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A recent Commonwealth Court case involving a pair of residential properties has aptly demonstrated that not every residential property in Philadelphia can be automatically utilized for student housing. This case in question is Schwartz v. Philadelphia Zoning Board of Adjustment, 2015 Pa Commw. Lexis 413 (2015).

In Schwartz, two properties were zoned for single family and two family residential use, and located near Drexel University’s campus in Powelton Village. The properties were unequivocally zoned and used for residential purposes, and they were currently being leased to Drexel students, with each property rooming at least 4 students. For the record, the Philadelphia Zoning Code defines a family as “a person living independently or group of persons living as a single household unit using housekeeping facilities in common, but not to include more than three persons unrelated by blood, marriage or adoption.”

Continue Reading Commonwealth Court Upholds Philadelphia’s Definition of a Family for Zoning Purposes

Metro Bank v. Board of Commissioners of Manheim Township (Pa. Commonwealth Court 2015) dealt with the appropriate calculation for a transportation impact fee. Metro Bank was approved to build a bank in Manheim Township, and was required to pay an estimated transportation impact fee prior to the start of construction. This dispute is due to the amount of the transportation impact fee to be paid.

Metro Bank’s consultant determined that the new bank’s location would generate 110 peak hour trips with a pass-by rate of 57%. Thus, it was expected that 63 of the 110 peak hour trips would be generated from vehicles that were already driving and passing by the new development. A transportation impact fee is intended to offset the strain on a municipality’s roads when the development is installed in an area.

Manheim Township disagreed with Metro Bank’s estimation, and determined that the impact fee should be based on all of the 110 peak hour trips. The bank countered that the impact fee should only be based on the 47 additional trips into the development not resulting from vehicles that were already on the road.

The Court looked at the Administration of Impact Fee provision contained in Section 505-A of the Municipalities Planning Code and determined that nothing in that section required the municipality to exclude pass-by trips. Moreover, the Court determined that Metro Bank’s interpretation would lead to an inappropriate result because, by excluding pass-by traffic, the revenues generated by the impact fee would fall significantly short of the Township’s total costs.

Additionally, under Metro Bank’s calculation, the initial developer would pay for an unfairly high percentage of the increase in vehicular traffic to an area. Thus, the Court held that the impact fee should be determined by multiplying the per-cost trip multiplier by peak hour trips attributed to the new development, with no exclusion for pass-by traffic.

The unreported case of Jenkins v. City of Philadelphia (1470 C.D 2014) should serve as a reminder to all land use attorneys that they must always adequately satisfy all of the applicable proofs when presenting a zoning case. In this instance, the Applicant needed use and dimensional variances in order to utilize a building for commercial and residential purposes. In this instance, the property only permitted industrial uses.

The Philadelphia Zoning Board of Adjustment granted the requested variances. However, after this request a neighbor filed an appeal. The Philadelphia Court of Common Pleas affirmed the approval, at which time the neighbor appealed to the Commonwealth Court.

After reviewing the case, the Commonwealth Court reversed the trial court and observed that the Applicant failed to satisfy its burdens. The Court also noted that the Applicant presented extremely limited testimony to the Zoning Board. Initially, there was no evidence that the property was incapable of being used for any permitted purpose, and the Applicant testified that the property had been vacant for a decade.

That being said, the Applicant never tried to explain why the property was vacant or what marketing efforts were employed to sell/lease the property or use it for any permitted purpose. There was also no presented evidence that showed it was cost prohibitive to utilize the property for any permitted use. Instead, there was simply a statement that the property had been vacant and the permitted uses were not viable, without any adequate data or supporting information.

For this reason, land use cases should always present the requisite proofs in a zoning case, even if it appears that the board is inclined to grant a zoning application. A zoning board’s decision is entitled to great weight, but testimony is still required to support a board’s approval. This is particularly true for a use variance.

The case of Linde Corporation v. Black Bear Property L.P. et al was decided by the Court of Common Pleas of Lycoming County and dealt with the issue of who is an owner for purposes of a mechanic’s lien claim. Specifically, is the owner of subsurface rights an owner under the Mechanic’s Lien Law? As noted by the Court, the owner of only subsurface rights can be an owner, but was not one in this instance.

The Plaintiff, Linde Corporation (“Linde”), filed a mechanic’s lien for labor and materials used to provide work on the subject property. Linde had entered into a contract with the owner of the property, Black Bear, LLC for the work to the surface of the property. Due to non-payment, Linde filed a Mechanic’s Lien Claim and a Complaint to Obtain Judgment and Enforce Mechanic’s Lien Claim. One of the other Defendants named in the Complaint was Penn Central Corporation, the owner of the subsurface rights in the subject property.

