Existing Use Rights
The relevance of existing use rights (EURs) has received a high level of attention in Christchurch since the earthquakes. With many existing activities brought to an abrupt end, a common question arising is whether EURs can be relied on to re-establish the activity, particularly in the central city when the planning rules have significantly changed.
It is fair to say that the law around EURs is complex and not easily applied following a large scale natural disaster. This has created several areas of uncertainty and difficult questions for those wishing to re-establish activities.
It is not possible to conclusively answer these questions in a single article, as the answers are highly dependent on the specific facts involved. The purpose of this article it to provide an overview of how EURs operate and identify the various questions and considerations that need to be taken into account when determining the relevance and value of EURs in a particular case.
What are EURs?
EURs are statutory rights provided under the RMA and allow land to be used in a manner that does not comply with the rules in a city or district plan. They are intended to protect established activities from changes to the rules and allow them to continue without the need for resource consent.
Applying this to Christchurch, EURs may allow lawfully established uses to continue regardless of any non-compliance with the Christchurch City Plan, including the changes introduced by the Christchurch Central Recovery Plan (the “Blueprint”). This may include reconstruction of similar buildings where a building has been demolished or the recommencement of a similar activity that has ceased due to the earthquakes.
EURs may also help to establish a ‘baseline’ of what can lawfully occur on the site that makes it easier to get consent for a different activity. In addition, the issue of EURs often arises in relation to insurance disputes and CERA land acquisition negotiations, as the use to which a parcel of land can be put has a direct impact on its value.
What are the requirements to establish EURs?
There are three key requirements for a landowner to prove that EURs exist:
The activity must have been lawfully established as a permitted activity prior to the new rules becoming operative;
The activity must not have been discontinued for longer than 12 months since the new rules became operative; and
The effects of the activity must be the same or similar in character, intensity and scale to the effects of the activity before the new rules became operative.
The onus is on the person who claims that EURs exist to provide evidence demonstrating that these requirements can be met. The required standard or proof is to the balance of probabilities (i.e. it is more likely than not that the requirements can be met).
Of the above three requirements, perhaps the most contentious is the requirement that the activity cannot lapse for more than 12 months. This has proved problematic in the post-earthquake environment, with some activities forced to cease for longer than 12 months due to factors beyond the control of the landowner. The following section examines how this requirement is being interpreted and applied.
The 12 month “discontinuance period”
There are two key questions arising in relation to the 12 month discontinuance period:
When does the discontinuance period start and end?
What needs to be completed within this period to ensure that EURs are retained?
In relation to the question 1 (above), a strict interpretation of the RMA would be that the discontinuance period starts from when the new rules become operative. Applying this to new rules introduced by the Blueprint, this start date would be 30 July 2012, meaning that the activity must be re-established by 30 July 2013.
However, we are aware the Christchurch City Council (“CCC”) has been adopting a more liberal interpretation to date. In summary, CCC considers that that discontinuance period only starts from a point where the activity is voluntarily discontinued by the landowner due to reasons within that person’s control. If the landowner can show that all possible efforts have been made to re-establish the activity, then the activity will not have been discontinued.
This is a much more generous interpretation that takes into account the unique circumstances following the earthquake. However, it is yet to be tested before the Courts and may not survive judicial scrutiny if challenged.
Assuming that the discontinuance period has started to run, question 2 (above) is how much work needs to be completed within the 12 month period to ensure that EURs are retained. This is particularly relevant for lengthy projects, such as the reconstruction of a large building that would now breach the new height limits. How far does this reconstruction need to progress in order for the landowner to be confident that the EURs are no longer at risk of lapsing? Is it commencement of construction, completion of the building, re-occupation, or some other stage?
Unfortunately there is no clear answer to this question and discussions may be required with CCC in relation to a specific project to ensure all parties agree on what is required. In addition, it may be prudent for the landowner to take further steps to try and preserve its EURs, as discussed below.
How can EURs be preserved?
For affected landowners, there are two main options available that may help to preserve EURs and address the risk posed by the 12 month discontinuance period.
The first option is to make an extension application under s10(2) of the RMA to extend the discontinuance period and provide additional time to re-establish the activity. Unfortunately there is again some uncertainty about the date by which such an application must be made. On a strict interpretation, the date for such applications is two years from when the activity was discontinued. In most cases this will be 22 February 2013, which has already passed. However, if the discontinuance is taken to mean voluntary discontinuance (consistent with the Council’s approach), the two year period in which to make an extension application may be yet to commence in many cases.
Assuming that such applications can still be made, there are certain requirements that must be satisfied before an extension will be granted. This includes ensuring that the effects of the extension will not be contrary to the objectives and policies of the district plan and that approval has been provided from every person that may be adversely affected by the extension. Whether these can be satisfied in a particular case will depend on the facts involved.
Another option that may assist in the preservation of EURs is to apply to CCC for an existing use certificate under s139A of the RMA.Such an application must be supported by sufficient evidence to demonstrate that EURs exist for a particular activity.
If an existing use certificate if granted, there are two potential interpretations of its status and effect. The first is that such a certificate is treated in the same manner as an appropriate resource consent and that the discontinuance provisions no longer apply. The alternative interpretation is that a certificate does no more than confirm that EURs existed on the date that the certificate was issued and that EURs can still lapse if the activity is discontinued. Even if this latter interpretation is adopted, existing use certificates remain of some value by confirming the existence of EURs at a particular point in time and providing increased certainty for landowners.
For anyone considering relying on EURs to carry out an activity, an important point to keep in mind is that the Minister for Earthquake Recovery has
the ability to quash existing use rights if they are seen to be impeding the recovery effort. We are not aware of these powers being exercised to date and there would need to be sound reasons for this to occur. However, it remains a risk that affected landowners should be aware of.
Another layer of complication exists for those landowners that are affected by a designation for an anchor project. In this circumstance, even if EURs can be established, the exercise of those rights may be opposed by CERA on the basis that it would prevent or hinder the anchor project.
Finally, EURs are but one solution to carry out an activity that is not anticipated by the City Plan. A simpler and sometimes more attractive option will be to apply for resource consent for the proposed activity. Although the application would be assessed under the usual RMA framework and may have some challenges to overcome, this option avoids many of the uncertainties and complexities associated with the EURs regime.
As is evident from the above, the issue of EURs is far from simple and the relevance and value of these rights will depend on the facts of a particular case. However, there are a range of measures that can be taken to preserve existing use rights, provided they are done within certain timeframes.
The best advice we can give is that anyone seeking to rely on EURs should seek expert advice about their particular situation and the steps they should be taking to ensure that the potential benefits of EURs are secured.
Disclaimer: This is a brief summary for information purposes only and is not legal advice
Posted on Thursday 11th April, 2013 at 09:14 am