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Property Owner Waives Right to Challenge Permit Conditions

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by Sean M. Sherlock

Note:  The California Supreme Court granted review in this case on December 10, 2014.  As such, the case is not citable precedent, and may be reversed in whole or part.

In a new case out of San Diego County, the California Court of Appeal has held that, by proceeding with development of a project under a coastal development permit, property owners waive their right to challenge any conditions to that permit. Lynch v. California Coastal Commission ___ Cal.App.4th ___ 2014 WL 4421784 (Cal.App. 4 Dist.) (Sept. 9, 2014). In Lynch, plaintiffs filed a petition for writ of mandate against the California Coastal Commission, challenging two conditions included in their coastal development permit. The trial court granted the petition, and issued a writ ordering the Coastal Commission to remove the conditions. The court of appeal reversed.

The Lynch family and Frick family owned bluff-top homes in Encinitas, California. They applied to the Coastal Commission to repair and replace an old erosion control structure, wall, and stairway on the bluff. The Coastal Commission approved the project, but included numerous special conditions in the permit. The Lynches and Fricks objected to two of these conditions: (1) a condition prohibiting them from reconstructing the lower section of the stairway, and (2) a condition limiting the duration of the permit to 20 years.

Following issuance of the permit, the Lynches and Fricks proceeded with development of the project. In addition to proceeding with construction, they recorded deed restrictions (also required under the permit conditions) stating, among other things, that the project was approved subject to the special conditions, and that they elected to comply with the special conditions in order to undertake the development authorized by the permit. Concurrently with their development, plaintiffs filed their petition for writ of mandate in the Superior Court, challenging the conditions prohibiting them from rebuilding the lower section of the stairway, and limiting the permit’s duration to 20 years.

The court of appeal held that by recording the deed restrictions in compliance with the permit, and by otherwise proceeding with development under the permit, plaintiffs waived their right to challenge any permit conditions. “Generally, a property owner may only challenge an allegedly unreasonable permit condition by refusing to comply with the condition and bringing a mandate action to have the condition declared invalid.” Citing Building Industry Assn. v. City of Oxnard (1985) 40 Cal.3d 1, 3, fn. 1. “If the property owner complies with the condition, the property owner waives the right to legally challenge it. . . . [citations omitted] The rule stems from the equitable maxim, ‘He who takes the benefit must bear the burden.’” Citing Cal. Civ. Code, §3521; Peers v. McLaughlin (1891) 88 Cal. 294, 299 (“[N]o person, whether minor or adult, can be permitted to adopt that part of an entire transaction which is beneficial, and reject its burdens. . .”).

Thus, the waiver principles upon which this case was decided will likely have a broader application beyond the circumstances in this case. A property owner, developer, or permit applicant saddled with objectionable permit conditions must take care to evaluate its legal strategy before taking any actions under the permit.