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Enforcement of Building Code on a Project under Construction at Time of Annexation

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Reviewed Date: October 07, 2020

Original Author: 
Shechter, Leslie
Date of Material: 
Sep 23, 1992

Building permits
Code enforcement--Building inspection
Code enforcement--Site inspection

Enforcement of Building Code on a Project under Construction at Time of Annexation

MTAS was asked whether newly annexed property is subject to the city's building code.

September 23, 1992

You have asked whether newly annexed property is subject to the city's building code; specifically, whether the city may require a builder to obtain a building permit for newly annexed property after footings for the structure have been poured. In my opinion, the city has the authority to require that newly annexed property owners/developers comply with all ordinances of the city, including the building code provisions, and the city may require this property owner to obtain a building permit and inspect for compliance with the building code from this point on.

The general rule in the case of annexation is that the ordinances of the annexing municipality extend to the newly annexed area immediately after the annexation becomes final.

When territory is annexed to a municipal corporation it thereby becomes subject to all the laws and ordinances by which the municipality is governed unless there is some statutory provision to the contrary ... or unless the application of such ordinances in a particular case would impair the obligation of a contract... . C.J.S., Municipal Corporations, Section 73, page 183.

See also 41 ALR 2d 1463.

Additionally, in Tennessee, unless general statutes provide otherwise, even property that is zoned for a particular use under the county or regional zoning codes loses its zoning classification upon being annexed and the annexing municipality has the opportunity to continue the old classification or rezone the property. The only exception to this rule is where the builder/developer has made a substantial economic investment in his property relying on previously issued permits or the pre-existing zoning classification by, for example, beginning construction. This is known as having a "vested interest".

In Tennessee, the possession of a valid building permit is a prerequisite in determining whether there is a "vested interest" in continuing the particular use or finishing a particular project. Chickering Ventures Inc. v. Metropolitan Government of Nashville and Davidson County, 14 TAM 4-16 (Tenn. App. 1988). Further, absent a statute providing otherwise, annexation into a city is an automatic revocation of county building permits and validly issued county building permits, without substantial expenditures by the property owner, do not confer any vested rights in the continued application of the county zoning ordinance. Schneider v. Lazarov, 390 S.W.2d 197 (Tenn. 1965); Towe v. City of Hendersonville, Trial Court No. 41--223 (Tenn. Ct. App. 1979).

What constitutes a "substantial expenditure" also differs jurisdiction to jurisdiction. In Howe Realty Co. v. City of Nashville, 141 S. W.2d 904, 906 (Tenn. 1940), the Tennessee Supreme Court reviewed the case law on the subject of "vested rights" and concluded that:

... the degree to which actual construction may have progressed ... , appears to play a very important part in the attitude of the courts... .

There is no Tennessee case that has directly ruled whether more than a foundation must be laid but, most jurisdictions require that walls or a single story be constructed before a right to continue building vests. The courts require "substantial construction or substantial liabilities be incurred" before rights vest. State ex rel. SCA Chemical Waste Services, Inc. v. Konigsberg, 636 S.W.2d 430, 437 (Tenn. 1982) citing 82 Am Jur. 2d Zoning and Planning § 240. For a complete discussion of the law on this subject see 89 ALR3d 1051.
When the property owner has a "vested interest" in the pre-existing permit or zoning classification, the courts do not allow the municipality to apply zoning regulations to prohibit the proposed use, allow the municipality to revoke a valid pre-existing permit or to impose new zoning or building code regulations that would have the affect of depriving the landowner/developer of his investment-backed expectations.

It is my understanding that this property owner was not subject to a building code in the county and thus, has no valid pre-existing permit. You have also said that this property owner has done nothing more than pour footings. No slab or foundation has been poured and no substantial construction has begun. Finally, you indicated that you do not intend to deny this property owner a building permit when one is applied for. Only, that your interest is in requiring compliance with the building code from this point on. In this regard, you are not attempting to impose requirements that would in any way, deny this property owner of any "vested interest" to the extent any such interest may arguably be said to exist.

Where is the authority for a municipality to require a building permit? The enabling or authorizing statute for municipal land use and zoning regulation is found in Title 13, chapter 7, parts 2 and 3 of Tennessee Code Annotated. Tennessee
Code Annotated, Section 13-7-208 Enforcement of Ordinances, provides:

In case any building or structure is or is proposed to be erected, constructed, ... or any building, structure or land is or is proposed to be used in violation of any ordinance enacted under this part and part 3 of this chapter, the building commissioner, municipal counsel or other appropriate authority or the municipality, ... may, in addition to other remedies, institute injunction, mandamus or other appropriate action or proceeding to prevent such unlawful erection, construction ... or use, or to correct or abate such violation, or to prevent the occupancy of the building, structure or land.

Tennessee Code Annotated, Section 6-54-501 gives municipalities the authority to adopt standard codes. The City, by virtue of its charter and this state enabling legislation, has adopted building and other health and safety codes and a zoning ordinance. A property owner that fails to obtain a building permit, as required by the municipal code, is violating the municipal ordinance and this statute and can be enjoined from doing so.

Again, only when there is a vested interest or property right to continue in violation of the municipal code, or some other statutory exception will the municipality be estopped from enforcing its ordinances. This property owner had no validly issued permit and has not made the substantial investment necessary to have the right to continue building without obtaining a permit from the municipality.

Thanks for asking MTAS to help.

With kind regards,

Leslie Shechter
Legal Consultant

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