HBA Wins Court Fight Against Building Permit Fees with Help from NAHB Fund

Filed in Legal by on September 16, 2019 8 Comments

After nearly a decade of litigation and two trips to the state Supreme Court, the Home Builders Association of Michigan secured a resounding victory for the home building industry.

In 2010, the HBA of Michigan challenged certain building permit fees as unlawful under Michigan’s Construction Code Act. The act requires such fees to be reasonable and prohibits them from exceeding the cost of running the building department. But when the building department privatized, excess permit fees began going to the city’s general fund.

The HBA first had to litigate a procedural issue all the way to the Supreme Court, which found in its favor, and then it was able to litigate the substance of the case. Both times, the HBA of Michigan lost in the lower courts, but the association never gave up. Nor did NAHB, which through its Legal Action Fund awarded $50,000 in assistance throughout the litigation.

On July 11, 2019, the Michigan Supreme Court unanimously ruled in the HBA of Michigan’s favor, remanding the case to the lower courts for further deliberation on the budget of the building department and other issues, but still handing a clear victory to the home builders.

“Our case reached the Michigan Supreme Court not once but twice with the court issuing a unanimous opinion in our favor each time,” said Lee Schwartz, Executive Vice President for Government Relations, HBA of Michigan. “NAHB’s Office of Legal Affairs and the NAHB Legal Action Committee were with us every step of the way. Their generous financial assistance helped us to carry this case to a very successful conclusion.”

NAHB’s Legal Action Fund will continue to be there for members if needed. Applications are due Sept. 20 for the next round of legal grants to be decided at the upcoming meeting.

Guidelines and application information is available at nahb.org/legalfund. For questions in reference to your application, contact Lavon Roxbury at 202-266-8359.

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  1. David C says:

    In light of the Michigan Supreme Court twice unanimously ruling in favor of the HBA of Michigan, I find it deeply disturbing that the lower courts ruled against the association.

  2. Jim Haake says:

    I always find it interesting that Home Builders will fight the hardest and complain the most over money going to the municipality and community protecting the health and life safety of citizens, yet pay the crazy overcharged amounts without question for the latest design trends.

    • Emerson J Clauss III says:

      If a Building Department is set as an “Enterprise Fund” organization, the fees should be what is costs to run that business, not an unfair TAX used to line General Fund coffers. This is a battle I fought in FL for years, fending off greedy politicians looking for way to levy TAXES with seeming to do so. It is an important distinction.

    • Ash D. says:

      Actually, it’s home buyers who are demanding these design trends, home builders are just responding to the demands. Most builders would be perfectly happy building simple homes, it’s consumers who want the smart home controlled at their finger tips, houses that with the slide of a door, open the living space to the outside, etc.

      The want list of a home buyer has ballooned over the years, regardless of their purse size. Surveys show first time home buyers want list is similar to move up buyers, and they are not willing to compromise on this want list even though it’s not in their budget to begin with.

      It’s very easy to blame the builder, but lets not forget, the consumer is the last stop on the road, and has the ultimate authority through purchases on what designs become “trends”.

  3. Kevin O says:

    I am interested to see how this plays out locally. Two years ago we built 2 identical houses less than 5 miles apart, but in two different townships. The first building permit was around $750. The second one was $2800. The subcontractors permits were significantly higher in the 2nd township as well.

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