A townhome developer’s success in a recent appeal reinforces the principle that municipalities and zoning officials must engage with developers in good faith.

The Commonwealth Court of Pennsylvania ordered new hearings to determine whether the governing body of a municipality was influenced by personal or arbitrary factors that could undermine the development process.

Background

In this recent case, a municipality denied a preliminary/final subdivision and land development plan for the development of townhomes. In its denial letter, the Board gave four reasons for the denial, including traffic issues, failure to establish undue hardship for two waivers, and failure to comply with the township’s noise ordinance.

The applicant appealed this denial to the Court of Common Pleas and alleged that the Board had not acted in good faith during its consideration, and ultimate denial, of the application. The trial court reversed the Board’s denial and remanded the matter back to the Board for further proceedings, by ordering the Board to approve the plans subject to the applicant’s modification of the plan to eliminate the need for the two waivers.

But the trial court did not directly address the assertion that the Board had not acted in good faith; rather, the trial court stated that its “order adequately addressed bad faith concerns by reminding the Board of its duty to review the revised application in good faith on remand.”

Appellate Ruling

On further appeal, the Commonwealth Court found that there was substantial evidence in the record to support the Board’s determination that there was no hardship for the two waivers and that the Board acted within its discretionary authority by denying the application.

However, the Commonwealth Court went on to hold that a municipality has a legal obligation to proceed in good faith in reviewing and processing development plans. The Commonwealth Court further noted that where a municipality has breached this duty and has instead acted in bad faith, that conduct can enable a court to approve the subject application, regardless of whether the plan conforms to the municipality’s SALDO.

The Commonwealth Court remanded this matter to the lower court so that it could address whether the Board abided by its duty of good faith in this matter and, if not, whether approval of this application is warranted in light of the Board’s otherwise valid denial thereof. The parties then settled the case.

Takeaway

This opinion confirms the obligation of a governing body to act in good faith in their review of subdivision/land development applications or risk court intervention.

For more information about this case, contact Rob Gundlach at 215.918.3636 or rgundlach@foxrothschild.com.