Vesting-rights bill passed by Judiciary Committee

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Legislation (SB 5921) to prevent development rules from changing in “the middle of the game” has been passed by the Senate Judiciary Committee.

Ashbaugh Beal partner Tymon Berger (photo right) testified on behalf of AGC before the House Judiciary Committee in support of the House version of the measure (HB 1394). The legislation preserves the common-law interpretation and application of the state’s vested-rights doctrine.

“This bill is about protecting against unintended consequences” testified Berger. “I don’t think anyone disputes the value of the vesting-rights doctrine. It encourages investors and injects predictability.” (See below for the video of Berger’s full testimony.)

The legislation was introduced in response to court decisions regarding the Potala Village development in Kirkland. Potala Village planned to have 143 apartment units and submitted a completed shoreline substantial-development permit which the city approved. The city subsequently imposed a moratorium on development and adopted new zoning regulations which would have allowed only 60 units.

King County Superior Court concluded Potala Village had vested rights before the city imposed the six-month emergency moratorium and adopted the new zoning regulations. But the Court of Appeals found that statutory encroachments on the vested-rights doctrine restricted its application to only building-permit applications—not the shoreline substantial-development permit that the city had approved and allowed Potala to proceed under. The Washington Supreme Court declined to review that decision.

The vested-rights doctrine was first recognized by the Washington Supreme Court in the 1950s. The Court originally stated that a right vests when a party applies for a building permit. However subsequent cases applied the vested-rights doctrine to permit applications other than building-permit applications finding that rights vest at conditional-use permit applications grading-permit applications septic-permit applications and shoreline substantial-development permit applications like Potala’s. The inclusion of these “other” permits became part of Washington’s vested-rights common law.

The development community maintains that the appellate court interpreted the doctrine too strictly adhering to statute while ignoring the long-held common-law recognition that rights can vest under both building permits and “other” permits like Potala’s. Thus the legislation states that statutory codification of the vested-rights doctrine does not limit the common-law interpretation and application of the vested-rights doctrine.

HB 1394 cosponsored by Representatives Takko Taylor Orcutt Scott and Buys did not make it out of the House Judiciary Committee before a legislative cut-off date.  However the measure is still alive because SB 5921 cosponsored by Senators Honeyford Hatfield Chase and Brown was passed out of the Senate Judiciary Committee 4-3 and now sits in the Senate Rules Committee.

Click here for TVW video of Bergers testimony to the legislature on this issue.