Constructive Approval and Rescission of Real Estate Development and Environmental Permits

The Appeals Court recently ruled in favor of a landowner whose subdivision approval for real estate development had been wrongfully revoked by a town. This is an important victory for property owners in real estate and environmental permitting and litigation.

In the particular case (Czyoski vs. Planning Board of Truro), the owner’s subdivision plan had been “constructively” approved by the local planning board because the board failed to act on the application in a timely manner, in violation of Section 81U of the Subdivision Control Law, General Laws Chapter 41. The board sought to undo its error by rescinding its constructive approval under Section 81W of the Subdivision Control Law.

After the owner sued the board, the Land Court ruled that the board failed to justify the rescission based on any substantive concerns about the proposed subdivision development. On appeal, the Appeals Court affirmed the Land Court, holding that a planning board may not rescind its approval of a subdivision plan (whether constructively or otherwise approved) unless there was “good reason” to do so. The Court ruled that the local board made no effort to substantiate its stated concerns regarding traffic safety. Because the board had no basis for its alleged concerns, the board was prevented from rescinding its approval of the plan. Without a defensible substantive reason for denying the application in the first place, the board did not supply “good reason” to rescind its constructive approval, and the rescission decision could not stand.

This Truro case is important because it stands for the proposition that a permit granting board cannot revoke or rescind real estate or environmental permits or approvals without an underlying substantive basis for doing so. Although the case concerns constructive approval under the Subdivision Control Law, the holding seems applicable to other municipal real estate and land use litigation, including special permits and variances under the Zoning Act, wetlands permits under local wetland bylaws and ordinances, and septic system permits under Title 5, as well as other environmental and land use permits and approvals under other laws, ordinances, bylaws and regulations.