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As you might have noticed, I like to highlight recent court decisions showing how courts handle ag law issues. In a recent Wisconsin decision, the court held that a dairy LLC did not have a vested right to use the land for a planned dairy operation. In a prior decision, the court had found a vested right to build barns based on filing a building permit. Although this can create a conflict -- that is, the ability to build the barns but not use the land for their stated purpose -- Maryland law allows for solutions to protect landowners in these situations.
In Golden Sands Dairy LLC v. Town of Saratoga, Golden Sands was trying to develop a dairy using 6,388 acres within the city limits of Saratoga. The dairy had filed a building permit to develop seven dairy buildings on the land. After filing the permit application, the town enacted different zoning regulations, making the planned dairy operation a nonconforming use. In an early decision, the Court of Appeals of Wisconsin found the dairy had a vested right to a building permit to develop seven dairy buildings on the land. In this most recent decision, the dairy also argued to have a vested right to use the property as a nonconforming use by filing the building permit.
The only issue in this appeal was whether the dairy had a vested right to use the 6,388 acres of land for the dairy operation based on the building permit application. The dairy argued that the vested right to a building permit allowing for the construction of the dairy buildings carried a vested right to use the land as identified in the permit application. In other words, once the dairy received a vested right in building permit, it also got a vested right to utilize the property identified in the permit application for the dairy. The town argued that the dairy had no right to use the land as a nonconforming use and the dairy could not allowed use property in conflict with the current zoning classification. In other words, the dairy could build the buildings but that right did not extend to using the remaining property as a dairy.
In reviewing the case, the court determined that there is a difference between a vested right which comes with submitting a building permit and a vested interest for a nonconforming use that existed before the new zoning ordinance. A nonconforming use is when a property owner lawful uses the property before the zoning ordinance change. According to the court, Wisconsin has never dealt with the issue of whether a vested right from a building permit extends to the related property use. None of the cases cited by the dairy addressed the issue of whether a building permit extends vested rights to the land identified in the permit.
The court saw giving vested rights to land associated with a building permit application as creating issues not addressed in the permit application. The application did not require the dairy to state how much land the dairy needed out of the 6,388 acres. Did the dairy need all 6,388 acres? The other issue was the application did not address ownership of the property. Did the dairy own or lease all 6,388 acres?
The dairy pointed to a court decision where a property owner received substantially vested rights in property use when the owner incurred substantial expenses in developing plans for an apartment complex. The expenses were incurred before a zoning change which prohibited the building of an apartment building. In that case, the court allowed the building to proceed based on the owner reasonably relying on the existing zoning ordinances when incurring expenses. The Golden Sands Dairy LLC v. Town of Saratoga court rejected this argument because the dairy had not pursued this theory at trial, so it could not use it in the appeal.
Ultimately, the appeals court reversed the lower court’s decision and ruled for the town. The dairy did not have a vested right to use the property for a nonconforming use.
Why should you care? I highlight this case to demonstrate how courts may see this issue. This case represents an odd result which can happen from time to time: you get the right to build the barn but may not use the land for the associated agricultural purpose.
In Maryland, one way to combat this result would be for the landowner to execute a “development rights and responsibilities agreement” (DRRA) with the county. An executed DRRA allows the landowner to utilize the property according to the rules in force at the time of execution (§ 7-304(a)). Executing a DRRA with the county would be one way to ensure that what happened to Golden Sands Dairy does not happen to you and your farm.
Golden Sands Dairy LLC v. Town of Saratoga, No. 2015AP1258, 2017 WL 1372507 (Wis. Ct. App. April 13, 2017).
Md. Code Ann., Land Use §§ 7-301 to 7-307 (West 2017).