Town’s variance denial was regulatory taking, says Massachusetts jury

Application of local zoning laws and the denial of a variance made a parcel effectively unbuildable.

In December 2016, a Barnstable, Massachusetts, Superior Court jury awarded a Falmouth landowner $640,000 in damages plus interest and costs in a regulatory taking lawsuit against local authorities. The town has filed a motion for judgment notwithstanding the jury's verdict, which is still pending as of this writing in March 2017, according to online court records.

This case illustrates important land use issues that impact landowners' ability to develop their properties and can cause conflict with local zoning boards and other officials.

The disputed parcel of land

Smyth v. Falmouth Conservation Commission was filed in 2012 by the Florida owner of a Falmouth, Massachusetts, ocean-side property that her deceased father had given her. The lot is one of the last remaining undeveloped parcels in a large residential subdivision.

The plaintiff's parents bought the lot in 1975 and by the time the owner wanted to build a home on it in 2006, a suitable home could not be built without running afoul of zoning bylaws and regulations limiting disturbance of certain sensitive natural features like marshes and coastal banks, or encroachment into areas protected as flood runoff areas.

The town of Falmouth adopted these laws to protect sensitive shoreline property from development that could harm the environment. These zoning laws were adopted and amended over the years the family owned the parcel.

The variance request

The plaintiff requested a variance from the Falmouth Conservation Commission, the appropriate town unit. A variance is the granting of official permission by the responsible governmental body to proceed with a proposed building project even though it will violate applicable zoning laws and regulations.

According to the Joint Pre-Trial Memorandum filed in the case, the commission denied the variance because:

  • The owner did not suffer hardship.
  • The protected areas would not be protected better if the house were built than if it were not built.
  • The building project had no "overriding public benefit."

The regulatory taking claim

In her complaint, the plaintiff asserted that because of the restrictive zoning laws, she could not legally build a home on the property without a variance, so that the denial of the variance made the property unbuildable. She asserted that this deprived her of a "substantial economic benefit."

She claimed and the jury agreed that this constituted a "regulatory taking," meaning that application of governmental regulation and denial of a variance violated the federal and state constitutional protection against the government taking property without just compensation.

Pennsylvania courts have said that if a regulation eliminates any "economically beneficial use" of a parcel, a regulatory taking has occurred for which the government must compensate the owner. If it is not clear that the regulation prevents any beneficial use, the court must analyze the facts considering three factors:

  • Economic impact
  • Interference with the expectations the owner had when he or she invested in the property
  • Nature of the "government action"

In the Smyth case, to compensate for the regulatory taking it found, the jury awarded damages of $640,000, representing the difference between the value of the land if buildable ($700,000) and its value without the variance ($60,000).

Anyone with a similar land use question should seek legal advice immediately.

The lawyers at Phillips & Angley in Boston represent people and businesses throughout the commonwealth in a wide range of legal matters related to residential and commercial real estate disputes, including zoning, land use, special permits, variances, development projects, site plans and more. They represent clients before zoning boards and other municipal bodies as well as in litigation.