Dallas Court of Appeals Holds Municipalities Cannot Enforce Building Codes in Their ETJs

June 4, 2018 | Insights

By Steven W. Dimitt, Michael L. Knapek, William S. Dahlstrom,
L. Suzan Kedron, & Susan Mead

Dallas Court of Appeals finds that a home-rule city lacks authority to require landowners developing property in the city’s extraterritorial jurisdiction (ETJ) to obtain city building permits, inspections and approvals, and pay-related fees.

In 2016, the Texas Supreme Court in the Town of Lakewood Village v. Bizios held that general law municipalities do not have the authority to enforce building codes within their ETJs. After the Texas Supreme Court’s decision, questions remained regarding whether larger, home-rule municipalities could enforce their building codes within their ETJs. On May 10, 2018, the Dallas Court of Appeals in Collin County v. City of McKinney, 05-17-00546-CV, 2018 WL 2147926 (Tex. App.—Dallas May 10, 2018, no pet.) answered that question and held that “the City of McKinney [a home-rule municipality] lacks the authority to enforce its building codes and related inspection requirements within its extraterritorial jurisdiction, but it has the authority to require a landowner to plat its property.”

In this case, Custer Storage Center, LLC owned land located in Collin County and within the City of McKinney’s ETJ. As part of the development, Custer’s property was not subdivided or platted. Custer acquired building permits from the County but did not seek or acquire permits from the City. When the City became aware of Custer’s construction project, it instructed Custer to obtain City building permits. After Custer failed to do so, the City filed a lawsuit seeking declaratory relief and a permanent injunction.

The trial court concluded that the City’s and County’s respective authority to enforce platting and building permit requirements for property in the City’s ETJ was determined based on whether a property is subdivided. The trial court determined that Custer was not required to obtain plat approval or building permits from the City because its property was not subdivided. Moreover, the trial court declared that Custer legally developed its property pursuant to the permits issued by the County and those permits were lawful, valid, and within the statutory authority granted by the County. The trial court’s decision was appealed to the Dallas Court of Appeal.

Enforcing Building Codes in the ETJ

On appeal, the Dallas Court of Appeals determined that the City did not have the ability to enforce its building codes into its ETJ. However, unlike the trial court, the fact that Custer’s property was not subdivided had no bearing on the Court of Appeals’ decision. Rather, the Court of Appeals relied on the Texas Supreme Court’s holding in Bizios in determining that home-rule municipalities cannot impose their building code requirements into their ETJ. Specifically, the Court of Appeals noted that Texas statutes “do not authorize a municipality to enforce its building codes within its ETJ or elsewhere beyond its corporate limits.” Moreover, the Court of Appeals determined that the Texas Supreme Court’s decision in Bizios applies to “every municipality” without distinction. The Court noted that the Texas Supreme Court did not limit its considerations to general law municipalities that were primarily at issue in Bizios. Rather, it used the phrase, “every municipality,” which includes home-rule municipalities like the City of McKinney. As a result, the Court of Appeals held that “every municipality, including a home-rule municipality, requires legislative authorization to enforce building codes beyond its corporate limits.”

Platting in the ETJ

The Court of Appeals also addressed whether the City could require Custer to plat its property, which was located in the City’s ETJ. Focusing on Section 212 of the Texas Local Government Code, which states that the governing body of a municipality may adopt rules governing plats and subdivisions of land within the municipality’s jurisdiction and may extend these rules to its ETJ, the Court of Appeals determined that the “City possesses authority—to the exclusion of the County—to regulate all subdivision plats and related permits for property in the City’s ETJ.”

The Court of Appeals disagreed with the trial court’s decision that the obligation to obtain a plat is contingent upon whether a property is subdivided. The Court of Appeals noted that “neither the City’s ordinances nor chapter 212 of the local government code includes that requirement.” As a result, the Court of Appeals held that the trial court erred in finding that Custer was not required to obtain plat approval from the City.

As a result of this case, both general law and home-rule municipalities will be unable to enforce their building codes into their ETJs without a future express grant of authority from the Texas Legislature or a determination by the Texas Supreme Court that its holding in Bizios does not apply to home-rule municipalities.

The opinions expressed are those of the authors and do not necessarily reflect the views of the firm, its clients, or any of its or their respective affiliates. This article is for informational purposes only and does not constitute legal advice.