The Commonwealth Court recently rendered a decision in Lyons Borough v. Township of Maxatawny, 2015 Pa. Commw. LEXIS 310 (Pa. Commw. Ct. 2015), addressing the scope of a municipal governing body’s authority under the Pennsylvania Municipalities Planning Code to impose conditions on a developer’s final land development plan approval. The court’s decision in Lyons is an important development because it significantly restricts the type of conditions a municipality may impose on a final land development approval, finding several conditions routinely imposed by municipalities at that stage to be improper.

In Lyons, Apollo Point L.P. and Saucony Creek L.P. applied to the township of Maxatawny for preliminary land development approval to construct a 192-unit apartment complex on approximately 37.7 acres of land zoned for multi-family housing. The Township Board of Supervisors approved the landowners’ preliminary land development plan subject to 161 conditions relating to, among other things: (1) compliance with the stormwater management requirements under the township’s subdivision and land development ordinance (SALDO); (2) compliance with sanitary sewer and water distribution system requirements under the SALDO; (3) compliance with additional miscellaneous zoning ordinance and SALDO requirements, such as completion of a transportation impact study; and (4) securing necessary permits and approvals from the state and county, including permits and approvals from the county planning commission, the Pennsylvania Department of Environmental Protection, and the Pennsylvania Department of Transportation. Shortly thereafter, the board approved the landowners’ final land development plan, conditioned upon the landowners’ compliance with all of the outstanding conditions cited in the board’s preliminary plan approval.

Concerned with the landowners’ ability to comply with the requirements of the township’s SALDO and zoning ordinance, Lyons Borough, which is located adjacent to the township, and Lyons Borough Municipal Authority, which entered into an agreement with the landowners to accommodate sewage flow from the proposed development, appealed the board’s conditional final plan approval to the trial court. The borough and the borough municipal authority argued that the board erred in approving the final plan because the conditions attached to the landowners’ preliminary plan approval had not yet been satisfied and thus the final plan, as submitted, did not comply with the requirements of the township’s SALDO and zoning ordinance. Finding the borough and the borough municipal authority’s argument unpersuasive, the trial court affirmed the board’s decision, concluding that the board “correctly conditionally approved the final plan.”

The borough and the borough municipal authority appealed to the Commonwealth Court, which reversed. In doing so, the court first acknowledged that a municipal governing body is expressly authorized to condition approval of a final land development plan under Section 503(9) of the Municipalities Planning Code, which provides that:

“Subdivision and land development ordinances may include, but need not be limited to … provisions for the approval of a plat, whether preliminary or final, subject to conditions acceptable to the applicant and a procedure for the applicant’s acceptance or rejection of any conditions which may be imposed, including a provision that approval of a plat shall be rescinded automatically upon the applicant’s failure to accept or reject such conditions within such time limit as may be established by the governing ordinance.”

However, the court concluded that this authority is not without limit.

In examining the scope of a municipality’s authority under Section 503(9), the court distinguished a condition that requires a developer to secure necessary state and county permits and approvals from a condition that requires compliance with one or more provisions of the municipality’s SALDO or zoning ordinance. The court declared that the first type of condition is not, in fact, “a ‘condition’ that a municipality imposes, because [a municipality] has no discretion to change or waive [the state and county] requirements.” In contrast, the second type of condition is an appropriate condition for a municipality to impose, as a municipality has the discretion to change or waive its ordinances’ requirements.”

The court next examined at what stage of the land development approval process—preliminary or final—the imposition of the above-referenced conditions are appropriate. While conditions requiring a developer to secure necessary state and county permits and approvals are implicitly permissible at both the preliminary and final plan approval stages, the court found that a final plan can only be approved once a developer has complied fully with a municipality’s SALDO and zoning ordinance. Thus, conditions related to compliance with municipal ordinances are only appropriate at the preliminary plan approval stage. In reaching this conclusion, the court explained that by approving a final land development plan, a municipality is finding that “the developer has satisfied the [municipality's] laws and there is nothing else for it to do.” This finding then triggers a developer or objector’s right to appeal the municipality’s approval if either believes that the municipality improperly exercised its discretion. If a municipality were permitted to carry over and impose on a final land development plan approval all of the conditions imposed on a preliminary plan approval related to ordinance compliance, a “final plan would not be final until some later date when the municipality determine[d] whether the conditions ha[d] been satisfied or not, which could be well after” a developer or objector’s statutorily prescribed time period to appeal had lapsed.

In conclusion, when approving a land development plan submitted pursuant to a municipality’s SALDO and zoning ordinance, the law gives deference to a municipality’s interpretation of and findings related to compliance with the same. However, as evidenced by Lyons, this discretion is not unfettered. A municipality must be cognizant of the requirements over which it has discretion and control (e.g., compliance with the municipality’s SALDO and zoning ordinance) and focus its attention on ensuring compliance with those requirements prior to granting final plan approval. Otherwise, a municipality’s approval of a final land development plan is vulnerable to attack and reversal on appeal. •