Avco Community Developers, Inc. v. South Coast Regional Commission, Supreme Court of California (1976)

Section 27400 of the California coastal Zone Conservation Act of 1972 requires any person desiring to perform development in the coastal zone after February 1, 1973 to obtain a permit from the commission. Section 27404 provided an allowance for any builder to proceed after February 1 if he had obtained a vested right to do so by having secured a building permit, commenced construction and performed substantial work before the effective date.

The petitioner, Avco Community Developers, Inc owns 7936 acres of land in Orange County, approximately 473 of which lie in the coastal zone. In 1971, at the request of Avco, 5234 acres of the property was zoned as “Planned Community Development.” In 1972, the county approved a final subdivision map for 74 acres known as Tract 7479 and issued a rough grading permit. By February 1 1973, Avco had completed or was in the process of constructing storm drains, utilities and similar facilities. The company had spent $2,2082,070 and incurred liabilities of $740,468. However, Avco had not completed the rough grading nor requested a building permit.

The case does not clearly say, but makes references indicating that the trial court held in favor of Avco. (The trial court found that details of building plans could be referenced from the tract map, regulations, and model of the buildings, that Avco reasonable expected that it would be allowed to construct buildings on the tract without any further discretionary governmental approval, and that the preliminary approvals of the county represented to Avco that it would permit the buildings).

Does the developer of a subdivision acquire a vested right to construct buildings on its land if it has subdivided and graded property and made certain improvements pursuant to government authorization, but not applied for or received a building permit? (or even earlier, when the land is zoned as a planned unit development?)

The court ruled that Avco had no vested right to construct buildings on Tract 7479 without satisfying the building permit requirement.

Earlier California cases set the precedent that neither the existence of a particular zoning nor work undertaken pursuant to governmental approvals preparatory to construction of buildings can form the basis of a vested right to build a structure which does not comply with the laws applicable at the time a building permit is issued. A developer cannot claim vested rights to construct buildings after approval of the subdivision map – and assume the final building permits to be merely ministerial approvals if the physical requirements of the building code are met - because the OC Building Code specifically requires buildings to conform to “other pertinent laws and ordinances.” Planned unit development approval merely imposes special zoning on property, and no property owner has a vested right in existing or anticipated zoning.
If the court were to determine that subdivision improvements and zoning were enough to give the property owner a vested right to construct buildings on the land consistent with the laws in effect when the subdivision was made or zoning enacted, there could be serious impairment of the governments right to control land use policy.

AVCO Rule (a common law vested right rule made by the Supreme Court):
“It has long been the rule in this state and in other jurisdictions that if a property owner has 1)preformed substantial work and 2)incurred substantial liabilities in good faith reliance upon a 3)permit issued by a government, he acquires a vested right to complete construction in accordance with the terms of the permit” (149).
This rule is the majority rule in California.