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Karen Cohen

In light of current economic conditions, some developers are requesting extensions for approved plans that are otherwise set to expire by the statutory deadline of July 1, 2020.  See Va. Code § 15.2-2209.1.  The enabling legislation expressly grants localities the authority to agree to a longer period and some Northern Virginia jurisdictions recently provided for extensions.

With this renewed focus on approved but inactive plans, it is a good time for developers to take a hard look at those plans to ensure alignment with current conditions and development objectives, especially in light of the Virginia Supreme Court’s 2019 decision in Loch Levan Land Limited Partnership v. Board of Supervisors of Henrico County (August 22, 2019), discussed below.

Virginia’s Statutory Scheme

It is important to begin with some background on Virginia’s statutory scheme for the validity period of certain approvals.  Site plans and plats typically have a five-year validity period once they are approved by the local jurisdiction.  See Va. Code § 15.2-2260(F) and Va. Code § 15.2-2261(A).  Additionally, rezonings and special use permits typically have conditions requiring the landowner or developer to commence the project or incur significant expenditures related to improvements for the project within a certain time.

To address the housing crisis in 2008-2009, the General Assembly has, on several occasions, extended these plat/plan validity dates and project commencement/expenditure deadlines, with the last such enactment extending the validity period until July 1, 2020.   The enabling legislation has always permitted “a longer period as agreed to by the locality.”  Va. Code § 15.2 -2209.1.  The COVID-19 induced economic crisis has led some Northern Virginia jurisdictions to extend the statutory deadline for the validity of subdivision plats, site plans and certain other approvals.

A deadline extension may prove helpful to a developer who needs additional time to activate an approved plan.  The Loch Levan case also serves as a reminder that, even if an extension is granted, it is prudent to reassess existing plans to ensure that they continue to align with current conditions and the developer’s objectives.

A Road to Nowhere – Loch Levan

In Loch Levan, a developer sought to extend a road that ran through a residential subdivision.  At the time that the developer recorded the plat for the section of road at issue, it anticipated connecting the road to additional development to the north at a future date. The developer had obtained final plat approval to connect the road as depicted on its recorded plat; however, the developer did not act on the approved plat within five years, and when it sought to do so 25 years after the approval, it faced opposition from neighbors, and in response to the concerns raised by the citizens, the county removed the relevant portion of the road from its major thoroughfare plan.

The developer challenged the county’s action, claiming it had a right to indefinite validity under Va. Code 15.2-2261(F), pursuant to which an approved final subdivision plat remains valid indefinitely, subject to certain exceptions, when a portion of the property subdivided has been conveyed to third parties (other than the developer or a local jurisdiction) — think of an approved plat for a residential subdivision where lots are being sold to purchasers (“third parties”), over an extended period of time.

The court found that this provision did not apply because the developer, in order to save money, had elected to record the plat dedicating the road without subdividing the property into lots, and thus, the five year validity period in 15.2-2261(C) rather than the indefinite period in 15.2- 2261(F) applied: “[The developer’s] election to segment the plats for Dominion Club Drive allowed it to avoid ‘spend[ing] money’ to complete the road, but it lost the indefinite protection offered by Code § 15.2-2261(F).”  The court also rejected the developer’s argument that it had a vested property right in the continuation of the road, concluding that the developer “had a statutory right to construct the road within five years” but “forfeited that right through inaction.”

Conclusion

While developers certainly will benefit from deadline extensions during these uncertain times, the Loch Levan case also serves as a cautionary reminder to re-evaluate plans that have been sitting on the shelf for a while – the plan that seemed prudent four or five years ago may not be today.