Opinion ID: 1990850
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Heading Rank: 4

Heading: Equitable Rights based on Prior Zoning

Text: We have held that when a municipality amends a zoning ordinance in a manner such that a once permitted use becomes illegal, the amendment can result in the revocation of permits that were issued under the previous ordinance. A. Ferland & Sons, Inc. v. Zoning Board of Review of East Providence, 105 R.I. 275, 278, 251 A.2d 536, 538 (1969). However, we also have held that when the permittee has incurred substantial obligations or made significant expenditures in reliance on the permit, or, if the actions of the permittee in reliance on the permit were such that equity favored his interest to that of the municipality, then he retained an equitable right to develop the subject land as if it were governed by the previous zoning law. A. Ferland & Sons, Inc., 105 R.I. at 279, 251 A.2d at 538; Tantimonaco v. Zoning Board of Review of Johnston, 102 R.I. 594, 597, 232 A.2d 385, 387 (1967); Shalvey, 99 R.I. at 699, 210 A.2d at 593. A brief discussion of the cases that developed that body of law is warranted here. In Shalvey, 99 R.I. at 693, 210 A.2d at 590-91, a developer sought and received building permits to construct multifamily homesa permitted useon four lots in Warwick. Some objectors appealed the issuance of the permits to the zoning board of review, and during the pendency of the appeal, the city council amended the zoning ordinance to allow only single-family homes in the area in question. Id. at 694-95, 210 A.2d at 591. The zoning board denied the appeals, reasoning that the building inspector already had issued the building permits, but it made no finding as to whether the permittee incurred any obligations or expenditures in reliance on the permit. Id. The dispute eventually found its way to this Court. Id. On appeal, this Court observed that it had not previously addressed whether a zoning amendment could authorize the revocation of a building permit issued for a formerly permitted use. Shalvey, 99 R.I. at 695, 210 A.2d at 591-92. We analyzed two cases, Harrison v. Hopkins, 48 R.I. 42, 135 A. 154 (1926), and Elmcrest Realty Co. v. Zoning Board of Review of Warwick, 78 R.I. 432, 82 A.2d 846 (1951), in which permits were issued, construction began, and then the applicable zoning ordinances were changed to render the use illegal. Shalvey, 99 R.I. at 696, 210 A.2d at 592. In those cases, we held that it was inequitable to prevent a landowner from completing construction commenced pursuant to a lawfully obtained building permit. Id. However, we did not pass on the question of whether the zoning change itself could authorize the revocation of a previous lawful permit. In Shalvey, relying on our prior holdings as well as persuasive authority from other jurisdictions, we held: It is    our opinion that building permits lawfully issued for a permitted use should be immune to impairment or revocation by reason of a subsequent amendment to the zoning ordinance when the holders thereof, acting in reliance thereon in good faith, initiate construction in some reasonable substantial measure or incur some reasonable substantial obligation promoting such construction. Id. at 699, 210 A.2d at 593-94. Our decision in Tantimonaco further defined the types of obligations and expenditures that could secure an equitable right. In that case, the zoning board approved and the building inspector issued a special permit for the construction of a gas station. Tantimonaco, 102 R.I. at 596, 232 A.2d at 386-87. The issuance of the building permit was appealed to the zoning board by neighboring residents, and, after the special permit again was approved, the case came to this Court by writ of certiorari. Id. While the case was pending before this Court, the town council amended the zoning ordinance, changing the classification of the site of the proposed gas station from business to residential, thus making a gas station an illegal use. Id. at 597, 232 A.2d at 387. The record revealed that the landowners had incurred substantial expenses before receiving the permit, both for legal fees associated with obtaining the permit and for work done to make the land suitable for the gas station. Id. at 598, 232 A.2d at 387. From these facts, this Court held that the expense of preparing the land before the permit was issued was an expense promoting construction under the rule announced in Shalvey. Tantimonaco, 102 R.I. at 601-02, 232 A.2d at 389-90. In arriving at this conclusion, we noted that expenses incurred before the building permit was issued were properly considered because the proposed use on the site, a gas station, was a permitted use under the zoning code as it existed at the time. Id. at 602, 232 A.2d at 389. We concluded that the landowner justifiably had relied on the existing code when he incurred those expenses, even though they were made before the building permit was issued. Id. Under those circumstances, we held that the owners had an equitable right to build the gas station. Two years later, this Court decided a case very similar to the case before us now. In A. Ferland & Sons, Inc., the zoning board of review granted a special permit to a landowner that allowed the construction of an eight-unit apartment building. A. Ferland & Sons, Inc. 105 R.I. at 276, 251 A.2d at 537. The zoning board attached several conditions, one of which was that construction was to begin within six months of the board's approval. Id. But, shortly after the special permit was issued, certain remonstrants appealed. Id. While that appeal was pending, the city council amended the zoning ordinance and special permits no longer were allowed. Id. Notably, the landowners had not begun construction, nor had they applied for a building permit sanctioned by the special permit while the appeal was pending. Id. at 279, 251 A.2d at 538. Eventually, after the appeal of the zoning board decision was dismissed by this Court, the landowners applied for a building permit but their application was denied because the intended use did not comply with the amendments enacted while the appeal was pending. Id. at 276, 251 A.2d at 537. The landowners then appealed the denial of the building permit. Id. That dispute eventually reached this Court. We held that the landowners had not incurred any obligations in reliance on the special permit, but merely had applied for a building permit. Id. at 279, 251 A.2d at 538. Therefore, the appeal challenging the issuance of the special permit did not immunize the permit from a revocation occasioned by a later zoning amendment. In the case now before us, plaintiffs sought and received approval for a subdivision based on a zoning ordinance that called for a minimum lot size of two acres. After the plan was approved, the zoning ordinance was amended, increasing the minimum lot size to three acres. The plaintiffs argue that their obligation to convey land to the town, with the amount of land to be conveyed based on the number of lots in the subdivision, was both substantial and was incurred in reliance on the approval of the subdivision. We disagree. The donation of land under the town ordinance in effect at the time of the subdivision application was a condition of approval. [5] The plaintiffs presented no evidence that any expenses were incurred to prepare the land to be developed, as was the case in Tantimonaco. See Tantimonaco, 102 R.I. at 598, 232 A.2d at 387-88. In stark contrast to the situation in Tantimonaco, plaintiffs in this case obtained approval to develop the land but then did nothing with it. See A. Ferland & Sons, Inc. 105 R.I. at 279, 251 A.2d at 538. Indeed, plaintiffs have not been prevented from developing its land at all. Delbonis still has five buildable lots on the east side of Beaver River Road as part of its subdivision that meet the zoning requirements for residential development. In our opinion, the mere fact that plaintiffs gained subdivision approval under the provisions of a particular zoning ordinance did not guarantee that those provisions would regulate that land forever or that the municipality was precluded from changing them. See id. at 278, 251 A.2d at 538. To secure an equitable right to preserve an approved plan in the face of a later zoning amendment, it was necessary for plaintiffs to demonstrate that they incurred substantial obligations or expenditures in reliance on the approval. See Shalvey, 99 R.I. at 699-700, 210 A.2d at 593-94. Here, plaintiffs did only what they were obligated to do to secure the subdivision approval and nothing more. No construction was commenced by plaintiffs and no building permits were sought. The record is devoid of evidence that plaintiffs took any action in reliance on the permit. Accordingly, they had no equitable right to maintain the two-acre lots that originally were approved in the subdivision plan, and the town lawfully merged the lots to bring them into conformity with the minimum lot-size requirements of the amended zoning ordinance.