Posted by: Patricia Salkin | May 13, 2014

Nebraska Supreme Court Upholds Abandonment of Nonconforming Use and Denies Taking Claim

Rodehorst Brothers (“Rodehorst”) owned a fourplex apartment building in Norfolk, Nebraska. The building, in an area zoned R–2 for one- and two-family use, was a legal, nonconforming use. The Neb.Rev.Stat. § 19–904.01 as well as an applicable zoning ordinance, both provided that the right to continue such a use was lost if it had been discontinued for 1 year. Because the record showed that Rodehorst discontinued the use for 1 year, the court concluded that it forfeited its right to continue. Further, the City of Norfolk Board of Adjustment (“ Board”) lacked authority under Neb.Rev.Stat. § 19–910 to grant a “use” variance to otherwise allow the use to continue and that there was no “taking” of Rodehorst’s property.

Rodehorst had applied for several building permits for its apartment building to replace the roof, fix some electrical issues, and remodel the apartments. The building inspector, granted the first two permits, but denied the third. The third permit was denied because Rodehorst had forfeited its right to continue its nonconforming use. Rodehorst appealed to the Board asking it to grant it a use variance to allow it to continue operating the building as a fourplex. At the hearing Rodehorst argued that it did not forfeit its right to continue using the building just because several of its apartments had been unoccupied. Further, they said denial cause them to suffer an undue hardship. The City of Norfolk (“City”) argued that Rodehorst had forfeited its right to continue its nonconforming use because it had been discontinued for 1 year and that the Board did not have authority to grant a use variance. The Board agreed with the City.

Rodehorst then appealed to the district court. It argued that it had not forfeited its right to continue the nonconforming use simply by failing to rent out the apartments. It emphasized that the building remained a fourplex and that its use as such continued whether the apartments were occupied or not. It further argued that even if it had forfeited its right to continue the nonconforming use, the Board erred in concluding it did not have the authority to grant a use variance. Further, Rodehorst argued that the Board’s ruling was an unconstitutional taking.

The district court affirmed the Board’s decision. The court determined that the Board did not have authority to grant a use variance. The court noted that the City’s code defined “ ‘variance’ ” as “ ‘relief from or variation as applied to a specific piece of property, as distinct from rezoning.’ ” The court explained that the Board could grant variances based only on “certain physical characteristics of the actual ground or land in question,” rather than the structures placed on the land. The court also determined that the denial of the building permit to remodel the apartments was proper. The court concluded that Rodehorst had failed to present any evidence that the property had been used as a fourplex within the past twelve months and that Rodehorst had forfeited its right to continue the nonconforming use.

Rodehorst appealed. On the matter of forfeiting its right to continue its nonconforming use, Rodehorst argued that although some of the apartments in the building were unoccupied for several years, the building’s use as a fourplex never changed, primarily because it had all the trappings of a fourplex and the units were available for use. The court concluded that because only one or two of the apartments had been occupied for several years, Rodehorst “discontinued” its nonconforming use for 1 year and therefore forfeited its right to continue that use. Here the court stated whether a building is usable, as a nonconforming use does not mean that it is actually used in that manner.

The degree of occupancy is the critical factor in determining whether a multifamily dwelling nonconforming use remains in effect. Here, the court determined that utility records showed that two of the apartments had been unoccupied since 2007 and 2008. The court therefore concluded that the building had not been used as a fourplex for at least 12 months and that Rodehorst had lost its right to continue.

Further, there was no evidence that any effort had been made to rent the apartments and there was no evidence that the apartments were in a condition to be rented. Moreover, the City presented evidence of the building’s long-term nonuse at the same time there were low vacancy rates. The City also presented evidence that the apartments were in disrepair when the building inspector visited the building in 2010. The court stated, “A discontinuance period will run where the landlord did not really try to rent the premises.”

On the matter of the board had no authority to grant a “use” variance, the court disagreed stated § 19–910 allows a board of adjustment to grant a variance from a zoning regulation “only if strict application of the regulation, because of the unusual physical characteristics of the property existing at the time of the enactment,” would result in exceptional practical difficulties or undue hardships to the owner. Here, Rodehorst requested a variance based on its desire to continue using its building as a fourplex, not because of any unique physical characteristic of the property. Therefore, the Board did not have authority to grant the use variance.

On the matter of the application of the zoning regulations not constituting an unconstitutional taking of Rodehorst’s property, Rodehorst argued only the district court’s “failure to recognize that it was an unconstitutional taking of property. Here, the court concluded that there was no taking. Stating that the record was not clear on the economic impact of the regulation on Rodehorst. Also, the regulation had not interfered with Rodehorst’s reasonable investment-backed expectations. The record showed that Rodehorst had bought the fourplex in 1987 and continued to use it as a fourplex, a legal nonconforming use, for many years. Section 19–904.01 was the law before the purchase, and the City adopted its discontinuance provision in 2002. A property owner is presumed to know the law affecting his property. Rodehorst’s reasonable expectation was that it could continue its nonconforming use, indefinitely, if it was not discontinued for 1 year. Finally, the character of the governmental intrusion weighs in favor of concluding there was not a taking. Discontinuance provisions work gradually over time to eliminate nonconforming uses, a recognized good.

Rodehorst Bros. v City of Norfolk Bd. of Adj., 287 Neb 779 (NB 3/28/2014)

The opinion can be accessed at:
http://supremecourt.ne.gov/sites/supremecourt.ne.gov/files/sc/opinions/s13-253.pdf


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