Just When You Thought You Weathered The Storm, Another Agency May Rain on Your Parade

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It is no secret that development projects throughout the state have been stalled for several years. The unprecedented global credit crisis dried up financing for development projects, and prevented even motivated owners and developers from pursuing necessary local, state, and federal project entitlements. While the state Legislature appears to have been receptive to the real estate industry’s request to extend the life of certain pending entitlements, the state’s administrative agencies have continued to pursue and adopt layers of new regulation that may adversely affect precisely those entitlements the Legislature agreed to extend.

In California, most development projects include a proposal to subdivide land for purposes of sale, lease, or financing. All residential projects – both single-family, and multifamily – necessarily require compliance with the Subdivision Map Act (Gov. Code, §§ 66000 et seq.) before a residential unit may be sold.

For any proposal over a handful of units, the Subdivision Map Act prescribes a two-step process. A developer must first prepare and obtain conditional approval of a tentative subdivision map. Before the first unit may be sold, the developer must comply with the conditions of approval of the tentative map, often at great expense. For a large-scale project, it is not unusual for a map to include hundreds of required conditions. Once the conditions of approval have been satisfied, a final map may be recorded, making the lots available for sale, lease, or financing. If a final map is not recorded within the “life” of the tentative map, the tentative map expires, and a developer must restart the subdivision process anew.

For obvious economic reasons, over the past couple of years many developers have been unable to timely make the transition from tentative map to final map because of the substantial expense involved, and because the market for new units is significantly depressed. In response to a large number of languishing tentative maps, in 2009 the Legislature amended section 65961 of the Government Code, and added a new section 66452.22 to the Government Code to extend the life of certain tentative, vesting tentative, and parcel maps by 24 months. This extension followed on the heels of a similar statutory map extension in 2008.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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