J.L. & Pol'y 603.

The original common law doctrine of vesting required a developer to obtain a building permit and engage in some construction in substantial reliance on the permit approval before the laws and ordinances were locked in. See, e.g. id. Vesting laws across the United States are facing reform, however, because this original stance ignores the substantial investment made by the property owner before the application is even made. Id.

Utah vesting laws protect property owners. A land use application, such as a subdivision plat, is generally entitled to consideration under the ordinances in place when the application is filed, even if the ordinances are subsequently changed. This is consistent with other states offering the most protection to property owners. See generally, id.

This protection is codified and specifically articulated in Utah Code § 10-9a-509(1)(a) which reads “(1)(a)(i) An applicant who has submitted a complete land use application as described in Subsection (1)(c), including the payment of all application fees, is entitled to substantive review of the application under the land use regulations: (A) in effect on the date that the application is complete; and (B) applicable to the application or to the information shown on the application” (emphasis added).

Utah Courts also dictate this favor for the property owner. When looking to “strike the proper balance between public and private interests . . . we hold . . . that an applicant for subdivision approval or a building permit is entitled to favorable action if the application conforms to the zoning ordinance in effect at the time of the application. . .” Western Land Equities v. Logan, 617 P.2d 388 (1980). This approach was contrary to the majority rule then in effect, with the Utah Supreme Court showing clear support for the property owner. The principle of vesting “estops a government entity from exercising its zoning powers to prohibit a proposed land use when a property owner, relying reasonably and in good faith on some governmental act or omission, has made a substantial change in position or incurred such extensive obligations or expenses that it would be inequitable to deprive the owner of his right to complete his proposed development.” Id.

In other words, Utah’s early vesting laws are intended to protect property owners from a land use authority that would seek to change the rules midstream. See id. at 396. It protects property owners from changes when the “enforcement of the new ordinance in those circumstances would be unfair and inequitable.” Id.

The vesting laws which lock a property owner’s application into laws in place at the time of initial preliminary plat application create entitlements for the applicant held as a property right, intended to protect the property owner from detrimental zoning changes. It is axiomatic that this early vesting law cannot be used restrictively against the property owner. The vesting law prevents a City from imposing a new regulation on a property owner against the owner’s wishes that came into effect after the application became vested. That same vesting law, however, does not give the City authority to impose an outdated regulation with which an applicant does not want to comply, if a new regulation is more favorable to the land use application.

B.   New statutes streamlining plat approval process intended to protect property owners.

In 2023, the Utah Legislature adopted Senate Bill 174 which adopted several changes on a variety of topics clarifying and standardizing how a municipality can regulate land use applications. As relevant to this discussion, this included adoption of Utah Code § 10-9a-604.1 which creates a new framework for the review and approval of subdivision plats.

Among other restrictions, the new process stipulates that the “administrative land use authority” designated for final plat review may not be the city council. Utah Code § 10-9a-604.1(9) reads: “A municipality shall review and approve or deny a final subdivision plat application in accordance with the provisions of this section and municipal ordinances, which: (a) may permit concurrent processing of the final subdivision plat application with the preliminary subdivision plat application; and (b) may not require planning commission or city council approval” (emphasis added).

The effective dates of the relevant changes made by Senate Bill 174 (174) and enacted through the creation of Utah Code § 10-9a-604.1 were phased in, with the change in question being triggered on February 1, 2024. See Utah Code § 10-9a-604.9(2) (2024)which reads “For a specified municipality. . . Sections 10-9a-604.1 . . . do not apply until February 1, 2024.”

In summary, effective February 1, 2024, state law prohibits approval of the final plat by the City Council.

C.   City may not enforce illegal ordinances where the Property Owner is not exercising vested rights to outdated process.

Municipal land use ordinances, including those outlining the process for final plat approval, may not contradict state law. Utah Code § 10-9a-104(2) states “. . . a municipality may not impose a requirement, regulation, condition., or standard that conflicts with a provision of this chapter, other state law, or federal law.”

In plain English, the City may not require that the city council approve a final plat after February 1, 2024, because this would violate state law. We note, however, that the Property Owner has the option of exercising their vested rights to have the final plat reviewed under the prior process even where state law has subsequently changed.

