SJC Applies Zoning Act's Bond Provisions to Chapter 40B Comprehensive Permits, Limits Recoverable Costs from Bonds

The provisions of Massachusetts General Laws chapter 40A (Massachusetts Zoning Act), which allow courts to require a bond be posted by plaintiffs who challenge local zoning relief, are also available against plaintiffs who challenge comprehensive permits under chapter 40B. That’s the main takeaway of the Supreme Judicial Court’s December 14, 2022 decision in the case Marengi v. 6 Forest Road LLC. The Marengi decision, however, has broader impacts on chapter 40A’s useful bond provisions. It will affect how bond requests are reviewed in cases challenging both ordinary zoning relief under 40A and comprehensive permits under chapter 40B, and limits the types of costs recoverable from a bond.

In Marengi, the developer 6 Forest Road LLC applied to the Salisbury Zoning Board of Appeals for a comprehensive permit under chapter 40B, a set of laws enacted to streamline local zoning review and permitting for certain affordable housing projects. The developer’s proposal was originally for 76 units and included site plans, which were revised throughout the permitting process. The final site plan featured 56 units, 14 of them affordable. The Zoning Board granted the developer a comprehensive permit, which was appealed to the Superior Court by a group of abutters and non-abutters who claimed to be harmed by the comprehensive permit.

In the Superior Court, the developer filed a motion for a bond to secure costs resulting from the appeal, including increases in labor and supply costs, attorney’s fees, expert witness fees, and rising interest rates to finance the project. The Superior Court ordered a bond in the amount of $35,000, which was appealed. The plaintiff’s appeal, in part, challenged the applicability of chapter 40A’s bond provisions to chapter 40B’s comprehensive permit scheme for affordable housing.

Chapter 40A, section 17’s bond provisions state, in part,

"The court, in its discretion, may require a plaintiff in an action under this section appealing a decision to approve a special permit, variance, or site plan to post a surety or cash bond in an amount of not more than $50,000 to secure the payment of costs if the court finds that the harm to the defendant or to the public interest resulting from delays caused by the appeal outweighs the financial burden of the surety or cash bond on the plaintiffs."

In Marengi, the Supreme Judicial Court decides that the bond provisions in chapter 40A, section 17, are available to project proponents whose comprehensive permits under chapter 40B have been appealed. In reaching its decision, the SJC relies on the statutory text of chapter 40B, section 21, which says that any “person aggrieved by the issuance of a comprehensive permit or approval may appeal to the court as provided in section seventeen of chapter forty A.” The SJC also relies on the fact that comprehensive permits include site plans, which are explicitly referenced in chapter 40A, section 17.

While this aspect of Marengi is a welcome outcome for the development community, other aspects of Marengi may impact legal strategy in all zoning appeals, including those under chapter 40A. First, the Marengi decision clarified the “costs” that could be secured by a bond under chapter 40A. The SJC limits the recoverable costs to actual and reasonable costs incurred by having to defend a zoning appeal, but those costs do not include attorney’s fees, carrying costs, or delay damages, such as increases in the cost of construction materials and labor. Costs do include, however, any fees incurred to retain expert witnesses or pay traffic, engineering, environmental or other consultants during litigation.

Second, the SJC instructs that courts must make preliminary determinations that a plaintiff’s zoning appeal appears to lack merit before the court may require a bond. In reaching its decision, the SJC looked to chapter 40A, section 17, which disallows costs in a zoning appeal “unless it shall appear to the court that said appellant or appellants acted in bad faith or with malice in making the appeal to the court.” Because costs cannot be awarded unless a zoning appeal is brought in bad faith or with malice, the SJC decided that courts should not require bonds unless an appeal appears to be so devoid of merit and, as such, the court may reasonably infer bad faith.

You can read the SJC’s decision in Marengi v. 6 Forest Road LLC here. If you have any questions about Marengi or any other zoning issues, please feel free to contact Attorney Sammy Nabulsi at ssn@rose-law.net. Learn more about Rose Law Partners LLP’s land-use practice here.