If land is sold mid-project, do the development rules locked in at the first permit still apply?

Plain-English summary

A state senator asked whether the development rules locked in when a landowner files the first permit application for a project stay attached to the land if the property is later sold to someone else. The Attorney General concluded that they do, for the duration of the project and regardless of a conveyance, as long as the project remains the same.

Section 245.002 of the Local Government Code is the heart of Texas's "vested rights" statute. It directs a regulatory agency to decide a permit application solely on the orders, regulations, ordinances, rules, expiration dates, or other requirements in effect when the original application for the first permit is filed, and when a series of permits is needed for a project, the rules in effect at the first filing govern all the later permits too. The opinion read the statute's text as silent about ownership: it locks the rules to the project for the project's duration without mentioning a possible sale. The defined term "project" is an "endeavor" for which one or more permits are required; nothing in that definition ties the project to a particular person or ends it when the land changes hands. So the protections run with the project, not the owner, and a purchaser steps into them.

The opinion added an important limit. The locked-in rules last only while the project stays the same. If a purchaser (or owner) alters the project, the protection is lost and current development regulations apply. Whether a particular project has changed enough to lose the chapter 245 protection is a question for the local regulatory agency, the political subdivision's body that processes, approves, or issues the permit. The Attorney General could not decide that, because it depends on facts, and fact questions are not resolved through the opinion process. The opinion also noted that chapter 245 applies only to projects in progress on or commenced after September 1, 1997, that some permits and regulations are exempt, and that an agency may by ordinance put an expiration date on dormant projects.

Currency note

This opinion was issued in 2001. Subsequent statutory amendments, court decisions, or later Attorney General opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here. Chapter 245 of the Local Government Code has been amended since 2001.

What the opinion meant for those who asked

Property buyers and developers (what the opinion held): The opinion concluded that a purchaser of land mid-project takes the benefit of the development regulations locked in when the original first-permit application was filed, for the project's duration, so long as the project is not changed.

Cities, counties, and other regulatory agencies (what the opinion held for them): The opinion held that the locked-in rules survive a conveyance, but left to the local regulatory agency with jurisdiction the fact-bound question of whether a project has changed enough to lose chapter 245's protection.

Common questions

Do "vested rights" under chapter 245 transfer when land is sold?
The opinion concluded yes. The rules in effect at the first permit filing stay with the project for its duration regardless of conveyance, because the statute and the definition of "project" focus on the project, not the owner.

What can cause a project to lose those locked-in rules?
The opinion explained that if the project is altered, the protection ends and current development regulations apply.

Who decides whether a project has changed?
The opinion said the local regulatory agency with jurisdiction, the body that processes, approves, or issues the permit, must decide that, because it is a fact question.

Why couldn't the Attorney General answer whether a particular project changed?
The opinion explained that whether a project has changed cannot be resolved without considering fact questions, which are not amenable to the opinion process.

Does chapter 245 apply to every project?
No. The opinion noted chapter 245 applies only to projects in progress on or commenced after September 1, 1997, that certain permits and regulations are exempt, and that a regulatory agency may place an expiration date on dormant projects.

Background and statutory framework

Section 245.002 locks in, for the duration of a real-property project, the development regulations in effect when the original application for the first necessary permit is filed; if a series of permits is required, the rules at the first filing are the sole basis for all subsequent permits. Tex. Loc. Gov't Code Ann. § 245.002(a), (b) (Vernon Supp. 2001); see Quick v. City of Austin, 7 S.W.3d 109, 131 (Tex. 1998). A "project" is an endeavor over which a regulatory agency exerts jurisdiction and for which one or more permits are required; the definition does not tie the project to a person or end it on sale. Id. § 245.001(3). The word "endeavor" carries its common meaning of a systematic or continuous effort toward an object. Tex. Gov't Code Ann. § 311.011(a) (Vernon 1998); Thompson v. Corbin, 137 S.W.2d 157, 159 (Tex. Civ. App.-Texarkana 1940, no writ). A "regulatory agency" is the governing body or an agency of a political subdivision acting to process, approve, or issue a permit, and it is the body with jurisdiction to decide whether a project has changed. Id. § 245.001(4). Chapter 245 applies only to projects in progress on or commenced after September 1, 1997, exempts certain permits and regulations, and lets an agency place an expiration date on dormant projects. Id. §§ 245.003, .004, .005.

