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Multiphase developments may soon get vesting rights

The North Carolina General Assembly has passed a bill granting vesting rights to multiphase projects, in effect providing assurance to developers that they can carry out their original plans  when governing bodies change development rules after a site plan has been submitted. The bill, ratified on July 1, awaits Gov. Pat McCrory’s signature.

The bill grants vesting rights for seven years, allowing developers of approved multiphase projects to adhere to the existing zoning, building or subdivision ordinances that were in effect when the site plan was submitted for the initial phase of the project. Developers also would have the option of following any new city or county ordinances implemented after the site plan was submitted.

The law defines a multiphase development as a project encompassing at least 100 acres. To be eligible for vested rights, the developer would be required to have submitted a site plan for construction to occur in more than one phase, as well as a master development plan with committed elements.

N.C. Rep. Jonathan Jordan of District 93, who introduced House Bill 483, said the change keeps governing authorities from “changing the rules in the middle of a multiphase development that has already received approval.” He said concerns from the North Carolina Home Builders Association about such occurrences prompted him to sponsor the bill.

Tim Minton, director of government affairs at the N.C. Home Builders Association, agreed with Jordan’s assessment.

“This creates clarity in the process once you’ve been approved,” he said. Minton said that previously, developers of multiphase projects had little recourse if, for example, a governing body amended its ordinances on the types of structures it would allow or the amenities required in a project.

“They either had to agree or go through a legal battle,” he said. “Investors and banks are not interested in that.”

Minton said House Bill 483 closes a gap. Similar reforms have already been granted for non-multiphase projects and those requiring zoning permits.

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