Can an Issued Land Use Permit be Revoked for 'Lack of Progress?'

Yes, under modern legal principles, if the statutory definitions, timetables, and requirements are met, a building or land use permit can be revoked by the issuing authority on the basis of "lack of progress." Under the older common law principles, this does not seem to be the case. Matters are further complicated by the fact that a local land use ordinance can have different requirements and can establish procedures that must be met before an issued permit can create vested and enforceable property rights. These are among the many reasons that it is essential to retain experienced North Carolina land use and zoning attorneys if you are seeking a building or land use permit. Here is a brief explanation of some of the legal principles with respect to revocation of permits based on "lack of progress."

Imagine that you want to develop a new business operating a campground or a sports hunting area. When you buy the acreage for your new business, there is no applicable county or local zoning or land-use statute. However, after purchase of the land, the relevant North Carolina County or municipality enacts a zoning/land use ordinance that forbids the operation of campgrounds and sports hunting businesses (or, maybe, puts sufficient limitations and restrictions on such businesses as to make your proposed business financially and economically nonviable).

Under the common law, the landowner has certain vested land rights. As such, the landowner may proceed with their business as long as, by the time the new ordinance is enacted, the following conditions apply:

• Substantial expenditures and obligations were made and incurred in furtherance of the development and
• Such were done so in good faith

The same rules apply if a permit of some sort was required and issued, but, let's say, the land use law was changed after issuance but before completion of the project. If that happens, the landowner holding a permit may proceed if the following conditions apply:

• Substantial expenditures and obligation were made
• In good faith reliance
• On valid governmental approval/permit
• Resulting in the party's detriment

Note that, in the latter circumstance, under these common law legal principles, there does not appear to be a basis for revoking an issued permit on the basis of "lack of progress." As long as "substantial expenditures and obligations were made," the vested right to finish the development project seems of indeterminate length.

Some of older common law legal principles have been "pulled forward" into modern statutory principles with respect to vested land rights. However, the indeterminateness of the older principles has been "fixed. Under N.C. Gen. Stat. § 160D-108(c), the rights created by a land use or building permit expire after one year unless the work authorized by the permit has "substantially commenced" by that time. So, if the project has not "substantially commenced" within a year, the permit expires for "lack of progress."

Further, even if the project has commenced, the vested property rights represented by the issued permit can expire if two conditions are met:

• The project is uncompleted and
• If work on the project was/has been intentionally and voluntarily discontinued for a period of at least two years

Note, however, that the two-year period is tolled -- does not run -- while proceedings are ongoing before a board of adjustment or while litigation is proceeding (including appeals).

This appears to be what happened with the permit that was issued to Maymead, Inc. for its "Deep Gap" asphalt plant in Boone, North Carolina. According to one news media report, “lack of progress” was the stated justification for attempting to revoke the issued permit in 2011 by the Watauga County Department of Planning and Inspections. However, the Watauga County Board of Adjustments overturned the revocation and, while litigation has been ongoing, the permit has remained valid after being issued more than a decade ago.

Note that under the statutory provisions, there are longer time periods for multiphase development projects. Such developments have seven years after substantially commencing before it is possible to revoke the issued permit for "lack of progress." There are also some complicated rules with respect to when the various times begin running. For example, section 160D-108(e) states that the issuance of an erosion or sedimentation control permit or a sign permit is not a permit that begins the running of the statutory periods.

As noted above, local ordinances must be checked since localities can modify the state statutory rules. For example, a local ordinance can provide for extended time periods during which a permit cannot be revoked for "lack of progress."

For more information, and to schedule a confidential consultation with experienced and dedicated zoning and land use attorneys in Charlotte, contact Arnold & Smith, PLLC. Use our “Contact” page or give us a call at 704-370-2828. We handle land use, zoning, and condemnation legal matters in Mecklenburg County and elsewhere in North Carolina. We have offices in Charlotte, Lake Norman, and Union County.