Legal pendulum’s still swinging in developers’ favor

Shortly after the catastrophic events of Sept. 11, 2001, in an article for these pages entitled, “Legal Pendulum Swings In Favor of Developers,” I offered the observation that recent case decisions applicable to real estate development in New Hampshire suggested yet another change to which we might need to react to confidently move forward in our changed world.

Noting that the trend toward ever-increasing local, state and federal laws and regulations pertaining to zoning, site plan review, subdivisions, land sales and environmental issues appeared to have been altered — like a slightly detectable shift in the tectonic plates — by the decision of the New Hampshire Supreme Court in Simplex Technologies v. Town of Newington, I ventured the prediction that a new trend was emerging in the law of zoning variances.

The Simplex case set a new standard for the so-called “hardship test,” one of five necessary required elements or findings to support the granting of a variance from the provisions of a zoning ordinance. The court relaxed the former, more restrictive, requirement that an applicant for a variance demonstrate that a literal enforcement of the land use or dimensional requirements of the ordinance would effectively prevent the owner from making any reasonable use of the land to establish unnecessary hardship.

In Simplex, the court crafted a three-pronged test for determining hardship:

• The zoning restriction as applied to the property interferes with the reasonable use of the property

• No fair and substantial relationship exists between the general purposes of the ordinance and the specific restriction on the property

• The variance would not injure the public or private rights of others.

The pendulum’s arc continued with Hill v. Town of Chester, which relaxed the prior standard applied to situations in which the applicant’s hardship was “self-created” because the applicant “purchased with knowledge” of the zoning restrictions that required a variance.

In Hill, the court declared that such a factor was non-dispositive, and could be offset by evidence of the landowner’s good faith in seeking the variance.

The momentum accelerated with two cases that sought and then drew a distinction between use variances and area (or dimensional) variances, and established new criteria for the latter.

In a concurring opinion to the court’s decision of Bacon v. Town of Enfield, the concurring justices suggested that there should be a distinction between use variances under the Simplex standard, and variances based on strict compliance with physical standards, such as setback limitations.

For area variances, they suggested that courts and zoning boards must balance the financial burden on the landowner, considering the relative expense of available alternatives against the other factors enumerated in Simplex. This rationale was soon adopted by the court in Boccia v. City of Portsmouth.

The hardship criteria enunciated for area variances by the court in Boccia were twofold:

• Whether the variances are necessary to enable the applicant’s proposed use of the property given the special conditions of the property

• Whether the benefit sought by the applicant can be achieved by some other method reasonably feasible for the applicant to pursue, other than an area variance.

Continuing arc

The pendulum is now located on its continuing arc, as indicated by the very recent decision of Harrington v. Town of Warner, in which the court refined and discussed the distinction between use and area variances:

“The critical distinction between use variances is whether the purpose of the particular zoning restriction is to preserve the character of the surrounding area and is thus a use variance. … If the purpose of the restriction is to place incidental physical limitations on an otherwise permitted use, it is an area restriction.”

While the Harrington decision remains subject to reconsideration, and while each case is necessarily determined based on its own particular facts, it is noteworthy that the progression of these cases has taken the law of variances in a consistent direction, very clearly defining the criteria to be applied by boards and courts, and met by landowners and developers, in resolving the age-old tension between the public interest in, and private rights to, the use and enjoyment of land.

Donald E. Gartrell, a founding member and shareholder-director of Gallagher, Callahan & Gartrell, Concord, represents business clients in a wide variety of matters primarily related to real estate development, municipal law and taxation.

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