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Follow up on the Town of Lakewood Village vs. Bizios

The March 2015 Enterprising Voices article in the Denton Business Chronicle discussed a recent case styled Town of Lakewood Village v. Bizios, 453 S.W.3d 598 (Tex. App. – Fort Worth 2014), aff’d, 493 S.W.3d 527 (Tex. 2015).  That case was one of first impression and dealt with the issue of whether the Town of Lakewood Village could enforce its building codes and building-permit requirements within its extraterritorial jurisdiction (“ETJ”).  The Fort Worth Court of Appeals determined that the Town could not enforce such codes and permit requirements within the Town’s ETJ since the Town was a general law municipality.  That case was appealed to the Texas Supreme Court which granted the Petition for Review.  The case was argued before the Texas Supreme Court on March 8, 2016, and the court issued its opinion on May 27, 2016.  As promised in the preceding article, the following will provide an update on the Texas Supreme Court’s decision and the final law relating to the whether a general law municipality can enforce its building codes and building-permit requirements on property located solely within its ETJ.

The Texas Supreme Court (the “Court”) affirmed the decision of the Court of Appeals.  In doing so, it further affirmed the position of Mr. Bizios that the state law of Texas does not allow a general law municipality to enforce its building codes and permit requirements over property located within its ETJ.  The Court differentiated between the powers of home-rule municipalities (cities which have a population in excess of 5,000 which choose to be self-governed) and general law municipalities (towns with 5,000 or less of population).  Home-rule municipalities are empowered by the Texas Constitution and are only limited in what they can do by state law.  To the contrary, general law municipalities are political subdivisions of the State of Texas and only hold the powers expressly conferred upon them by state law.

When it comes to building codes and permit requirements, the Court confirmed that any municipality, home-rule or general, has the authority under state law to enforce such codes and permit requirements for property within its municipal limits.  However, with respect to a general law municipality’s ETJ (that area outside of a municipality’s limits which acts as a buffer to other municipality’s annexation powers), only a specific state statute can authorize it to enforce its building codes and permit requirements.  The Town argued that Sections 212.002 and 212.003 of the Texas Local Government Code gave the Town the power to enforce their building codes and permit requirements within its ETJ.  Section 212.002 of the Texas Local Government Code provides that, “the governing body of a municipality may adopt rules governing platting and subdivisions of land within the municipality’s jurisdiction to promote the health, safety, morals, or general welfare of the municipality and the safe, orderly, and healthful development of the municipality.”  Section 212.003 states, “the governing body of a municipality may by ordinance extend to the extraterritorial jurisdiction of the municipality the application of municipal ordinances adopted under Section 212.002.  The Town of Lakewood Village contended that building codes and permit requirements are the same as “rules governing plats and subdivisions”.  However, the Court disagreed that “platting and subdivision” in Section 212.002 includes “building codes and building permits”.

The Town further argued that Sections 214.904 and 233.153 of the Texas Local Government Code supported its position.  Section 214.904 requires municipalities to either grant or deny an application for a building permit within 45 days after submittal.  That Section goes on to provide, “this section applies only to a permit required by a municipality to erect or improve a building or other structure in the municipality or its extraterritorial jurisdiction.”  Section 233.153 allows counties to enforce certain building codes in unincorporated areas, unless a municipality has adopted building codes within that municipality’s ETJ.  In that situation, the municipality’s building codes will supersede the county’s building codes.  Again, the Court disagreed with the Town’s interpretation of Texas law, and instead adopted the Court of Appeal’s rationale that the general reference to “municipalities” in Sections 214.904 and 233.153 does not constitute an independent grant of authority for all municipalities to enforce their building codes within the ETJ, but only applies where any such municipality otherwise has been expressly afforded that power.

The Court went on to strike down the Town’s arguments on implied powers inherent in a municipality’s rights to extend its powers within the ETJ.  The Court forcefully reiterated that there was no express or implied authority in the Local Government Code which allowed the Town to extend its building codes and permit requirements into its ETJ.  The Court declined to follow either the Town’s or Mr. Bizios’ public policy arguments.

In conclusion, the Court made it clear that general-law municipalities do not currently have the authority to enforce building codes or permit requirements within their ETJ.  However, in 2017 the Texas Legislature goes into session.  It remains to be seen whether or not a bill may be introduced to overturn the Court’s decision in the Town of Lakewood Village.

R. Scott Alagood is board certified by the Texas Board of Legal Specialization in Commercial and Residential Real Estate Law and can be reached at alagood@dentonlaw.com and www.dentonlaw.com