Property owners should not rely on courts to uphold equitable estoppel claims against local agencies to establish an entitlement to an existing use of property. Under the doctrine of equitable estoppel, a public agency may be barred, or “estopped,” from asserting that an existing use of property is invalid if the property owner justifiably relied on the agency’s representation that the use was consistent with applicable zoning ordinances. In land use cases, courts are required both to find that the requirements of estoppel are met and to balance any adverse effect on public interest against the avoidance of injustice caused by failing to uphold the estoppel claims. Courts usually consider the public’s interest in maintaining the character of an area through established zoning plans and processes to be dispositive. Schafer v. City of Los Angeles, No. B253935 (2nd App. Dist., May 20, 2015).
Over the course of fifty years, Los Angeles and a property owner, Triangle Center, interacted several times regarding two adjacent lots being used as a parking lot. During this period, Los Angeles repeatedly recognized the parking lot as an existing use. No certificate of occupancy was issued at any time, however, and at one point the zoning was amended to remove parking lots as a permitted use. Ultimately, two residents of the nearby neighborhood challenged the use of the lots.
In its decision finding that the parking lot was not a legal nonconforming use, the Los Angeles zoning administrator noted that a certificate of occupancy was required. Triangle appealed this decision to the city’s planning commission, which reversed the zoning administrator’s decision, finding that its prior interactions with Triangle estopped Los Angeles from disallowing continued use of the property as a parking lot.
The two neighbors filed a petition for a writ of mandate challenging the planning commission’s decision. The trial court directed Los Angeles to set aside the planning commission’s decision. On appeal, the court affirmed the trial court’s decision, holding that the circumstances were not sufficiently exceptional to bind the government by equitable estoppel.
When evaluating equitable estoppel claims against a government, courts must balance the interests of the property owner with those of the general public. However, courts are especially wary of granting equitable estoppel against governments. The Schafer court explained that such a grant of equitable estoppel could negatively affect public policy if “estoppel can too easily replace the legally established substantive and procedural requirements for obtaining permits.”
In conducting this balancing test, the Schafer court gave heavy weight to the public’s interest in the “enforcement of the land use laws enacted by its elected representatives” and found that economic hardship alone was insufficient injustice to outweigh the public’s interest. From the perspective of property owners, the lesson stemming from this case is that one is wise to be wary of implied representations made by local agencies about the validity of an existing use. Even reasonable reliance that causes economic injury to the property owner is unlikely to be found to outweigh the public’s interest in enforcement of established zoning and permitting requirements.