Gov. Paul Cellucci recently signed into a law a bill concerning dispute resolution among developers and municipal boards that homebuilders say could help streamline the process of getting a project approved and ultimately pass some cost savings on to consumers.
On Aug. 10, Cellucci approved House bill 4970, an act relative to the use of alternative dispute resolution.
According to the Home Builders Association of Massachusetts, one of the principal sponsors of the legislation, the purpose of the bill was to encourage the use of mediation, rather than litigation, to resolve disputes arising from the disapproval of subdivision plans by local planning boards.
Under the previous law, if subdivision plans were not approved by a local planning board, a developer would file litigation and start the process to appeal the decision. Filing an appeal enacts a zoning freeze, which allows the project – if approved – to proceed despite any zoning changes that may have taken place affecting the property after the appeal was filed.
However, a developer who chose to enter into mediation sessions with a city or town instead of going through the trial process was not afforded the same stay of the running of his or her zoning-freeze protection.
The loss of zoning-freeze protection, homebuilders and other developers maintained, was a significant disincentive for them to use mediation to settle a dispute rather than going to court.
The proposed legislation amended the Zoning Act, specifically Section 6 of Chapter 40A, to provide the same zoning protection for a decision at the conclusion of voluntary mediation proceedings as it does for an order issued by a court of final jurisdiction.
“It’s a nice avenue to have to settle cases versus planning boards,” said Eugene L. Tougas, a retired lawyer and member of HBAM from Waltham who worked on crafting the bill.
“When a planning board sees that they didn’t have a hold over a homebuilder to make compromises over differences of opinion, they would issue a disapproval of the plan,” he said. “And a developer, afraid of losing his zoning, would take the matter to court and remain stubborn so he would be able to use the zoning freeze.
“When you enter into litigation, there are possibly two losers,” he added. “The planning board may lose the case, but the developer may also lose because he may want to make a small change to the plans but can’t” because the zoning freeze applies only to the exact plans originally submitted when the freeze began. “This removes one impediment to settling a case.”
Finley Perry, a Hopkinton-based builder and legislative chairman of HBAM, said while the new law pertains to building projects, builders themselves would not be the ones most affected by it.
“This is something more useful for lawyers,” he said. “The people who represent homebuilders are the ones that really wanted this and pushed hard for it. [The homebuilders] are going to have to take time to learn how to use this new law.
“This is something cities and towns should also be very interested in,” he continued, explaining that keeping development disputes out of the courts also saves on legal fees siphoned from town coffers when a planning board is embroiled in a lengthy legal battle.
“When a planning dispute is brought to court, a judge often asks the parties if they can hammer something out amongst themselves anyway,” Tougas said. “And oftentimes these things go to court over peanut issues” such as street locations, lot shapes or drainage concerns, he said.
“This law helps reduce some of the costs and complexities associated with litigation,” Perry said, “and it helps relieve some of the backlog building up in the courts.”
“Judges have more important cases they have to get to,” Tougas added.
‘Better All Around’
Perry pointed out that the bill does not give any extra power to developers than they had before, nor does it take away from the rights of a city or town. It does, however, place mediation on equal footing to litigation in regards to the effect of subsequent zoning changes on a plan when the developer files an appeal.
In addition to possibly saving on legal costs, money may also be saved through mediation if a project no longer has to sit idle while an appeal winds its way through the courts.
“There’s a reasonable assumption, based on the fact that everything is so costly these days, that it could save money,” Perry said. Those savings could eventually be passed on to the consumer who ends up buying a piece of property in the subdivision.
Perry said the bill – which was also endorsed by the Massachusetts Federation of Planning and Appeals Boards – falls in line with Cellucci’s desire to streamline permitting processes across the state.
“This bill wasn’t just aimed at helping out the homebuilders,” he said. “We’ve been working on coming up with ways to make things better all around. We proposed this along with the cluster by-right zoning bill as part of a whole package aimed at making things better.
“And we intentionally sought out the help of organizations that normally wouldn’t line up with the homebuilders to make sure it was right for all sides,” Perry said, adding that HBAM worked with the Massachusetts Audubon Society on the cluster zoning bill. The alternative dispute resolution bill was drafted with input from the Massachusetts Office of Dispute Resolution and the Massachusetts Department of Housing and Community Development.
“I feel good about this one, based on my experiences,” said Tougas, who has represented several developers and worked with planning boards throughout his career. Tougas still acts as a consultant to some lawyers and builders.
“I think you’re going to see more and more cases settled rather than tried in the courts,” he said. “As long as developers don’t lose their zoning rights, I think they’ll go along with it.”
“We thought this was something we just ought to pursue,” Perry said of HBAM’s decision to sponsor the bill. “This was almost a housekeeping item. The government is looking to streamline, and the legislature agreed and said this makes sense.”
