The case represented an important legal victory for K. Hovnanian, which had spent several years obtaining approvals for the proposed Planned Unit Development (PUD). Had the court granted standing to the conservation group, the case would likely have lingered in the judicial system for another two or three years, at a very high cost to the developer.
In reaching its decision, the appeals court determined under what circumstances and in which forum a third party can launch a collateral attack on development agreements that have been executed by developers and municipal governments. The development agreement process is a relatively new land use tool in Maryland, so the court's ruling will have bearing on similar cases in the future.
NAHB filed an amicus brief in the case on behalf of K. Hovnanian, emphasizing the importance of protecting the development agreement process from open-ended legal attacks by third parties after agreements have been executed. This clearly resonated with the court of appeals, and its opinion quoted extensively from NAHB’s brief.
Development agreements, which serve the critical function of vesting developers' property rights, are vital to both the public and private sectors in fostering predictability and certainty in the development approval process.
Allowing these agreements to be attacked at any time by third parties would be extremely damaging to the stability of the process by which land development is approved, financed and delivered.
For more information on the case, e-mail Jon Luther, NAHB staff counsel, or call him at 800-368-5242 x8329.
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