Municipalities may waive the ability to enforce zoning regulations by failing to pursue enforcement proceedings against known zoning violations for long periods of time.  This defense, known as equitable estoppel, was the dispositive issue in the Commonwealth Court’s recent decision in Victory Gardens, Inc. v. Warrington Township Zoning Hearing Board and Warrington Township, No. 1716 C.D. 2018 (Pa. Commw. 1/6/20).  Although equitable estoppel is an unusual remedy granted only in extraordinary circumstances, the court held that the defense applied where the Township failed to timely initiate enforcement proceedings against an unpermitted use that the Township knew about for 16 years.

In March 2015, the Township Zoning Officer issued a written notice of violation to inform a landowner that its mulching operation was an industrial use not permitted in the Township’s Residential Agricultural (RA) Zoning District.  The landowner appealed to the Township Zoning Hearing Board (ZHB).  After conducting 15 hearings over a two-year period, the ZHB issued a 2-2 split decision on whether to grant or deny the appeal.  By operation of law, the appeal was deemed denied.  The landowner appealed to the court of common pleas, which affirmed the denial.  The Commonwealth Court reversed, holding that the doctrine of equitable estoppel precluded the Township’s enforcement action.

Individuals may acquire a right to continue a use that is otherwise not permitted under equitable estoppel.  To establish equitable estoppel, a landowner must prove that the municipality intentionally or negligently misrepresented its position with reason to know that the landowner would rely upon the misrepresentation.  The landowner must also establish good faith by showing: (i) the landowner relied to its detriment in making substantial expenditures, (ii) an innocent belief that the use is permitted, and (iii) that enforcement would result in hardship in the value of expenditures that would be lost.  The landowner must prove these essential factors by clear, precise, and unequivocal evidence.

The landowner in Victory Gardens established equitable estoppel by showing that it relied upon a misrepresentation of the Township that it was allowed to operate a mulching operation without obtaining a permit and that the Township was aware of that this use occurred for years thereafter.

First, the landowner consulted with the Township’s zoning officer before beginning the use.  The Township’s zoning officer stated that the landowner could lawfully operate a mulching operation without a permit.  This occurred in 1999, approximately 16 years before the Township initiated the enforcement proceeding.  Evidence showed that the Township was completely aware of the mulching operation because the Township inspected and even patronized the facility in the intervening 16-year period without notifying the landowner that the operation was illegal.

Second, the Township repeatedly confirmed that the landowner could run its mulching operation without a permit and/or variance.  In 1999, the Zoning Officer informed the landowner that the mulching operation was permitted by right.  In 2002, Township officials stated at a public meeting that the mulching operation was a permitted use.   In 2012, the Township’s Board of Supervisors adopted a Memorandum of Understanding establishing terms to regulate the mulching operation.

Third, the landowner showed that it leased the property in question to perform mulching operations after the Zoning Officer’s 1999 confirmation that the use was permitted.  The landowner purchased equipment in excess of $400,000 to perform the mulching operations and acquired a retail facility for approximately $950,000.   The court was also concerned that 15-20 employees would lose their jobs if the facility was closed.

Fourth, the Commonwealth Court rejected the trial court’s conclusion that the landowner did not act in good faith in the context of the equitable estoppel defense.  Although the landowner had allegedly not complied with the terms of the 2012 Memorandum of Understanding, this did not negate the landowner’s good faith belief that the mulching operation was a permitted use at the time it began in 1999.

This case demonstrates the extraordinary facts needed to establish equitable estoppel.  In ordinary circumstances, a municipality will be able to enforce its zoning ordinance, even where there is a delay in enforcement of a known violation.  Equitable estoppel will only apply where there is a misrepresentation, detrimental reliance, and a substantial delay in enforcement.