Honey Brook Estates, LLC v. Bd. of Supervisors of Honey Brook Twp., 132 A.3d 611 (Pa. Commw. Ct. 2016).
The duty of good faith includes (1) “discussing matters involving technical requirements or ordinance interpretation with an applicant” and (2) “providing a reasonable opportunity to respond to objections or modify plans where there has been a misunderstanding or difference of opinion.”
Developer owned land that was zoned residential. On May 15, 2006 it learned an upcoming amendment to the Zoning Ordinance (Amendment) would rezone most of the land from residential to agricultural. The day before a public hearing on the Amendment, Developer submitted a preliminary subdivision and land development plan to develop a townhome community. One week later, the Township Engineer informed Developer that its plan was incomplete and would not be forwarded to the Planning Commission. Developer submitted an amended plan ten days later, on June 30, 2006, which addressed each concern listed in the Township Engineer’s letter. On July 5, 2006, the Township passed the Amendment. The Township Manager then rejected Developer’s amended plan on July 10, 2006, citing three reasons for rejection.
Developer sent a letter requesting reconsideration and objecting to the rejection on the grounds the Township imposed requirements that had never previously been imposed on a preliminary plan. Without Developer’s knowledge, a Township staff member submitted the plan to the Planning Commission along with new reasons and additional material suggesting the denial of Developer’s plan. Developer was not given an opportunity to present supplemental information to the Planning Commission. Developer’s plan was subsequently denied. Developer appealed to the trial court which affirmed the Township’s decision on the grounds that it was not reasonably likely for the Developer to overcome the Township’s objections. Developer then appealed to the Commonwealth Court, asserting that the trial court erred in failing to find that (1) the Township acted in bad faith and (2) the objections could be easily overcome and, in the alternative, were illegal.
On appeal, the Commonwealth Court reversed the trial court’s decision. The Court held a municipality has a legal duty of good faith to applicants. The duty of good faith includes (1) “discussing matters involving technical requirements or ordinance interpretation with an applicant” and (2) “providing a reasonable opportunity to respond to objections or modify plans where there has been a misunderstanding or difference of opinion.” Here, the Township failed to provide Developer with the opportunity to confer with the Township. The Township also changed its review process without informing Developer or providing an opportunity to submit supplemental information. Further, the Township allowed its staff to include, with Developer’s amended plan, volumes of additional material and more reasons to reject Developer’s amended preliminary plan. Together, these acts constituted bad faith.
Developer was also correct in asserting its ability to easily modify the plan in response to the Township’s reasons for denial. The Township gave three reasons for its conclusion that Developer’s plan could not be corrected: (1) the property was not entirely situated in the Township’s sewer district and, therefore, could not be served by public sewer; (2) density requirements limit the development to 76 units, yet Developer’s plan proposed 78 units on the property; and (3) the property was located outside the Pennsylvania Public Utility Commission’s water service area, but the plan proposed public water service. The court agreed with Developer’s arguments that Developer can easily modify the density and that sewer and water issues are not fatal to the preliminary plan.
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