8B— June 22 - July 12, 2012 — Mid Year Review — Mid Atlantic Real Estate Journal
www.marejournal.com
By Steven T. Boell and Erich J. Schock, Fitzpatrick Lentz & Bubba, P.C. Acquiring an Approved Project? Build a Basic Checklist P ENNSYLVANIA C OMMERCIAL R EAL E STATE L AW
W
hile the purchase of an approved (or partially approved)
governmental proceedings or the need to file a new applica- tion. While some municipalities allow minor modifications of plans to be reviewed and approved ad- ministrative- ly or through an amended plan submis- sion, not all municipalities provide these simplified procedures. The composition of political bodies changes and that turn- over brings new personalities (and new individual agendas).
As mentioned, modifications may provide opportunity for further municipal review. A plan that had been favorably received by a prior board may be met with opposition by its successor. For example, we en- countered an instance where a former objector was elected to the governing body during the course of the approval process. Even changes in municipal staff can impact the project, as modifications bring an op- portunity for staff to look to apply new, more onerous zoning ordinances or preferences. The conditions of a prior ap- proval must also be reviewed. If
an approval remains subject to conditions, the conditions can range from significant fees to obligations to construct costly public improvements. Condi- tions can also create ongoing obligations and restrictions. For example, while your prede- cessor may have been agreeable to conditioning an approval on limiting hours of operation, the impact can be devastating to your intended operation. The enforceability of condi- tions is not always straight- forward. We have encountered conditions which cross-refer- ence ordinances that are no longer in effect. Also, the con-
ditions imposed to mitigate the effect of a zoning approval may become an issue when ordinance amendments take effect that conflict with the con- ditions (or even eliminate the right to make an approval sub- ject to the conditions). Notice of these conditions, often, will not show up in a title search. The obligations can be included in plan notes, within the text of decisions and within what are referred to as “developer” agreements. Finally, due diligence must closely consider how long the permits are valid and when changes in the zoning ordi- nance can be applied. Munici- palities can require that if construction is not commenced within a defined period (typi- cally one year) the approvals will be deemed void. Further, under Pennsylvania law, if the public improvements for a project are not “substantially complete” within five years, changes in the zoning ordi- nance (including those relat- ing to use, project layout and density) can be applied even absent a modification. This five-year period does not run from the date that the plan is recorded but rather from the date of preliminary approval. The PAPermit ExtensionAct provided relief regarding the duration of permits. By law, it provides that the periods imposed by ordinances and cer- tain other laws will be “tolled” through July 2, 2013. However, the law includes exceptions and its application in certain instances remains unclear or the subject of controversy. For example, the PADepartment of Environmental Protection is- sued guidance stating that the Permit Extension Act is inap- plicable to NPDES permits. There are significant oppor- tunities in acquiring a “pre- approved” project. However, extensive due diligence by the developer, its legal counsel and engineers is a must to ensure that the approvals are viable, suitable and appropriate for the intended development. Erich J. Schock is a share- holder and chair of the Fitzpatrick Lentz & Bubba, P.C.’s Real Estate, Land Use & Development group. Steven T. Boell, an attor- ney in the Fitzpatrick Lentz & Bubba, P.C.’s Real Estate, Land Use & Development and Healthcare groups. ■
project pro- vides obvious advantages, careful due diligence is warranted to ensure that previously is- sued permits are appropri-
Erich J. Schock Steven T. Boell
ate, viable, and sustainable. The suitability of the ap- proved designmust be carefully studied. Even a minor modifi- cation to a design can trigger requirements for additional
FITZPATRICK LENTZ & BUBBA, P.C. PROUDLY SHARES THIS ANNOUNCEMENT
Joseph A. Fitzpatrick, Jr.
Edward J. Lentz Joseph A. Bubba
Douglas J. Smillie EmilW. Kantra
were selected for inclusion in 2012 Pennsylvania Super Lawyers . Only 5% of lawyers in the state were selected.
J. Bryan Tuk Joshua A. Gildea
Lisa A. Dougherty Marie K. McConnell
were selected for inclusion in 2012 Pennsylvania Super Lawyers - Rising Stars edition. Only 2.5% up-and-coming attorneys in the state were selected.
Since 2004, 13 FL&B attorneys have been selected for inclusion in Pennsylvania Super Lawyers , more than any other law firm in the Lehigh Valley.
Stabler Corporate Center • Center Valley, PA 610-797-9000 • www.FLBLaw.com
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