The Vermont Approach

Vermont is an “early vesting” state, giving the developer vested rights in the law as it stood at the time of the application for a permit. (In contrast, the majority of states follow the so-called “late-vesting” rule under which rights vest in the law only as it is after the developer has received a validly issued permit and has incurred substantial liabilities in good faith reliance on the permit.) The Vermont Supreme Court first embraced the early vesting rule in Smith v. Winhall Planning Commission,1  decided in 1981. In that case, the Court considered whether a landowner’s application for approval of a subdivision should be governed by zoning regulations in effect at the time of the application or by later amendments. The Court held that the applicant’s rights vested under the “then existing regulations as of the time when proper application is filed.”  According to the Court,
“The minority rule is, we feel, the more practical one to administer.  It serves to avoid a great deal, at least, of extended litigation.  It makes for greater certainly in the law and its administration.  It avoids much of the protracted maneuvering which too often characterizes zoning controversies in our communities.  It is, we feel, the more equitable rule in long run application, especially where no amendment is pending at the time of the application.”2The Winhall Court further supported its choice of rule by invoking the policy behind 1 V.S.A. §213, which provides that “…acts of the general assembly…shall not affect a suit begun or pending at the time of their passage.”  The Court cited and quoted an earlier case, In re Presault, regarding a land use plan adopted after the approval of an Act 250 permit, where the Court held that, by virtue of that statute, the intervening adoption of the plan was “ineffective to derail proceedings validly brought and pursued in good faith to implement rights available under previous law.”

While Vermont remains an early vesting state, the following discussion of subsequent decisions shows that Winhall has been narrowed in significant respects that reflect a balance of developer and municipal interests: The application that triggers vesting must indeed be proper, the proceedings must indeed be brought validly and in good faith, and the vesting of rights in one permit does not necessarily vest rights in a different permit subsequently sought for another phase of the same project.

A Vermont statute, 24 V.S.A. §4449(d), also modifies the early vesting rule by striking a balance more favorable to the municipality in certain cases.  The statute comes into play if a party applies for a land use permit after the town has given official notice of a public hearing by the legislative body concerning the adoption or amendment of a land use bylaw. Municipal authorities must then “for a period of 150 days following that notice… review any new application filed after the date of the notice under the proposed bylaw or amendment and applicable existing bylaws and ordinances.” The statute further provides that if the 150-day period expires without the proposed bylaw or amendment being adopted, or with it being rejected, the existing bylaw and ordinances control. Thus, if the bylaw or amendment is adopted during the 150-day window, the newly adopted provision applies to the application. If the proposed bylaw or amendment is not adopted, or is rejected, the developer has a vested right to consideration under the law as it existed at the time of the application.1 140 Vt. 178, 436 A.2d 760 (1981).  Summaries of cases cited in the footnotes are found in Summary of Vermont Supreme Court Decisions.  Further information is found in the Resources section.
2 140 Vt. at 181-82, 436 A.2d at 761.
3 132 Vt. 471, 474, 321 A.2d 65, 66 (1974).