1999 update on the Bert J. Harris Private Property Rights Protection.

• Author: Weaver, Ronald L.
• Position: Florida

In 1995, the State of Florida took a leadership position among states after its courts failed to clearly address the issues surrounding the protection of private property rights by enacting the Bert J. Harris, Jr., Private Property Rights Protection Act, as F.S. Ch. 70.001.[1] The act creates a new cause of action for aggrieved property owners who demonstrate that governmental action occurring after May 11, 1995, "inordinately burdens" property and provides a formal process for addressing and resolving differences between landowners and governments. Claims brought under the act must meet a less stringent standard than the formal finding of a "taking." The act is not a constitutional amendment, but is separate from and additional to current protections provided by the Constitution, other legislation, and case law.[2]

Under Part I of the act, which took effect on October 1, 1995, a landowner must show, with an appraisal in hand, that unreasonably "disproportionate" limitations or restrictions on investment-backed expectations for the existing use of the real property or a vested right to a specific use of the real property are caused by an action of government.[3]

Part II of the act provides a special master mediation process for property rights disputes. A landowner alleging a government action, or an enforcement of a government action, is either 1) "unreasonable," or 2) "unfairly burdens" the property's use, may apply for relief within 30 days after such governmental action. This Part II conflict resolution relief is available even if the offending law was enacted before May 11, 1995, unlike Part I, which offers relief only from laws enacted after that date.

Cases Under the Act

By February 4, 1998, there were 12 reported Part I cases. By June 23, 1998, there were twice that many, with almost $40 million arising in Miami Beach over floor to area ratio (F.A.R.) and unit bonus reductions that took effect January 31, 1998. On January 21, 1998, the City of Miami Beach adopted Ordinance No. 98-3107, which amended the city's zoning ordinance by deleting any allowable design bonuses. Based upon this ordinance, the claimants listed in the box below filed claims under the act, each alleging their properties are "inordinately burdened" by the city's passage of the ordinance:

Dennis O. Morin asserts that the ordinance "inordinately burdens" the properties of 1766-76 Michigan Avenue, 1769 Lenox Avenue, and 1026 18th Street, Miami Beach, as a result of a reduction in the maximum allowable F.A.R. due to the elimination of design bonuses. As required under the act, Morin attached an appraisal to his claim, alleging a $392,000 loss. F.S. [sections]70.001 (1995).

The city's response, dated December 4, 1998, presents defenses similar to those the city delineated two years earlier in U.S.A. Express Inc. v. City of Miami Beach, BH-96-13-02, BH-96-13-03, BH-96-13-05, stating that the act is unconstitutional, that Morin's claim is not ripe, and that the ordinance does not inordinately burden the properties.

First, the city challenges the act's constitutionality and maintains it sets forth a cause of action requiring the city to expend public funds to satisfy a judgment against the city. See Kaulakis V. Boyd, 138 So. 2d 505 (Fla. 1962) (Dade County commissioners had a right and duty to challenge the validity of a home rule charter which purported to make the county liable in tort to the same extent as municipalities since judgment for plaintiff would require the county to expend public funds to satisfy it). Additionally, the city alleges that the act violates due process requirements because it purports to make the city liable for actions which "inordinately burden" property, because that standard is overly vague and is not sufficiently delineated within the act's language. Further, the city argues that the act violates the separation of powers provisions of the Florida Constitution, in that it legislates a determination of ripeness which is a judicial, not a legislative, function. See also Rogers & Ford Construction Corporation v. Carlandi Corporation, 626 So. 2d 1350 (Fla. 1993) (legislatures may regulate property rights concerning condominium property, but only courts can constitutionally determine whether a party has standing).

