The Legal Landscape of Building Permit Fees in Pennsylvania

[jar546]

The issue of municipalities in Pennsylvania increasing fees related to zoning, subdivision, land development, and related ordinances, which includes building permits as a means of generating additional revenue is a complex legal matter. Municipalities do have the authority to adjust fees to cover their actual administrative costs, as outlined in the Municipalities Planning Code, 53 P.S. Section 10101 et seq. However, they must be cautious to ensure these fees remain reasonable and commensurate with the cost of services performed, to avoid being seen as a “back-door tax” and facing legal challenges.

Key legal cases in Pennsylvania provide insights into how courts have dealt with challenges to fees deemed excessive:

1. Skepton v. Borough of Wilson (755 A.2d 1267, aff’d 755 A.2d 1267, Pa. 2000): This case involved a group of contractors challenging building permit fees totaling approximately $110,000 as excessive. The fees were based on each contractor’s bid or contract price. However, the municipality's expenses for overseeing the project were only about $1,234, which was deemed grossly disproportionate to the fees imposed. The trial court ordered a full refund of the fees, and the Commonwealth Court affirmed this order but reversed on the contractors' rights to a refund. The Pennsylvania Supreme Court ultimately held that excessive, illegal permit fees must be refunded, irrespective of whether the taxpayer was able to pass on the costs.
2. Martin Media v. Hempfield Township Zoning Hearing Board (671 A.2d 1211, Pa. Commw. Ct. 1996): In this case, a media company challenged an annual $100 per billboard license fee imposed by Hempfield Township. The Commonwealth Court reversed the trial court's decision upholding the fee, as the township failed to adequately prove the costs associated with regulating billboards, leading to the conclusion that the fee constituted an illegal, revenue-producing tax.

These cases illustrate the potential pitfalls for municipalities in setting fees related to land use and development. Fees based on square footage or construction costs, per temporary structure, annual flat rates, and large nonrefundable fees can be particularly vulnerable to legal challenges if they are not closely aligned with the actual costs incurred by the municipality.

Municipalities should therefore proceed cautiously when adjusting their fee structures, ensuring that they reflect the actual administrative costs associated with processing and regulating projects. Failure to do so could lead to costly litigation and the requirement to refund fees with interest.
For a comprehensive understanding, it's advisable to consult the full text of these cases and relevant legal analyses. Legal professionals or academic resources specializing in municipal law and land use regulations can provide further insights and guidance.

 

[e hilton]

The city/township could probably have gotten away with it if they had not gotten greedy.

 

[steveray]

Martin Media v. Hempfield Township Zoning Hearing Board (671 A.2d 1211, Pa. Commw. Ct. 1996): In this case, a media company challenged an annual $100 per billboard license fee imposed by Hempfield Township. The Commonwealth Court reversed the trial court's decision upholding the fee, as the township failed to adequately prove the costs associated with regulating billboards, leading to the conclusion that the fee constituted an illegal, revenue-producing tax.

Seems like 1 inspection a year could justify that fee....Someone has a horrible attorney...Or great paperwork....

 

[Mr. Inspector]

Then of course for-profit 3rd party inspection companies have no limit on what they charge or what they can donate (kick back) to the municipality.
A good reason for municipalities to go with 3rd party rather than in house.