Tina Wallis
Founder
Law Offices of Tina Wallis, Inc.
Tina Wallis, founder of the Law Offices of Tina Wallis, Inc., guides private and public sector stakeholders through CEQA compliance, land use entitlements, litigation challenging entitlements and permits, and due diligence for land use and environmental issues. She can be reached at twallislaw.com.
So you have a Conditional Use Permit (CUP). Now what? CUPs allow specific land uses such as quarries, asphalt plants, wineries, restaurants, schools, etc., subject to conditions of approval. It can be difficult to get CUPs because they are discretionary permits, subject to California's Environmental Quality Act. It's important to understand your permit and how your rights as the permit holder change over time. A use permit only gives the legal right to what is approved within it, nothing more. Said differently, as a business grows and changes over time, it's important to compare your business development and marketing plans to your CUP to be sure you remain compliant or must modify your use permit so your plans don't become code violations.
Conditions of approval
There are four general conditions applied to a CUP. First, you should carefully review your use permit and all conditions of approval before the use permit is approved. If you disagree with the conditions or they are an illegal overreach (this happens), you must raise these issues before the use permit is approved or during the administrative process. Once the use permit is approved, you have 90 days to challenge these conditions in court. If you do not file a court challenge to the conditions of approval, you cannot change them later unless you apply for modification. Courts have said that once a use permit holder accepts the benefits of a use permit, the permit holder cannot later complain about its burdens.
"Using" a use permit
The next stage of a use permit is actually using it. Many jurisdictions require use permit holders to exercise it within a specific time period, typically one or two years, but it's always wise to check the jurisdiction's code. For example, some jurisdictions also allow for a one-year extension, but you must check local code and request this extension well before the deadline. Courts have held that the purpose of the "use" requirement is to prevent people from obtaining permits when they have no intention of building or operating the approved use. Thus, using a permit has a much lower standard than vesting because courts recognize that significant work occurs before building permits are issued or physical construction begins. This pre-permit and pre-construction work--such as paying architects, engineers, having plans prepared, surveying, borings, etc.--satisfies the "use" requirement under the heading of "soft costs." Bottom line: Using a use permit only requires pre-permit and pre-construction activities, not physical construction.
Vesting your use permit or vested rights
The third stage is vesting your use permit and obtaining a vested right. Vested rights are constitutionally protected property rights and generally require physical construction, aka "hard costs." When someone spends a substantial sum of money in reliance on their permit--as with the construction of roads, driveways, septic systems, wells, and buildings--they have a vested right to what the permit authorized. For practical reasons, many permit holders request vesting recognition from their local jurisdiction, as doing so provides clarity to the permit holder and the county.
Fundamental vested right
The fourth stage is operating a business under the use permit. A fundamental vested right occurs after a use permit is used, vested, and a business is operating. The business must be lawfully established, and its operation is limited to what the use permit allows. Courts have ruled that the fundamental vested right to operate a lawful business in a legally compliant way is so important that the right cannot be extinguished by a nonjudicial body.
Enforcement
Understanding that businesses evolve but use permits do not is essential in ensuring you don't run afoul of an enforcement action you didn't expect. Absent obtaining a modified use permit, growing, expanding, or changing businesses may be subject to enforcement actions ranging from penalties to permit revocation. While enforcement actions are best avoided, should they arise, it is important to retain qualified legal counsel. A few basic ideas will help you during this process.
Standard of conduct
All public officials are subject to heightened standards of ethical conduct when prosecuting a public-nuisance abatement action. In an enforcement action, a public official is entrusted with the unique power of the government and therefore must refrain from abusing that power by failing to act in an even-handed manner. Fairness and objectivity are paramount, so the public has confidence in the enforcement process and can be sure there is no improper motivation or bias.
Unwritten requirements
An "underground regulation" occurs when an agency demands something not required by law or written down in an adopted policy. It typically applies to state agencies, but cities and counties can't impose unwritten requirements, either. A simple example could be an agency interpreting a use permit authorizing a dog kennel as being limited to dogs of a small size, even though size limits were not part of the use permit application or included in the conditions of approval.
In a recent real-life example, a county argued that it had a "compliance certificate program," and so every use permit holder must affirmatively contact the county and obtain a written certificate confirming that he or she had complied with 100% of its conditions of approval. This type of interpretation of written conditions of approval effectively amended the conditions of approval, without a hearing or due process, and so is prohibited.
In this same case, the county interpreted a 15-year-old use permit's conditions of approval in a way that added to the use permit's requirements. Underground amendments occur when an agency "interprets" a written law, code, regulation, or policy in a way that changes the requirement. Agency interpretations that change conditions of approval after this 90-day period are prohibited.
Additionally, in this same case, the use permit's conditions of approval required the permit holder to get ministerial building permits and pay development impact fees to comply with the use permit's conditions. Despite a requirement in the county code requiring the county to issue these permits and accept fee payments, the county refused. The county then argued that the use permit holder hadn't complied with the conditions requiring building permits and impact fee payments, so the use permit should be revoked. Any city or county, particularly in an enforcement action, must follow its own code.
Penalties
In California, the purposes of code enforcement penalties are simple: to punish and deter. This is why there is a grace period in every notice of violation, giving the property owner time to cure the violation before penalties accrue. Typically, this is 30 days, but there is no set legal standard. Agencies must use judgment when imposing penalties because courts have rejected the "adding machine" approach, where penalties accrue automatically and endlessly without judgment. Courts have also invalidated penalties where an aggressive enforcement agency treated penalty payments as a revenue stream and benefited financially from its aggressive enforcement tactics.
Permit to Success
It's important to avoid code violations, but when they occur, courts have said it is even more important that the enforcing agency be fair, objective, and intolerant of improper motivations. Anything less undermines public confidence in the enforcement process. Finally, landowners and permit holders should be educated about their permits and the law so the agency is accountable and the permit holder can achieve compliance in a fair and just way.