Linde argued that because it installed underground pipes, it had provided a benefit to Penn Central. Initially, the Court held that someone merely holding subsurface rights in a property can be an owner. However, in this instance, Linde did not enter into a contract with Penn Central. Because there is neither an actual nor an implied contract, the Court held that Penn Central is entitled to have the lien stricken against Penn Central. The Court held that in this instance, the Mechanic’s Lien Law should be construed to mean that only the property owner who actually contracts with the contractor can be subject to a mechanic’s lien.

In the case of B.N. Excavating v. PBC Hollow-A, the Pennsylvania Superior Court held that it is not always  necessary to show that a structure has been erected in order for a mechanics lien to be filed in Pennsylvania.   Rather, the majority of the Court ruled that where land excavation is an integral part of the overall construction plan for a building, a mechanics lien could possibly be filed for that work, even where no structure has been built.   The en banc panel noted that the seminal case of Sampson-Miller Associated Companies v. Landmark Realty Co. does not stand for the proposition that a mechanics lien can never be filed if a structure has not been erected.  

The dissenting judges in B.N. Excavating noted that there was never any allegation that a structure was ever erected.  Therefore, in their opinion, a mechanics lien cannot be filed as no structure exists.   The majority of the en banc panel stated that the B.N Excavating ruling does not stand for the proposition that a mechanics lien can be filed against land which has no correlation to the construction of a permanent structure.  However, where land excavation is an integral component of the overall development of a structure, a mechanics lien can attach to the land, even without the construction of a permanent structure.

The B.N. Excavating case is a tremendous victory for land excavators and potentially other subcontractors.   In a difficult economic environment, there is a great potential for subcontractors to perform work on projects in which a permanent structure is never ultimately erected.  

In the case of In Re Appeal of Chester County Outdoor, LLC, the applicant, Chester County Outdoor LLC (“CCO”), desired to erect a billboard on certain property in Penn Township. CCO filed a challenge to the validity of Penn Township’s Zoning Ordinance pursuant to Section 916.1 of the Municipalities Planning Code, alleging that that Section 1800G of the Ordinance excluded billboards.  Section 1800G stated that no sign could be erected in the Township except one for a business or merchandise for sale on the same premises as the billboard. 

At the hearing before the Zoning Hearing Board (“Board”), CCO withdrew the site plan that was attached to its application.  Thereafter, the Board confirmed at the hearing that the only issue before it related to the validity of Section 1800G.  The Board then agreed with CCO and ruled that Section 180OG was invalid as it excluded billboards.  It did not address whether CCO was entitled to site specific relief.

CCO appealed the Board’s decision stating that it was entitled to site specific relief.  The Common Pleas Court affirmed the Board’s decision and ruled that CCO lacked standing to appeal the Board’s decision.

The Commonwealth Court affirmed, noting that CCO was not an aggrieved party.  It held that the only issue before the Board was whether Section 1800G was invalid.  The Board ruled in favor of CCO on that issue, and therefore CCO was not aggrieved.  The Court also stated that the Board never held that CCO is not entitled to site specific relief, despite the fact that the Board noted that CCO would not be entitled to the particular site specific relief in its application (as it needed a dimensional setback).  The Court held that this portion of the Board’s decision was dictum and it was merely informing CCO what it would need to change on its plans if it requested site specific relief.  Thus, while Section 1800G was declared invalid, the applicant was unable to obtain site specific relief.  

A recent article in the National Law Journal reports that class actions have been filed in California and Washington State federal courts against four major real estate title and escrow companies. The suits claim that the title companies charged customers for work completed by other companies involved in the settlement process, led them to pay increased fees for unnecessary services and profited from interest earned from funds escrowed during settlements.  This is just another example in the long list of suits filed across the country against title companies that question their business practices and fee structure.
 

This podcast will discuss deemed approvals in zoning matters under Pennsylvania law. According to a study conducted by Warton, the Philadelphia region has some of the most stringent zoning regulations in the country. An understanding of the time frames in which local zoning and planning boards are required to act within is important for developers to understand. By using these time requirements effectively and being sure not to take any actions which can be viewed as a waiver of your rights, developers can at times obtain deemed approvals for projects.

You can download a copy of this podcast here.