Citations

Statutory provisions:

• Tex. Loc. Gov't Code Ann. § 245.002(a), (b) (Vernon Supp. 2001)
• Tex. Loc. Gov't Code Ann. § 245.001(3) (Vernon Supp. 2001)
• Tex. Loc. Gov't Code Ann. § 245.001(4) (Vernon Supp. 2001)
• Tex. Loc. Gov't Code Ann. § 245.003
• Tex. Loc. Gov't Code Ann. § 245.004
• Tex. Loc. Gov't Code Ann. § 245.005
• Tex. Gov't Code Ann. § 311.011(a) (Vernon 1998)

Cases:

• Quick v. City of Austin, 7 S.W.3d 109 (Tex. 1998)
• Thompson v. Corbin, 137 S.W.2d 157 (Tex. Civ. App.-Texarkana 1940, no writ)

Source

• Landing page: https://www.texasattorneygeneral.gov/opinions/john-cornyn/jc-0425
• Original PDF: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/2001/jc0425.pdf

Original opinion text

Best-effort transcription from the official scanned PDF. Minor character-level errors from the source OCR have been corrected; the linked PDF is authoritative.

OFFICE OF THE ATTORNEY GENERAL - STATE OF TEXAS

JOHN CORNYN

October 19, 2001

The Honorable Frank Madla
Chair, Committee on Intergovernmental Relations
Texas State Senate
P.O. Box 12068
Austin, Texas 78711-2068

Opinion No. JC-0425

Re: Whether real property for which an original application for a first permit has been filed remains subject to the orders, regulations, ordinances, rules, expiration dates, or other requirements that were effective at the time of that filing although the property has been conveyed to a different owner (RQ-0386-JC)

Dear Senator Madla:

Section 245.002 of the Local Government Code locks in, for the duration of a real-property "project," the development regulations in effect when the original application for the first necessary permit is filed. See TEX. LOC. GOV'T CODE ANN. § 245.002(a), (b) (Vernon Supp. 2001); see also Quick v. City of Austin, 7 S.W.3d 109, 131 (Tex. 1998). Under the statutory definition of the term "project," it is irrelevant whether the owner who files the original application for the first permit retains the property for the duration of the project or conveys the property. See TEX. LOC. GOV'T CODE ANN. § 245.001(3) (Vernon Supp. 2001). You ask a question regarding a tract of land for which an owner has filed an original application for the first necessary permit.[1] If another person purchases that tract of land, you inquire, is the purchaser "entitled to the rights and benefits" that chapter 245 provides to the owner who filed the original application for the first permit, see Request Letter, note 1, at 1, and we thus understand you to ask whether the property remains subject to the development regulations in effect when the original application for the first permit was filed despite the conveyance. We conclude that the property remains subject to the development regulations in effect at the time the original application for the first permit was filed, but only if the project remains the same. Whether a project remains the same is a fact question, and this office cannot resolve it. See, e.g., Tex. Att'y Gen. Op. Nos. JC-0032 (1999) at 4 (stating that question of fact is beyond purview of this office); JC-0027 (1999) at 3 (stating the questions of fact cannot be addressed in attorney general opinion); JC-0020 (1999) at 2 (stating that investigation and resolution of fact questions cannot be done in opinion process).

Section 245.002 of the Local Government Code specifies that a real-property "project" will be subject to the development regulations in effect when the original application for the first permit required for the project is filed:

            (a) Each regulatory agency shall consider the approval, disapproval, or conditional approval of an application for a permit solely on the basis of any orders, regulations, ordinances, rules, expiration dates, or other properly adopted requirements in effect at the time the original application for the permit is filed.

            (b) If a series of permits is required for a project, the orders, regulations, ordinances, rules, expiration dates, or other properly adopted requirements in effect at the time the original application for the first permit in that series is filed shall be the sole basis for consideration of all subsequent permits required for the completion of the project. All permits required for the project are considered to be a single series of permits. Preliminary plans and related subdivision plats, site plans, and all other development permits for land covered by the preliminary plans or subdivision plats are considered collectively to be one series of permits for a project.

TEX. LOC. GOV'T CODE ANN. § 245.002(a), (b) (Vernon Supp. 2001). The terms "permit," "project," and "regulatory agency" are defined in section 245.001:

            (1) "Permit" means a license, certificate, approval, registration, consent, permit, or other form of authorization required by law, rule, regulation, order, or ordinance that a person must obtain to perform an action or initiate, continue, or complete a project for which the permit is sought.

            (3) "Project" means an endeavor over which a regulatory agency exerts its jurisdiction and for which one or more permits are required to initiate, continue, or complete the endeavor.

            (4) "Regulatory agency" means the governing body of, or a bureau, department, division, board, commission, or other agency of, a political subdivision acting in its capacity of processing, approving, or issuing a permit.