Therefore, we find that the City may not require approval of a final plat application by city council where the Property Owner is not exercising their vested right to the now-amended process. The vesting laws which would lock the property owner’s application into ordinances in place at the time of application are intended to protect the property owner from zoning changes and may not instead be used against them. It follows therefore that if a land use application is vested under an outdated, but nonetheless vested, land use regulation, the applicant may choose to comply with the rules under which the application is vested, or to opt-in to the updated, current law that is more favorable to the applicant’s development proposal. In this case, the applicant is choosing to opt in to the amended process.

Conclusion

The City may not require approval of a final plat application by the city council. The vesting laws which would lock the Property Owner’s application into ordinances in place at the time of initial preliminary plat application are intended to protect the property owner from zoning changes and may not instead be used against them. Any plat application processed after the effective date of state law amendments must abide by the new state laws unless the Property Owner exercises their vested right to the prior process.

...

Jordan S. Cullimore, Lead Attorney

Office of the Property Rights Ombudsman

...

NOTE:

This is an advisory opinion as defined in § 13-43-205 of the Utah Code. It does not constitute legal advice and is not to be construed as reflecting the opinions or policy of the State of Utah or the Department of Commerce. The opinions expressed are arrived at based on a summary review of the factual situation involved in this specific matter and may or may not reflect the opinion that might be expressed in another matter where the facts and circumstances are different or where the relevant law may have changed.

While the author is an attorney and has prepared this opinion in light of his understanding of the relevant law, he does not represent anyone involved in this matter. Anyone with an interest in these issues who must protect that interest should seek the advice of his or her own legal counsel and not rely on this document as a definitive statement of how to protect or advance his interest.

An advisory opinion issued by the Office of the Property Rights Ombudsman is not binding on any party to a dispute involving land use law. If the same issue that is the subject of an advisory opinion is listed as a cause of action in litigation, and that cause of action is litigated on the same facts and circumstances and is resolved consistent with the advisory opinion, the substantially prevailing party on that cause of action may collect reasonable attorney fees and court costs pertaining to the development of that cause of action from the date of the delivery of the advisory opinion to the date of the court’s resolution. Additionally, a civil penalty may also be available if the court finds that the opposing party—if either a land use applicant or a government entity—knowingly and intentionally violated the law governing that cause of action.

Evidence of a review by the Office of the Property Rights Ombudsman and the opinions, writings, findings, and determinations of the Office of the Property Rights Ombudsman are not admissible as evidence in a judicial action, except in small claims court, a judicial review of arbitration, or in determining costs and legal fees as explained above.

The Advisory Opinion process is an alternative dispute resolution process. Advisory Opinions are intended to assist parties to resolve disputes and avoid litigation. All of the statutory procedures in place for Advisory Opinions, as well as the internal policies of the Office of the Property Rights Ombudsman, are designed to maximize the opportunity to resolve disputes in a friendly and mutually beneficial manner. The Advisory Opinion attorney fees and civil penalty provisions, found in § 13-43-206 of the Utah Code, are also designed to encourage dispute resolution. By statute they are awarded in very narrow circumstances, and even if those circumstances are met, the judge maintains discretion regarding whether to award them.

...

Endnotes:

___________________________________________________

[1] This Advisory Opinion was initially issued on October 3, 2024. In the Opinion, we discuss the effective date of S.B. 174 (2023) which is December 31, 2024, generally, but February 1, 2024, for Specified Municipalities. The original opinion failed to recognize Perry City as a Specified Municipality, and therefore, subject to the February 1, 2024, effective date. This has been corrected. The correction does not change the analysis and conclusions of the opinion.

[2] This date is February 1, 2024, for specified municipalities which are defined as follows: (f) "Specified municipality" means: (i) a city of the first, second, third, or fourth class; or (ii) a city of the fifth class with a population of 5,000 or more, if the city is located within a county of the first, second, or third class.

City is a city of the 5^th class, due to its population of under 10,000, in Box Elder County which is a county of the 3^rd class, due to its population under being between 40,000 and 1,000,000. Therefore, it is a specified municipality, and is subject to the February 1, 2024, effective date.

Municipalities meeting the population requirements to be designated as Specified Municipality are subject to a February 1, 2024, effective date. See Utah Code §§ 10-2-301 and 10-9a-604.9 (2024).