Cities and counties often require payments of one form or another as a condition to granting a permit to develop property. Thus, it has not been uncommon for property developers to make significant payments to the government to develop their property in a certain way. Just this past June, the United States Supreme Court put some limits of those cash demands.
In Koontz v. St. Johns River Water Management Dist. (2013) 133 S.Ct 2586, the Supreme Court held that monetary demands by a governmental agency in connection with the granting of a permit must have “a nexus and rough proportionality between the government’s demand and the effects of the proposed land use.”
In Koontz Coy Koontz, Sr., sought permits to develop a section of his property from St. Johns River Water Management District (District), which requires permit applicants wishing to build on wetlands to offset the resulting environmental damage. Koontz offered to deed to the District a conservation easement on nearly three-quarters of his property. The District rejected the offer and said that it would approve construction only if Koontz (1) reduced the size of his development and deeded to the District a conservation easement on the resulting larger remainder of his property or (2) hired contractors to make improvements to District-owned wetlands several miles away. Koontz rejected these conditions and filed suit
The U. S. Supreme Court overturned the Florida Supreme Court’s ruling in favor of the District reasoning that the District’s actions were unlawful because they failed the requirements of Nollan v. California Coastal Comm’n, 483 U.S. 825, 107 S.Ct. 3141, 97 L.Ed.2d 677, and Dolan v. City of Tigard, 512 U.S. 374, 114 S.Ct. 2309, 129 L.Ed.2d 304. In overturning the Florida Supreme Court the U.S. Supreme Court held that even if there was no actual taking of any property by the government, that monetary extractions from property owner must have a nexus and rough proportionality between the government’s demand and the effects of the proposed land use.
Although this is already the law in many states, it is a significant limitation on governmental control of development and the recognition of a significant right on the part of property owners and developers. This law now prevents governmental agencies from holding developers hostage to unreasonable and unrelated demands made in connection with applications for development. Now, although there will still be cash extraction and demands, those demand will have to relate to the actual effect that the development is having. This should result in increased development.
Prior to making any effort to develop property it is always a good idea to contact someone knowledgeable in the area. If you are looking at development, please give us a call. I am sure we can help.
If you or someone you know has a real estate matter and need(s) legal representation, give us a call. We would be happy to assist you. www.BrewerFirm.com. (650) 327-2900