Id. § 245.001. Chapter 245 applies only to a project "in progress on or commenced after September 1, 1997," see id. § 245.003, and certain permits and regulations are exempt from the chapter, see id. § 245.004. In addition, a regulatory agency may, by ordinance or regulation, place an expiration date on dormant projects, after which date the project would be subject to current development regulations. See id. § 245.005. We understand that the property about which you are concerned is not exempt from chapter 245 and is not dormant. See generally Request Letter, supra note 1.

With respect to property for which an original application for a first permit has been filed, the property is subject to the development regulations that are effective at the time of the filing (with the exceptions listed in chapter 245 of the Local Government Code) for the duration of the project regardless of any conveyances that may occur during the project. Nothing in chapter 245 suggests that the development regulations to which a property is subject, locked in at the time of filing the original application for the first permit, no longer apply to the property solely because the property has been conveyed to another owner. Section 245.002 facially directs that a property is, for the duration of a project, subject to the development regulations in effect when the original application for the first permit was filed, without mentioning the possibility of a conveyance. Cf. Quick, 7 S.W.3d at 131 (examining prior statute, which "provides that if a series of permits is for a project, the ordinances in effect at the time the original application for the first permit is filed shall be the sole basis for consideration of all subsequent permits required for the completion of a project"). Additionally, the term "project," as defined in section 245.001(3), does not indicate that a project is specific to a person or terminates each time the property is sold. See TEX. LOC. GOV'T CODE ANN. § 245.001(3) (Vernon Supp. 2001). A project is an "endeavor," see id., which is commonly defined as "the action of endeavouring; effort, or pains, directed to attain an object." V OXFORD ENGLISH DICTIONARY 226 (2d ed. 1989); see TEX. GOV'T CODE ANN. § 311.011(a) (Vernon 1998) (requiring us to read statutory words and phrases in context and to construe them according to rules of grammar and common usage); Thompson v. Corbin, 137 S.W.2d 157, 159 (Tex. Civ. App.-Texarkana 1940, no writ) (defining verb "endeavor" as "to exert physical and intellectual strength toward the attainment of an object; a systematic or continuous effort") (quoting Webster's New International Dictionary).

Nevertheless, neither a purchaser nor an owner may alter a project without the possibility of a consequence. If a project is altered by a purchaser, for example, the development regulations are no longer locked in under chapter 245 and current development regulations apply. Whether a particular project has changed so as to lose the protections granted by chapter 245 is a question that must be resolved by the local regulatory agency with jurisdiction in the matter. The statute defines "regulatory agency" as "the governing body of, or a bureau, department, division, board, commission, or other agency of, a political subdivision acting in its capacity of processing, approving, or issuing a permit." TEX. LOC. GOV'T CODE ANN. § 245.001(4) (Vernon Supp. 2001). Nothing in chapter 245 provides any other body jurisdiction to decide such a question. Cf. id. § 245.005 (authorizing regulatory agency to adopt rules placing expiration date on dormant projects). Furthermore, this agency cannot determine whether a project has changed, as the question cannot be resolved without considering fact questions. Fact questions are not amenable to the opinion process. See, e.g., Tex. Att'y Gen. Op. Nos. JC-0032 (1999) at 4 (stating that question of fact is beyond purview of this office); JC-0027 (1999) at 3 (stating the questions of fact cannot be addressed in attorney general opinion); JC-0020 (1999) at 2 (stating that investigation and resolution of fact questions cannot be done in opinion process).

                                   SUMMARY

           Under section 245.002 of the Local Government Code, property for which an original application for the first development permit has been filed remains subject to the orders, regulations, ordinances, rules, expiration dates, or other requirements that were effective at the time the application was filed for the duration of a project, regardless of any changes in ownership that may occur before the project is completed. See TEX. LOC. GOV'T CODE ANN. § 245.002(a), (b) (Vernon Supp. 2001). If a project changes, however, the project becomes subject to current development regulations. See id. § 245.001(3) (defining "project"). Whether a particular project has changed so as to lose the protections granted by chapter 245 is a question that must be resolved by the local regulatory agency with jurisdiction in the matter. See id. § 245.001(4) (defining "regulatory agency").

                                         JOHN CORNYN
                                         Attorney General of Texas

HOWARD G. BALDWIN, JR.
First Assistant Attorney General

NANCY FULLER
Deputy Attorney General - General Counsel

SUSAN D. GUSKY
Chair, Opinion Committee

Kymberly K. Oltrogge
Assistant Attorney General, Opinion Committee