Daily Development for Wednesday, January 16, 2002

By: Patrick A. Randolph, Jr.
Elmer F. Pierson Professor of Law
UMKC School of Law
Of Counsel: Blackwell Sanders Peper Martin
Kansas City, Missouri
prandolph@cctr.umkc.edu

ZONING AND LAND USE; PRE-EXISTING NONCONFORMING USE; TRANSFER OF INTEREST: Ordinance provision terminating nonconforming use status upon change in ownership of property is invalid on its face, as is provision prohibiting any alteration of the property, since holders of nonconforming use rights are permitted to make reasonable alterations to repair their facility and render it practicable for their purposes..

Budget Inn of Daphne, Inc. v. City of Daphne, 789 So.2d 154 (Ala. 2000).

Prior owners had operated a motel on the property and had a sign that did not conform to the current zoning ordinance, although it had been legal when it was erected. Owners defaulted on a mortgagee, and the mortgagee obtained the property at a foreclosure sale. A licensee continued to operate the motel. Some time thereafter, mortgagee sold the property to Budget Inn.

Budget Inn sought to change the wording on the sign to indicate the new ownership, and the City indicated that it viewed the sign as no longer a valid nonconforming use under its ordinance. With respect to signs, the ordinance (somewhat ungrammatically) provided:

"Where a change in 1) use of property, 2) occupancy, 3) ownership regardless of name change, 4) change in name regardless of ownership, 5) location, 6) the alteration of a sign in any manner, the altered or changed sign shall be in conformance with the requirements of this Ordinance and shall lose its eligibility for characterization as a "Legal Non-conforming Sign. . . ." [sic]

Budget alleged that the ordinance was invalid on its face in two respects: (1) the privilege of a nonconforming use cannot rationally be denied on the basis of a change in ownership; (2) the privilege cannot be denied on the bases of "the alteration of a sign in any manner," since both ordinary maintenance and the functionality of the sign when ownership changes will make some change in the sign, including change of the lettering on the sign, necessary.

The City threw up a procedural smokescreen about ripeness and exhaustion of remedies which the Alabama Supreme Court easily dissipated. As to the claim that a variance should have been sought, the court held that a variance board is not an appropriate forum in which to evaluate facial constitutionality claims and that any attempt to obtain a variance, therefore, would have been futile and would not be required.

The court noted that the majority rule in the interpretation of nonconforming use status around the country is that change in ownership does not alter the status. It did not say whether the constitutional invalidity of the City's ordinance running counter to that principle was unconstitutional under the state or federal constitutions or what section of either it violated. It held simply that such a rule was "arbitrary and capricious" and therefore unconstitutional.

As to the "alteration" rule, the court cited other cases in which local ordinances were construed to permit changes in the images on the sign without loss of nonconforming use status. Note that this case is somewhat different, because the court conceded that the ordinance expressly provided that such changes would result in loss of status. So, again, we have a constitutional that the ordinance is facially void, without any clear indication of the source of authority within the constitution, or even what constitution.

Compare: Borough of Belmar v. 201 16th Avenue, MON-L-1882-97 (N.J. Super. Law Div. 1998).J. Super. 630, 707 A.2d 1090 (App. Div. 1998) (The DIRT DD for 7/10/98) , which also involved a purchaser at a foreclosure sale of a property that had a pre-existing, non- conforming use The court held that the mortgagee does not have the right to a prior non-conforming use if the right is not conveyed as part of its mortgage. It noted that in New Jersey it is necessary for the court to conclude that the prior user intended to pass on the nonconforming use status to the next purchaser. Presumably this can happen by implication in many cases.) Also see:

City of University Place v. McGuire, 9 P.3d 918 (Wash. App. Div. 2 , 2000) (The DIRT DD for 12/28/01) (Abandonment of pre-existing use will be found when landowner had not used geographically separate parcel for the stated use for 17 years and had offered it for sale for purposes inconsistent with the stated use.)

Comment 1: It is the constitutional grounding of the analysis here, by a state supreme court, that makes the issue of interest to the editor. The basic question of whether change in ownership or change in image results in loss of nonconforming use status has been discussed here before. See, e.g., Motel 6 Operating Ltd. Partnership v. Flagstaff, 991 P.2d 272 (Ariz.App. 1999). (The DIRT DD for 11/3/00) (Updating the sign faces of freestanding signs, which had been exempted from the zoning code as legal nonconforming signs, to reflect current logos and shopping center tenants, without altering the existing signs, is a "reasonable alteration"and consistent with continued nonconforming status.) Rogers v. Zoning Board of Adjustment of the Village of Ridgewood,309 N.J. Super. 630, 707 A.2d 1090 (App. Div. 1998) (The DIRT DD for 11/18/98) (A sign does not lose its protected, nonconforming status simply because its message has changed to that of another permitted business use.) (Both these cases are cited in the principle case.)

Comment 2: As the editor noted in connection with the discussion of the Rogers case:

"Note that many jurisdictions have dealt successfully with signs by "sunset" ordinances that provide for an amortization period before the signs must be removed. In the federal billboard cases, courts have approved amortization periods that would strike most objective viewers (such as the editor) as absurdly short. If this jurisdiction gets wise, the sign may not have long to live."

As a fulfillment of this prediction, see: AVR, Inc. v. City of St. Louis Park, 585 N.W.2d 411 (Minn. App. 1998) (the DIRT DD for 7/10/98) (City's establishment of a two year amortization period for a readymix concrete plant classified as a preexisting nonconforming use (i) is a legislative act afforded great deference by the court and requiring only a rational basis, (ii) is reasonable based on the City's consideration of the plant's useful life and other relevant factors, and (iii) did not violate the property owner's equal protection rights because the property owner did not show disparate treatment of similarly situated property owners.) Similar approaches have been taken with signs.

Readers are urged to respond, comment, and argue with the daily development or the editor's comments about it.

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