How the Vested Rights Doctrine Protects Real Estate Owners

The vested rights doctrine can protect landowners and developers when a local government issues a building permit, but then later attempts to stop the building from being completed. The landowner may have relied in the initial building permit and spent a substantial sum on the real estate project. Can the local government simply revoke the permit, or does the landowner have the right to complete construction?

The Vested Rights – The Basic Doctrine

If the landowner receives a permit based on accurate plans, and the local government later attempts to the revoke a permit, the vested rights doctrine may apply.

In Town of Paradise Valley v. Gulf Leisure Corporation, a special use permit was issued allowing construction of a resort. The construction proceeded slowly, so the developer requested extensions on the building permits. The town refused to extend the permits, which effectively stopped the development.

The court based its ruling on the vested rights doctrine, which protects the right of a landowner originally given a permit, whenever the builder incurred any substantial change of position, expenditures, or obligations in reliance upon a building permit.  Because the developers had already spent considerable money on the project, they were allowed to continue with the development.

 

The vested rights doctrine is applied based on all the facts of a particular situation, and courts are cautious about extending that doctrine. However, it can provide an effective resource for real estate owners and developers who invest their time in money into a project based on a building permit, only to later have it revoked by the local government.

Chernoff Law Firm handles real estate disputes throughout Arizona. Schedule a consultation with one of our real estate lawyers by calling 480-719-7307.

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