The Status of Florida Law on Contract Zoning: Practical Drafting Suggestions to Avoid Contract Zoning Claims in Settlement Agreements

In 1956, the Florida Supreme Court ruled that local governments cannot make secret deals with developers to change zoning laws in exchange for certain conditions. The case, Hartnett v. Austin, involved a challenge to the City of Coral Gables’ decision to rezone a property for commercial use. The court ruled that requiring future contracts between the city and the property owner to implement the rezoning conditions was vague and unlawful. This decision was made to prevent cities from giving up their power to make zoning decisions in exchange for private agreements with developers. When a municipality creates zoning laws, they have to be clear and consistent for everyone. They can’t be based on individual agreements between property owners and the government, or the whole point of zoning would be lost. Developers can make concessions to the government when applying for permission to build, but these concessions have to benefit the public, not just the property owner. These could include things like additional landscaping or limits on construction. Just because a developer offers these concessions doesn’t mean the government’s decision is automatically unfair. In two cases, property owners objected to nearby developments and the local government agreed to keep the existing zoning after the property owners made promises to develop their properties in a way that benefits the public. The court said it’s okay for property owners to make these promises as long as the local government’s decision is fair and in the public’s best interest. In both cases, the court upheld the decisions of the local governments. In one case, the court said it was okay for a property owner to offer restrictions on their property when they asked for a zoning change. But in another case, the court said it wasn’t okay because the property owner was trying to disguise a request for a special exception as a zoning change. There’s also a debate about whether local governments can approve zoning changes as part of a settlement agreement. In 1988, the Fourth District Court upheld a settlement agreement that required the City of Boynton Beach to approve a planned development once the developer filed a revised application. However, the Second District Court rejected a similar settlement agreement, saying that a local government can’t agree to support a specific action before a public hearing. After this, the Florida Legislature passed a law to protect private property rights in development, which could affect settlement agreements in the future. In this case, a property owner in Miami Beach got upset when the city put new rules on how tall their building could be. They complained and got special permission to build taller, but then some neighbors complained. The property owner and the city then made an agreement to let the building be taller again. But the court eventually said the special permission was not allowed. In another case, a company made a deal with Orange County, but the court said the deal wasn’t valid. So, even if you make a deal with the government, it might not always work out. In Morgran, the developer made a deal with the county. They promised to give 50 acres of land for a park, if the county helped them get permission to build on a different piece of land. But the county changed their mind because of worries about too many new houses and not enough schools. The court said that even if the county only promised to help with the permission, they still have to keep their word. The lesson is, be careful when making a deal with the county. Orange County made a deal with a company called Morgran to help them get approval to change the zoning for some land. But the court said that this deal is not allowed because it takes away the county’s power to make decisions about zoning. The court also said that even if the county said they wouldn’t honor the deal, the company can’t ask for their money back because they should have known the deal wasn’t allowed in the first place. If a zoning request gets denied, the landowner can ask the county to reconsider, but they have to do it within 30 days. Then they can work with the county to fix any issues and maybe add some extra things to make the project better for everyone. If a property owner wants to settle a dispute with the local government about zoning, they can talk to the government’s staff and members to find a solution. The government can’t be forced to do anything specific, but they can hold onto any benefits offered by the property owner until a decision is made. The settlement agreement will need to be approved at a public hearing. Hopefully, the Florida Legislature will make it easier for courts to handle zoning disputes, and the Florida Supreme Court will give clear rules for enforcing settlements in these cases. In the Molina case, the local government was required to approve certain laws related to a planned development. However, the court had a problem with this because it seemed like the decision was already made and the public hearings were not real. The Florida Legislature could make a new rule so that settlement agreements have to be reviewed and discussed by the local government, giving people a chance to object. Then, the court would have the power to decide if the agreement can go forward. People could also challenge the development approval through a special legal action. The Hartnett case showed that Florida courts are hesitant to approve contracts related to rezoning. It also set a standard for when a local government can impose conditions on development approvals. This means the government can require certain things to be done in order to approve a development, as long as it’s related to the impacts of that specific development. There have been many cases since Hartnett that have upheld these restrictions. When a local government denies a development request, there are ways for the decision to be reheard. The Florida Legislature has also recognized the importance of special masters in land use disputes. Mark A. Rothenberg is a lawyer at a firm in Irvine. He helps real estate developers and local governments in South Florida.

Source: https://www.floridabar.org/the-florida-bar-journal/the-status-of-florida-law-on-contract-zoning-practical-drafting-suggestions-to-avoid-contract-zoning-claims-in-settlement-agreements/