SW Legal studies in Business

Building Permit May Not Result in Right to Occupy Completed Structure
Description

Iowa high court held that despite a developer obtaining a building permit, the city had the right to prohibit occupancy of the structure when completed because it was later determined that the permit should not have been granted.

Topic Real and Personal Property
Key Words

Building Code; Certificate of Occupancy; Vested Right

C A S E   S U M M A R Y
Facts

Chamberlain, a real estate developer, planned to build a mixed-use complex near the Iowa State University campus. The bottom floor would be for retail space. Apartments above the retail space would have a loft area above the main living area that could be used for sleeping or storage. Accessible by a ladder, the loft areas were 184 square feet and had 4 foot ceilings. Chamberlain met with City of Ames building code officials about the design to be sure it was acceptable. The fire inspector demanded that sprinklers be installed in the loft areas and Chamberlain agreed. The building code officials then granted the building permit. Chamberlain built the building and lined up tenants. At final inspection, the fire chief said the design was not acceptable and refused to allow occupancy, contending that the ceiling in the lofts were too low to be safe. The city would approve occupancy only after the loft areas were sealed off. Chamberlain sued, contending that it relied on a valid interpretation of the building code, and it had a vested right that had been taken. The trial court held for the city. The appeals court affirmed. Chamberlain appealed.

Decision

Affirmed. The developer did not acquire a vested right to an occupancy certificate based on the building official’s interpretation of the building code at the time the construction permit was granted. The building permit was not valid since it was later determined that the building did not comply with code requirements. A permit can be revoked notwithstanding the permit holder’s reliance on the permit.

Citation

Chamberlain, LLC v. City of Ames, 757 N.W.2d 644 (Sup. Ct., Iowa, 2008)

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