Also known as:vested right theory · vested rights · vested right · doctrine of vested rights
Written by attorneys · grounded in primary & secondary sources — see below
2 senses
1
in property law
A doctrine protecting a landowner's right to continue a nonconforming use of land that was lawful when begun or to complete a development begun in good-faith reliance on a permit or prior zoning. The right arises when the owner has made substantial expenditures or changed position such that revocation would be inequitable. Protection of these pre-existing rights limits a municipality's power to eliminate the use immediately upon rezoning.
Sense 1
1
in property law
A doctrine protecting a landowner's right to continue a nonconforming use of land that was lawful when begun or to complete a development begun in good-faith reliance on a permit or prior zoning. The right arises when the owner has made substantial expenditures or changed position such that revocation would be inequitable. Protection of these pre-existing rights limits a municipality's power to eliminate the use immediately upon rezoning.
Examples2
Nonconforming Mobile Home Park
Viola Volkov has operated a mobile home park for forty years on land later rezoned for luxury condominiums. After the rezoning she obtained a valid building permit and spent over eight hundred thousand dollars installing plumbing risers and framing new units. The city then enacted an amortization ordinance requiring all nonconforming parks to close within ten years. Volkov's long-standing use and substantial expenditures give her a vested right to continue operations and complete the permitted work despite the new zoning.
Sense 2
2
in conflict of laws
A choice-of-law theory holding that rights and obligations vest under the law of the place where the relevant act or event occurred and must be recognized by other jurisdictions. The theory selects the law of a single contact, such as the place of injury in torts, and applies it to the entire case. It has been criticized for ignoring the policy interests of other states that may have stronger connections to the dispute.
Examples4
Out-of-State Auto Accident
Vera Vargas, a New York resident, was injured in an automobile accident while riding as a passenger in a car driven by a New York friend in Ontario. Ontario law would bar her recovery, but New York law would permit it. Under the vested rights theory the law of the place of injury would govern the entire case, yet a court applying modern interest analysis may instead apply New York law because New York has the stronger policy interest in compensating its resident.
A choice-of-law theory holding that rights and obligations vest under the law of the place where the relevant act or event occurred and must be recognized by other jurisdictions. The theory selects the law of a single contact, such as the place of injury in torts, and applies it to the entire case. It has been criticized for ignoring the policy interests of other states that may have stronger connections to the dispute.
Each sense below has its own examples, sources, and questions.
Permit Reliance on Rezoned Land
Violet Vang obtained a building permit under existing zoning and spent substantial sums constructing the foundation and utilities for a commercial building. The city later rezoned the area residential and attempted to revoke the permit. Because Vang acted in good faith on the permit and made concrete expenditures that would be inequitable to nullify, she holds a vested right to finish the project under the prior zoning.
Frequently Asked2
How does a landowner acquire a vested right to finish a project after rezoning?+
A landowner acquires a vested right when, in good-faith reliance on a valid permit or existing zoning, the owner makes substantial expenditures or otherwise changes position such that depriving the right would be inequitable. Some jurisdictions require a permit plus substantial construction. Others apply a balancing test. The doctrine prevents a municipality from applying new zoning to defeat reasonable expectations formed under prior law.
When may a municipality still terminate a nonconforming use despite vested rights?+
A municipality may terminate a nonconforming use through abandonment, discontinuance for the statutory period, or in some jurisdictions through a reasonable amortization ordinance that gives the owner time to phase out the use. The amortization period must be reasonable in light of the nature of the use, the owner's investment, and the time allowed.
Babcock v. Jackson12 N.Y.2d p. 482, 240 N.Y.S.2d p. 750, 191 N.E.2d p. 284
Interspousal Immunity Conflict
Vanessa Vinson was injured in an accident while riding with her husband in Wisconsin. Wisconsin law at the time barred interspousal suits, but the couple later moved to a state that permitted them. The vested rights theory would fix the governing law at the place of the tort, yet a court may instead consider the current domicile's interest in allowing the suit between its residents.
Vaughn Valentine died in an accident in a state whose wrongful death statute limited damages. His family sued in New York, which had no such limit. The vested rights theory would apply the law of the place of death to the entire claim, but a court may reject that mechanical rule when the forum state has a stronger interest in full compensation for its residents.
Loucks v. Standard Oil Co. of New York224 N.Y. 99, 111, 120 N.E. 198 (1918)
Interstate Water Rights Dispute
Valerie Voss held water rights under a compact between two states. When one state sought to apply its own law to alter those rights, the vested rights theory would require recognition of the rights as fixed by the law of the place they first arose. A court may nevertheless examine the equitable apportionment interests of both states rather than mechanically applying the original situs law.
Hinderlider v. La Plata River & Cherry Creek Ditch Co.304 U.S. 92, 110 (1938)
Frequently Asked1
Why have courts largely rejected the vested rights theory in choice of law?+
Courts have rejected the theory because it mechanically selects the law of a single contact, such as the place of injury, without considering the policy interests of other states that may have stronger connections to the parties or the dispute. The approach produces arbitrary results and ignores the practical considerations that should guide choice-of-law decisions.
355 U.S. 220, 223 (1957)Civil Procedure
…given a reasonable time to appear and defend on the merits after being notified of the suit. Under such circumstances it had no vested right not to be sued in California. Cf. Bernheimer v. Converse , 206 U. S. 516; National Surety Co. v. Architectural Decorating Co. , 226 U. S. 276; Funkhouser v. J. B. Preston Co. , 290 U. S.…