Extension of Government Permits Approved

Due to the crisis in the real estate/finance sector of our state and national economy, real estate developers, including residential developers and commercial developers have experienced an industry-wide decline, including reduced demand, canceled or delayed orders, declining sales and rentals, price reductions, increased inventory, layoffs, and delayed construction plans. Many permits issued during the recession are now near expiration, or they have already expired.

A bill (H.4545) to address the permit extension problem in the construction/development industry was introduced this past session by Rep. Dwight Loftis (Greenville) and Senator Ray Cleary (Myrtle Beach).  The bill passed the General Assembly and was signed by Governor Sanford on May 19, 2010.  The purpose of this bill is to prevent the wholesale abandonment of already-approved projects by tolling the term of these permits for a finite period of time as the economy improves.  The extension of these permits and approvals is necessary to maintain the value of the collateral and the solvency of developers and financial institutions throughout the State.

The bill resurrects development and building permits by state and local government agencies that were valid on January1, 2008, but have since expired.  It allows the resurrected permits to remain valid through December 31, 2012.  For example, if a development permit had expired on December 31, 2009, it is now renewed and valid through December 31, 2012 (3 additional years).

For permits that were still valid on May 19, 2010(bills effective date), the bill provides a “tolling period”, which stops the clock on the permit through December 31, 2012.  For example, a DHEC permit had three months left on it on May 19.  Permit now remains valid through December 31, 2012, plus three months. Permit will now expire March 31, 2013.  The additional time provided by the bill insures that the permit doesn’t expire and that a new permit does not have to be purchased.

Permits included in this “pause” period, include land disturbance, storm water, coastal zone consistency certificates, water/waste water permits, 401 water quality certification, OCRM critical area permits, DHEC air quality, site specific development plans, building permits, etc.

In the case of building permits that have expired for one year or more during the applicable period, the local government must extend the building permit at no additional cost.  However, the construction of the new building must comply with existing rules (building codes) and regulations at the time the building permit is reissued.

Permits excluded from this “pause” period, include a number of federal permits and administrative consent orders. The law allows a government entity to revoke or modify a development approval as permitted by law, and it has no effect on Certificate of Need or Demonstration of Need certificates issued by DHEC.