234 Cal. App. 4th 1144
Cal. Ct. App.2015Background
- In 2004 the City of Berkeley issued a use permit for a 51-unit rental building at 1080 Delaware; Condition 10 required compliance with Berkeley’s Inclusionary Housing Ordinance (Chapter 23C.12).
- The Inclusionary Ordinance (adopted 1986) required 20% of new units to be rented/sold at below-market rates to lower-income households.
- The Costa‑Hawkins Rental Housing Act (1995) was later interpreted in Palmer to preempt local rent‑control/initial rent regulation measures, and Berkeley concedes its ordinance is unenforceable on that basis.
- The original permittee (Adeli) executed a Regulatory Agreement identifying inclusionary units and later lost title via a deed in lieu; First‑Citizens conveyed the property to 1080 Delaware in 2013.
- 1080 Delaware purchased the property knowing of the permit, refused to comply with Condition 10, and the City sued for declaratory and injunctive relief to enforce the use‑permit condition.
- The trial court granted summary adjudication for the City on the first cause of action, holding the permit condition was not timely challenged by writ and therefore remains enforceable against successors; judgment compelled compliance. 1080 Delaware appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| May the City enforce a use‑permit condition requiring compliance with an ordinance later held preempted by state law? | City: Yes — the City seeks to enforce the permit condition itself, not the ordinance, and the condition was not timely challenged. | 1080 Delaware: No — enforcement would indirectly enforce a preempted ordinance; permit and Regulatory Agreement are void to the extent they implement the ordinance. | The permit condition is enforceable because it was not challenged by administrative mandamus within the statutory period; successors take title subject to it. |
| Can a successor‑owner avoid permit conditions where prior owners accepted them and benefited? | City: No — permit conditions run with the land and bind successors when prior owners waived timely challenge. | 1080 Delaware: Yes — successor (bank/institutional buyer) claims Regulatory Agreement may not bind after deed in lieu and contends limits on enforceability. | Successor is bound: predecessors’ failure to seek writ and acceptance of permit bars later challenge; deed in lieu did not eliminate Condition 10’s enforceability. |
| Does Travis v. County of Santa Cruz allow a late civil action to invalidate a preempted permit condition? | City: Travis supports barring late challenges; permits must be attacked via writ within 90 days or within 3 years for ordinance challenges. | 1080 Delaware: Relied on Travis to argue broader availability of relief. | Court: Travis does not help 1080 Delaware; it confirms late challengers are barred and distinguishes timely petitioners. |
| Is the Regulatory Agreement necessary to enforce Condition 10 if the agreement is void as to successor? | City: No — Condition 10 stands independently; if Regulatory Agreement unenforceable, the owner must itself specify compliance under the permit and ordinance framework. | 1080 Delaware: The Agreement’s language and deed in lieu suggest successors take title free of the Agreement’s burdens. | Court: Regulatory Agreement is subordinate; even if agreement lapses, Condition 10 persists and 1080 Delaware must comply. |
Key Cases Cited
- Palmer/Sixth St. Props. v. City of Los Angeles, 175 Cal.App.4th 1396 (Cal. Ct. App.) (local inclusionary/rent regulation preempted by Costa‑Hawkins)
- Travis v. County of Santa Cruz, 33 Cal.4th 757 (Cal.) (timely administrative mandamus required to challenge permit conditions; late challenges barred)
- City of Santee v. Superior Court, 228 Cal.App.3d 713 (Cal. Ct. App.) (administrative mandamus is exclusive remedy to attack permit conditions when not timely pursued)
- Pfeiffer v. City of La Mesa, 69 Cal.App.3d 74 (Cal. Ct. App.) (acceptance of a permit with conditions waives later challenge to those conditions)
- Anza Parking Corp. v. City of Burlingame, 195 Cal.App.3d 855 (Cal. Ct. App.) (conditional use permits run with the land and bind successors)
- Ojavan Investors, Inc. v. California Coastal Com., 26 Cal.App.4th 516 (Cal. Ct. App.) (acquiescence to permit conditions bars later challenge; successors take title subject to prior restrictions)
- Palazzolo v. Rhode Island, 533 U.S. 606 (U.S. Sup. Ct.) (ripeness and timing of takings claims; distinguishes when transfer should not preclude a fresh claim)
- Bright Dev. v. City of Tracy, 20 Cal.App.4th 783 (Cal. Ct. App.) (vesting map/policy enforcement depends on rules in effect when application is deemed complete)