Protecting nonconforming uses from abandonment, etc.

Periodically zoning ordinances change, and when that happens, some properties which were previously developed become nonconforming uses or nonconforming structures. When that occurs, the property owner typically can continue the use or the structure for at least some period of time, provided it is not abandoned or destroyed. This article will outline the basic points to be mindful of in avoiding a loss of vested rights following a change in zoning. Upon a change in zoning requirements, the property owner almost always is accorded a period of time within which to continue the activity. In some jurisdictions, like New Jersey, the property owner enjoys a statutory right to continue the nonconforming use in perpetuity, so long as it is not abandoned, destroyed, enlarged or changed to another use. In other jurisdictions, like New York, the right to continue nonconforming uses is governed by local laws and ordinances. To avoid constitutional claims of a taking of property, the property owner is virtually always accorded a reasonable period of time during which the use can be continued. Typically this can be as little as a year or two, but can be substantially longer. Some jurisdictions employ amortization provisions, whereby the property owner's investment is deemed to be amortized out over a period of time, after which the use must be discontinued. This, for example, is how the character of Times Sq. was changed over time as new zoning laws with amortization provisions took effect and required that the existing concentration of adult uses be discontinued. Abandonment of an activity will almost always result in termination of the right to continue a nonconforming use. That bright line rule can be difficult to apply in practice, however, because determining what constitutes "abandonment" often is anything but clear. For example, in some jurisdictions, like N.J., the courts have traditionally found abandonment to have occurred only upon the confluence of an overt act coupled with an intent to abandon. Suppose, for example, that a nonconforming restaurant discontinues operation and remains unoccupied for several years. During that time period, none of the restaurant equipment is removed, and the owner undertakes continuing efforts to find a new tenant. There has been no overt act and no intent to abandon, so the right to resume the nonconforming use would remain. If, however, all of the seats and equipment which make the building suited to restaurant use were removed, that would constitute an overt act. The focus would then be on the owner's intent, as demonstrated by activities like efforts to lease the property, statements made to third parties, and other evidence. These cases often are close calls and depend entirely on the facts in each situation. Other jurisdictions, such as N.Y., allow local laws and ordinances which provide for abandonment to be presumed following a period of discontinuance, irrespective of the owner's intent or actions. Where such provisions apply, a property owner-or a lender with a security interest or that has foreclosed-must be particularly vigilant in watching the clock. There have been instances where a closed facility reopens for as little as one day to restart the abandonment clock and preserve a valuable property right. Complete destruction of a nonconforming use or structure will virtually always terminate the right to resume the use or rebuild the building. The more difficult cases, however, are those in which only partial destruction has occurred, since partial destruction often carries with it a right to repair the structure to its original condition and resume the use. Determining whether it has been partially or completely destroyed can be a difficult question, particularly where the applicable law does not specify how one measures the extent of destruction. There are many different methods by which to measure the extent of destruction, not all of which are permissible in every jurisdiction. Some of the more common methods include whether more than 50% of the fair market value of the structure has been lost; whether the cost to rebuild the destroyed portion exceeds 50% of the construction cost, or the fair market value, of the entire structure; and whether 50% of the floor area of the structure has been destroyed. Fifty percent is not always the threshold, but is often the point at which partial destruction becomes complete destruction. Howard Geneslaw is a director at the law firm of Gibbons P.C., which has offices in Newark, New York, Trenton, Philadelphia and Wilmington.