Daily Development for Thursday, November 3, 2005
by: Patrick A. Randolph, Jr.
Elmer F. Pierson Professor of Law
UMKC School of Law
Of Counsel: Blackwell Sanders Peper Martin Kansas City, Missouri dirt@umkc.edu

ZONING AND LAND USE; RESTRICTIVE COVENANTS: Where City refuses building permit and decision is based upon restrictions contained in private covenants, and such covenants were part of subdivision documents that the City reviewed in connection with subdivision approval, City’s decision is an application of public policy and can be regarded as a regulatory taking. 

Duncan v. City of Mentor City Council, 826 N.E.2d 832 (Ohio 2005), discussed further under the heading: “Constitutional Law; Takings; Regulatory Takings;  Procedure.” 

The Court of Appeals, Lake County, determined that Duncan’s mandamus claim was not yet ripe because the planning commission’s denial of Duncan’s application did not constitute a final determination concerning the application of regulations to the property since the decision was based on the private restrictive covenants of the subdivision declaration rather than on the application of any Mentor zoning ordinance.  Thus, the court of appeals entered summary judgment in favor of the city. 

The Supreme Court of Ohio reversed.  The argument that the subdivision declaration constituted a purely private matter was erroneous.  The Mentor Code of Ordinances requires a subdivider to submit plats for approval by the city.  Since some municipal approval of the subdivision is contemplated, restrictive covenants contained in the subdivision declaration are not completely private.  Thus, insofar as Mentor approved the creation of the subdivision and applied covenants in the subdivision declaration to deny Duncan’s application to build a single-family residence, a compensable taking might have occurred.  Since genuine issues of material fact remain, the judgment of the court of appeals was reversed and remanded for further proceedings.

Comment 1: A concurrence emphasized that the court was not deciding that the claimant had indeed established that a regulatory taking had occurred.  The claimant had bought the property apparently at a tax foreclosure sale for $1000, and claimed that he had no notice of any ownership claims of a homes association.  The court noted that the recorded declarations likely provided such notice.  Perhaps it will take the view  that the claimant was now getting exactly what he paid for. 

Comment 2: What the editor finds of interest here is the actual fact of a planning agency relying upon private land use restrictions in making its decision.  Some time ago, the editor opined that agencies commonly look to private restrictions in making decisions on items like variances, and he was excoriated by a number of members of the DIRT list for his naivete.  (Not the first time.)  Many DIRTers stated that in their experience land use agencies totally ignored the any private restrictions. 

Comment 3: What was really going on the case, the court suggests very obliquely was  that the  claimant was playing dog in the manger to get the city to buy his property.  The property was adjacent to a stream that provided flood control, and the city apparently was interested in purchasing it.  The court noted that the owner had refused an offer to acquire the property equal to the $1000 the claimant paid for the property.  It doesn’t look much like the claimant is going anywhere with this case, despite his victory here.

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