City’s fair notice ordinance to establish vested rights deemed preempted says 4th Court of Appeals.

 

City of San Antonio v. Greater San Antonio Builders Association and Indian Springs LTD, 04-13-00013-CV (Tex. App. – San Antonio, November 20, 2013).

This is a vested rights case under Chapter 245 of the Texas Local Government Code. The City of San Antonio appealed from a declaratory judgment invalidating its fair notice ordinance and the San Antonio Court of Appeals affirmed.

In relation to permits for development, the City passed an ordinance requiring the applicant to fill out a specific City form which flags the permit for the City to recognize vested rights. The purpose is “to provide standard procedures for an applicant to accrue rights under Chapter 245 of the Texas Local Government Code.”  The Plaintiffs are organizations whose members include individuals and entities who are concerned with issues affecting the real estate industry in the greater San Antonio area or who own real property in the City. In a separate interlocutory appeal, the Plaintiff’s standing was affirmed and they were permitted to proceed at the trial court level. The Plaintiffs filed traditional summary judgment motions (2 of them on different issues) which the trial court granted. The City appealed.

The City asserted the fair notice ordinance ensures it will have enough information about a project to determine whether the project has changed and, therefore, is subject to current development regulations. GSABA and Indian Springs countered that the fair notice ordinance allows the City to prevent owners from obtaining or utilizing vested rights that have already been authorized by the legislature under Chapter 245. The City conceded it would not recognize a vested right without the fair notice form since its absence makes an application incomplete.  However, the court held that Chapter 245 expressly defines the documents and information that cause the accrual of a vested right. Tex. Loc. Gov’t Code. § 245.002(b)(West 2011). The City’s form requires additional information beyond what is recognized in the statute and therefore fails to recognize rights which vest under state law. Unfortunately, the court then held that since the City did not present the severance clause argument in response to the summary judgment, they could not do so on appeal. The entire ordinance is therefore invalid.  This seems a little extreme since the law is the law and whatever provision may be invalid, the presence of a severance clause separates it as an operation of law.  But the 4th Court did not see it that way and invalidated the entire ordinance.

If you would like to read this opinion click here.