Against the backdrop of a confusing procedural history, the Court found that a provision in a zoning ordinance that terminated a variance due to non-use for one year was not an unconstitutional taking of the owner’s property. However, as with another relatively recent opinion, this opinion does not address the takings issue head-on, because the question was not placed squarely in front of the Court to decide.
The case involved a piece of property in a residential zone for which a variance had been granted in 1985 to conduct certain auto repairs. In the late 1980s, the property was not used for auto repair for more than one year as a result of a foreclosure. At that time, the Town’s zoning ordinance provided: “[V]ariances not used for one (1) year or longer shall expire by operation of law at the end of said one year period.” In 2004, Huard purchased the property. He lived in the home and opened a transmission repair business on the property. In 2006, the code enforcement officer issued a letter saying the business was illegal because the variance had expired in 1989.
What followed was a confusing series of steps. Huard did not appeal the code enforcement officer’s decision. Instead, he filed for a new variance in 2006, which was denied. He did not appeal that denial. The Town repealed the zoning provision regarding variance expirations in 2007 and, a few months later, Huard filed a petition in the Superior Court asking for an injunction against the Town’s enforcement actions against him and a declaratory judgment that he could operate his business under the original variance. By agreement, the trial court stayed the suit to allow the zoning administrator to revisit the issues of whether Huard’s use was within the scope of the 2005 variance and, if so, whether that variance was still in effect due to repeal of the expiration clause in 2007. At the end of that process, the zoning board of adjustment (ZBA) found the variance was broad enough to include transmission repair, but that, nevertheless, it had expired in 1989 while the expiration provision was still in effect, so Huard could not use it. The trial court ruled in favor of the Town, and Huard appealed.
On appeal, one issue was whether Huard’s suit was barred for failure to exhaust his administrative remedies when he appealed neither the 2006 decision of the code enforcement officer that his use was illegal, nor the denial of his new variance application. Under New Hampshire law, administrative remedies such as appeals to the ZBA and requests for rehearings must be exhausted before a party files with the superior court. Property Portfolio Group v. Derry, 154 N.H. 610 (2006). Huard argued he was not required to do that in this case because it was an “obvious” waste of time and his requests would likely be denied. The Court noted that it is proper in some cases to proceed directly to the superior court when the question is “particularly suited to judicial rather than administrative treatment and no other adequate remedy is available.” However, the Court found that this was not one of those cases, ruling that the application of the zoning ordinance to the specific facts of Huard’s case was “precisely” the kind of issue that belongs in the first instance to local officials.
The Court then considered whether the expiration of this variance was an unconstitutional taking of Huard’s property. Under Part I, article 12 of the New Hampshire Constitution, government regulation can be a taking of property if the restriction is arbitrary or unreasonable and substantially deprives the owner of the economically viable use of his land. In particular, a use restriction may be a taking when it is “so restrictive as to be economically impracticable, resulting in a substantial reduction in value … and preventing the private owner from enjoying worthwhile rights or benefits in the property.” Pennichuck Corp. v. Nashua, 152 N.H. 729 (2005). Huard did not present evidence that his property would be substantially reduced in value if he could not use it for transmission repair, and, in fact, he could still live in the house and there were potential purchasers interested in buying it. As a result, the Court found that under these specific facts, “expiration of a use variance is not equivalent to the prohibition of all normal private development.”
This opinion may imply to some that it is constitutional for a variance to expire if it has been “abandoned” for a certain length of time. A similar implication was raised by the Court’s opinion in McKenzie v. Eaton, 154 N.H. 773 (2007), where the Court upheld a prohibition against the rebuilding of a pre-existing nonconforming use after abandonment of one year or more. In both cases, however, the Court was not asked the direct question of whether a zoning provision that extinguishes previously legal vested development rights is a taking. In the Eaton case, the plaintiff claimed her substantive due process rights had been violated when she was not allowed to rebuild a nonconforming structure, and the Court applied a less rigid test to the question. In the present case, the plaintiff claimed the ordinance was unconstitutional as applied to his specific situation, but he did not ask the Court to decide whether the provision was unconstitutional on its face. We can only wait to see what the Court does if and when the question is brought before it.