Governor Perdue signed into law an amendment to O.C.G.A. § 44-5-40 overturning BBC Land & Development, Inc. v. Butts County, 281 Ga. 472, 640 S.E.2d (2007) decided by the Georgia Supreme Court on January 8, 2007. BBC Land & Development, Inc. that had held that vested rights to develop property in accordance with prior zoning were personal to the owner of them and are not transferable with the land.
The Home Builders Association of Georgia and others were concerned that this decision would completely change the normal process of residential development in Georgia and lobbied the State Legislature for a legislative remedy.
As amended, O.C.G.A. § 44-5-10 simply reads:
Future interests or estates are descendible, devisable, and alienable in the same manner as estates in possession.
Keep reading for GZB’s summary of the now legislatively overturned BBC Land & Development, Inc. v. Butts County.
BBC Land & Development, Inc., (BBC) and JohnScar, LLC, (JohnScar) each bought property in Butts County to develop. The property was zoned R-1-C, which at the time of the purchases required only a minimum home size of 1,500 square feet. Both developers submitted plats showing houses of that size. After the County approved the plats, both developers expended money to develop the properties. The County then amended its zoning ordinances to increase the minimum house size from 1,500 to 2,000 square feet in R-1-C. After the zoning ordinance was amended, BBC and JohnScar sold the property to HTB Builders, Inc. (HTB) to continue development.
Based upon the previously approved plats, HTB applied for building permits to begin construction. However, the County denied the permit applications on the ground the planned houses now did not comply with the amended 2,000 square foot limit. BBC, JohnScar, and HTB sued Butts County seeking injunctive relief, mandamus, declaratory judgment, and damages.
The trial court held that the BBC and JohnScar had acquired vested rights to build on the property in accordance with the prior 1,500 square foot home minimum zoning, but concluded that those vested rights were not transferable to the subsequent purchaser, HTB. BBC, JohnScar, and HTB appealed to the Supreme Court of Georgia, arguing that a landowner’s vested right to develop land in accordance with previous zoning attaches to the land and benefits a subsequent purchaser.
BBC, JohnScar, and HTB admitted on appeal that there is no Georgia law establishing their proposition and argued instead that vested rights are analogous to nonconforming uses, and since nonconforming uses run with the land to the benefit of successors in title, so should vested rights of the landowner.
However, the Supreme Court noted three crucial differences between a nonconforming use and a landowner’s vested right to build in accordance with prior zoning. The first crucial difference between vested rights and nonconforming uses is temporal. Nonconforming uses are uses of structures which were existing prior to the enactment of an ordinance making them nonconforming. A use which is merely contemplated for the future, but unrealized as of the effective date of the regulation does not constitute a nonconforming use. By contrast, a landowner’s vested right to build in accordance with previous zoning relates to the future, to an unrealized use of land.
The second crucial difference is the degree to which each is defeasible. A vested right is one which cannot be divested without consent. A nonconforming use, however, is not so indefeasible since a governing authority can require a nonconforming use to be terminated in a reasonable time.
The third and most important difference is the way vested rights and nonconforming uses come into being. Vested rights to develop property in accordance with prior zoning and in contradiction to current zoning come into being because the owner has made a substantial change of position in relation to the land, has made substantial expenditures, or has incurred substantial obligations. Nonconforming uses come into being initially as legal uses and become nonconforming because of a subsequent change of zoning. Vested rights to develop property in accordance with prior zoning come into being because of the investment of the owner and may be seen as the property of the owner. However, a nonconforming use develops because of actions of the governing authority, not due to any action of the owner, and becomes part of the character of the property.
Based on the differences between nonconforming uses and vested rights to develop property in accordance with prior zoning, the Supreme Court concluded that vested rights to develop property in accordance with prior zoning are personal to the owner of them and are not transferable with the land.
BBC Land & Development, Inc. v. Butts County, 281 Ga. 472, 640 S.E.2d (2007).