Florida Law Speeds Up Building Permits, Secures Rights for Developers

Florida’s new pro-housing development law, Senate Bill 812, accomplishes two things. First, it allows developers to acquire up to 50% of the residential building permits for a residential subdivision or planned community. It does this by requiring certain cities and counties to create an expedited review process for issuing building permits for residential subdivisions or planned communities. Second, it creates a mechanism for developers to have a vested right in an approved preliminary plat.

While the new law is not without some limitations and risks, it should nevertheless be a useful tool for developers to more quickly turn raw land into residential communities.

Expedited Building Permit Approval

By Oct. 1, 2024, local governments required to comply with the new law must create an application for the expedited review. To comply, the said local governments must include a two-step application process for adopting a preliminary plat and a master building permit process. This application must allow the applicant to identify the percentage of homes or the number of building permits to be issued for the planned homes or the residential subdivision. The percentage of homes identified on the application cannot exceed 50% of the residential subdivision or planned community.

The local government must issue the number or percentage of building permits requested so long as all the following conditions are met:

1. The applicant requested no more than 50% of the building permits for the planned homes or the residential subdivision.
2. The local government has approved the preliminary plat for the residential subdivision or planned community.
3. The applicant provides proof to the local government that the applicant provided a copy of the approved preliminary plat and approved plans to the appropriate electric, gas, water, and wastewater utilities.
4. The applicant holds a valid performance bond for up to 130% of the necessary improvements that have not been completed before submission of the application. For statutory master planned communities, a valid performance bond is required on a phase-by-phase basis.

So long as condition (1) is met, the local government’s final approval may not alter or restrict the applicant from receiving the full number of building permits requested.

The 50% threshold is a limit on the applicant, not the local government. While the applicant may not request more than 50% of the building permits to be issued before recording the final plat, the new law does not limit the local government from issuing more than 50% of the building permits for the residential subdivision or planned community.

The new law requires the 50% threshold to be increased by Jan. 1, 2028, to allow an applicant to request up to 75% of the needed building permits for the planned homes or the residential subdivision.

Vested Rights in Preliminary Plats

The new law also provides developers with an avenue to acquire a vested right in an approved preliminary plat. Applicants can obtain a vested right in an approved preliminary plat if they meet both of the following conditions:

1. The applicant relies in good faith on the approved preliminary plat or any amendments thereto.
2. The applicant incurs obligations and expenses, commences construction of the residential subdivision or planned community, and is continuing in good faith with the development of the property.

Once an applicant establishes that it has vested rights in the approved preliminary plat, the local governing body may not make substantive changes to the preliminary plat without the applicant’s written consent.

Limitations and Risks

The new law has some notable limitations. While applicants may contract for the sale of the residences or other buildings in the subdivision or planned community, the applicant may not transfer ownership until after the final plat is recorded. Additionally, the applicant may not obtain temporary or final certificates of occupancy until the final plat is recorded.

The law also limits which local governments must implement the expedited building permit application process. The following local governments do not have to comply with the new law:

1. Counties with fewer than 75,000 residents
2. Municipalities with fewer than 10,000 residents or that have fewer than 25 acres of contiguous land designated as agricultural or to be developed for residential purposes under the municipality’s comprehensive plan
3. Counties listed in section 380.0552, Florida Statutes (i.e., the Florida Keys Area)

The new law also has a notable risk—it requires developers to shield local governments from liability. The developer must indemnify and hold harmless the local government, its governing body, its employees and its agents for liability or damages resulting from the issuance of a building permit or the construction, reconstruction or improvement or repair of a residential building or structure, including associated utilities. The developer must indemnify and hold harmless local government parties from liability or disputes resulting from the issuance of a certificate of occupancy for a residential building or structure that is constructed, reconstructed, improved or repaired before the approval or recordation of the final plat.

This indemnification includes liability resulting from wind, fire, flood, construction defects, bodily injury, and any actions, issues, or disputes arising out of a contract or other agreement between the developer and a utility operating in the residential subdivision or planned community.

Please contact Christopher Berg, Kyle Mosey or any member of Phelps’ Real Estate team with questions or for advice and guidance.