REAL ESTATE LAW /
RESORT LAW
Navigating the Regulatory
Maze of Development
September
2003
By Donald
E. Gartrell*
Subdividing and developing real property
in New Hampshire requires navigation through numerous regulatory obstacles.
To manage these potentially long and costly processes, developers must devise
appropriate and efficient strategies to effectively pursue development projects
and approvals before converting a proposed project into a commercial reality.
Among the strategies are:
Obtain and review local ordinances, applications and checklists
early: Most New Hampshire municipalities have enacted subdivision
and site plan review regulations to promote planned and orderly
growth. The developer
should obtain the most current versions of all ordinances, checklists
and applications well in advance of filing a subdivision application
and site
plan with the planning board.
The developer and the project team also should carefully review these materials
to determine whether the proposed development complies with applicable regulations,
understand the technical specifications and identify and begin preparing
for regulatory hurdles. If it appears from this preliminary review that the
proposed development might not conform to any applicable provision, the proposal
can be adjusted to avoid nonconformity, or the developer can make any necessary
waiver or variance requests. Early identification of potential areas of noncompliance
can save the developer significant costs and time later on.
Hire surveyors, engineers and attorneys prior to filing an application: Site
plan review and subdivision application processes typically require a variety
of development and legal experts. Most projects
will require a
surveyor to prepare site plans. In addition, many projects involve
the potential for wetlands impacts, and thus require the services
of a wetlands scientist.
Some projects also may require consultation with hydrologists,
property valuation experts and environmental engineers. Lastly,
a qualified land use attorney
can often serve as a valued project coordinator and regulatory
liaison.
It is critical that project experts be retained to review the
applicable regulatory checklists and draft applications
before filing with the regulators. Doing this can avoid costly errors, ensure
compliance
and
correct problems before regulators draw preliminary impressions.
Selecting competent experts and submitting accurate, comprehensive and compliant
applications will help develop trust with local officials and greatly improve
the chances of obtaining timely approvals.
Consider and prepare for opposition and arguments: Proposed
developments often draw substantial opposition from neighboring land owners
and conservationists.
Developers should anticipate and prepare for arguments
from other interested parties to help ensure a thorough and supportive public
record and reduce
the likelihood of successful opposition. Moreover, an
organized permitting process often helps interested parties understand the
details of a proposed
development, and thus can often avoid opposition based
upon incorrect or incomplete information and assumptions.
Anticipating and addressing the opposition to a project at this early stage
fosters amicable relationships with neighbors, conservationists and municipal
officials, while helping to reduce expensive and delay-causing opposition
to the development.
Pre-application review: Many municipalities provide applicants
with an opportunity to engage in pre-application review
sessions with planning officials before more formal review of the application.
This allows the developer
to familiarize planning officials with the project and
start building a relationship with officials and the board. Such review sessions
also provide planning
officials with an early opportunity to identify and retain
experts to assist with its review of the application.
Identify deed restrictions and covenants that may affect
land division: Even if the developer designs a project that is entirely compliant with all
applicable regulations, the project can sometimes be derailed by covenants
and restrictions contained in deeds affecting use of the land. Consulting
with a land use attorney to determine the impact and enforceability of deed
restrictions can help developers and planning officials to better understand
the effect of restrictions and help to avoid costly and embarrassing changes
later in the project.
Identify and quantify current use tax liability: If the project
site has been classified as “current use” by the developer or
a prior owner, there are significant tax consequences to developing the parcel.
When the developer changes the use of such a parcel, state law imposes a
land use change tax equal to 10 percent of the current market value of the
parcel at the time of the change in use. The land use change tax is not triggered
by the planning board’s approval of a project; rather, it is triggered
by the physical commencement of construction or excavation of the site to
change its actual use, or by reduction of the land registered in current
use to less than 10 acres. For valuation purposes, this tax uses the “highest
and best use of the land, including the value of all betterments serving
the land.”
A frequent source of tension between developers and municipalities is whether
the valuation of the land in current use at the time the land use actually
changes includes the value of any betterments or improvements related to
the land in question. To minimize this issue, development plans should include
notification to local assessors as soon as the land use change occurs.
If a project site is in current use, the developer should consult with appropriate
legal, tax and land valuation advisers to devise a cost-effective strategy
for minimizing change in use tax liability.
Many development projects will require wetlands and site-specific
permits from the state Department of Environmental Services: If
the proposed project has an impact on wetlands, the developer may have to
obtain wetlands
permits from DES, which often include additional obligations
to perform compensatory wetlands mitigation to compensate for
permanent wetlands impacts resulting
from the project. The so-called “site-specific permit” will address
erosion, siltation and runoff issues associated with the project.
Depending on the project, the developer may need to obtain other state permits.
For example, if the development will include the installation of septic systems
at a subdivision, the developer will be required to obtain DES approval of
their design.
During the planning stages, the developer should consult with
legal advisers and environmental consultants to determine whether state permits
are necessary. To avoid delays associated with the state’s review of
permit applications, the developer should plan to file any necessary permit
applications early in the project.
File for attorney general subdivision registration before
construction: Certain residential developments must be registered with the Bureau of Consumer
Protection of the attorney general’s office under the Land Sales Full
Disclosure Act. While a discussion of the specific requirements of the act
is beyond the scope of this article, an attorney should be consulted during
the planning stages of the project to determine the registration requirements
for a particular project and to assist with the preparation of any application
for registration or exemption under the act.
*Donald E. Gartrell is admitted in New Hampshire.
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