“Vested Right” Doctrine Explained

The Second Department concluded that the plaintiffs, who were seeking to effect a development plan under less restrictive R-3 zoning regulations, did not have a “vested right” in the plan such that the plan could be carried out after the area was rezoned to implement the more restrictive R-1 zoning regulations. Plaintiffs had negotiated a boundary change and had demolished some structures in furtherance of the development plan. The Planning Board, however, had never granted final unconditional approval of the plan. In explaining the “vested interest” doctrine, the Second Department wrote:

“In New York, a vested right can be acquired when, pursuant to a legally issued permit, the landowner demonstrates a commitment to the purpose for which the permit was granted by effecting substantial changes and incurring substantial expenses to further the development” … . “Neither the issuance of a permit . . . nor the landowner’s substantial improvements and expenditures, standing alone, will establish the right. The landowner’s actions relying on a valid permit must be so substantial that the municipal action results in serious loss rendering the improvements essentially valueless”… .”Reliance” is an essential element of the doctrine … . Although many cases speak in terms of reliance on permits …, a right may vest in certain situations when “subdivisions” have been given a “final grant of approval” … . Whether a planning board’s final unconditional approval of a site plan may, even in the absence of a building permit, satisfy the first prong of the test has not been settled in New York …, and it is not before us now. Matter of Exeter Bldg Corp v Town of Newburgh, 2014 NY Slip Op 00996, 2nd Dept 2-13-14