In early August, the state Legislature passed the Permit Extension Act, aimed at curbing the real estate development downturn.
The Act creates an automatic two-year extension for certain permits and approvals that were issued or in effect from Aug. 15, 2008 through Aug. 15, 2010.
While passage of this legislation was largely viewed as positive by the regulated community, the sweeping language left many in the dark as to whether a given permit or approval was truly subject to an extension.
On Nov. 9, 2010, the state’s Executive Office of Housing Economic Development (HED) issued a much anticipated Frequently Asked Questions document that clarifies several of the new law’s ambiguities. While this guidance document provides many answers as to the Act’s intended application, but there remains a lot of unanswered questions remain.
While the Act only specifies a handful of statutes whose permits qualify for extension under the law, the guidance makes it clear that aside from carve-outs for approvals of federal laws, Chapter 40B and Fisheries and Wildlife approvals, the statutory extension applies to all qualifying permits issued by any municipal, regional or state entity. It also makes it clear that the term “approval” does not include enforcement orders.
The state’s guidance also notes that if a qualifying approval was issued or in existence during the qualifying period, the holder of the approval need not do anything to secure its right to an extension. Further, if such approval expired during the qualifying period, it is now revived and will be set to expire two years after the prior expiration date. (The revival only applies to permits that expired; the Act will not revive a permit that was previously revoked.)
The state’s guidance further clarifies the obvious ambiguities for those permits which had issued but were subject to appeal. For example, a permit that originally was issued during the effective dates, but remained under administrative appeal after Aug. 15, 2010, would not qualify for the extension because the permit or approval had not become “final.” Conversely, if a judicial appeal was taken and not favorably resolved until after Aug. 15, 2010, such a permit would be extended under the Act.
Finally, both the Act and the guidance consistently read that the permits qualifying for the automatic extension are those that were in effect or existence during the qualifying period. In other words, the permit or approval did not need to be issued within the qualifying window, but merely be “in effect or existence.”
Ambiguities Remain
While it is expected that the state’s guidance document will provide a bit of substance to the otherwise lean piece of legislation, the recently issued FAQ document is not all-inclusive, and the practical realities of complex permits will create further gray areas.
For example, the state guidance provides that “pre-development” approvals are not extended. The only example given within the FAQ, however, is oil- or hazardous material-cleanup activities. The guidance does not address what other types of approvals may be considered “pre-development.”
Under both the Wetlands Protection Act (WPA) and the Massachusetts Endangered Species Act (MESA), a developer may seek a determination of applicability (under the WPA) or a “no take” determination (under MESA) in planning a project. While not clearly set out in the guidance, the logical interpretation is that such determinations would qualify as a development permit, rather than a pre-development approval.
In another gray area, the guidance document states that interim deadlines contained within an approval or permit are extended under the Act. The guidance is not clear, however, as to what if any impact the legislation may have on related obligations of the developer.
For instance, with an extended subdivision approval, if a developer misses a construction deadline within a performance bond, is the developer’s bond forfeited even though the subdivision approval is extended for two years?
Through the guidance document, the state has taken an expansive and pragmatic reading of the Permit Extension Act. Application of the Act requires a similar interpretation by municipal agencies, as well as the confidence of the lending community.
Attorney Stephanie A. Kiefer is of counsel at Smolak & Vaughan, North Andover. Her practice focuses on land use law and environmental permitting, as well as administrative and judicial appeal of permitting matters. She can be reached at SKiefer@smolakvaughan.com.