Second, the city argues the mere claim of lost value due to a change in land development regulations is speculative and emphasizes that Florida courts have adopted a federal ripeness policy requiring a "final determination from the government as to the permissible uses of the property" in taking cases. Martin County v. Section 28 Partnership, Ltd., 676 So. 2d 532, 538 (Fla. 4th DCA 1996) (at least "one meaningful application" is required for such final determination).[4] In Martin County, a takings claim was not ripe for review when there were reasonable economic uses under existing regulations for the subject property. Further, the claimant had not sought development of the property; therefore, the extent of the taking, if any, could not be quantified. See also City of Riviera Beach v. Shillingburg, 659 So. 2d 1174 (Fla. 4th DCA 1995) (a landowner's reasonable economic expectations for the property is the landowner's proposed use of the property as evidenced by an application for such use). The city also looked to Taylor v. Village of North Palm Beach, 659 So. 2d 1167 (Fla. 4th DCA 1995), in which a landowner brought suit alleging the village's enactment of a comprehensive land use plan resulted in a taking without just compensation. In determining that the case was not ripe for review, the court acknowledged the following:

One of the difficulties in analyzing this case, is that it does not involve a concrete development proposal for the property. Plaintiff is taking the position that the mere enactment of the plan constituted a taking. Plaintiff has not actually sought a permit or approval from any agency for a proposed development. It is difficult to speculate on what type of development might be allowed by Defendant or whether any other regulatory critics would place road blocks to development, regardless of Defendant's zoning or land use classification.

Taylor, 659 So. 2d at 1173.

The city analogized Morin's claim to one claim filed in the Third District Court of Appeal. In that case, the creation of a historic district did not amount to an unconstitutional taking when the affected landowners had not attempted to obtain any permits under the ordinance creating the historic district, and the affected government entity had not reached a final decision regarding the ordinance's application.[5]

Third, the city asserts that Morin's claim is not valid because under the act, a claim may not be commenced until the challenged government action, "as applied, unfairly affects real property."[6] The city contends Morin's claim will not be ripe until requests for variances, permits, or approvals required for development are made and denied.

Fourth, the appraisal assumed the properties were zoned RM-1. The city claims the assumption is incorrect, declaring instead that the properties were deemed zoned TH pursuant to the city's comprehensive plan, which became effective in 1994, prior to the act's effective date.[7] Therefore, the city claims no cause of action can be stated under the act, pursuant to F.S. [sections] 70.001 (12). It states "no cause of action exists under this section as to application of any law enacted on or before May 11, 1995, or as to the application of any rule, regulation or any ordinance adopted, or formally noticed for adoption, on or before that date."

Further, the city maintains the ordinance's adoption does not "inordinately burden" the properties. The city submits that prior to the ordinance, Morin, as an applicant in the TH district, may have qualified for some bonuses. However, the city comments that the practical restrictions imposed upon the development of small scale projects such as Morin's make design bonuses more difficult to obtain. Even if bonuses could be obtained, the city contends that the differential in value of the properties before and after the passage of the ordinance would be insignificant relative to the overall value of the properties. Furthermore, the city interjects that assuming bonuses could not be obtained, the ordinance actually benefits Morin, by increasing the base F.A.R. from .7 to .75. According to the city, not only were the zoning assumptions in the appraisal incorrect, but so was the conclusion that there was a reduction in the properties' value by the ordinance's passage.

Finally, the city submitted its settlement offer, as required under the act.[8] The city advised "no changes to the action of the government entity" be made relating to the adoption of the ordinance. It is critical to note, however, that the act "may not necessarily be construed under the case law regarding takings."[9]

Two years before Morin, in USA Express, the city passed Ordinance No. 96-3037, designating areas of the Ocean Beach as a historic district. The plaintiff asserted the city's act constituted an "inordinate burden" which permanently restricted and limited the use of his property. The city presented several defenses which became the prototype for the defenses asserted in Morin.

First, the city challenged the act on constitutional grounds, claiming it 1) violated due process requirements, as it renders governments liable for regulations which inordinately burden property, that determining standard being too vague; and 2) violated the separation of powers, as the act creates ripeness for review of the government action, which is a judicial function, rather than a legislative one.

Second, the city observed that a government must have made a "final determination" as to permissible uses of the property in order to constitute a taking under the act and alleged no application for development had been made, much less denied, and, therefore, the owner's claims...