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Michigan Court of Appeals Upholds Zoning Escrow Fee Policy

In Forner v Allendale Charter Township Supervisor, an unpublished decision decided on March 21, 2019 (Case No. 339072, 2019 WL 1302094), the Michigan Court of Appeals upheld the application of Allendale Charter Township’s zoning escrow fee policy pursuant to a zoning board of appeals case.  The township required the plaintiff to pay a $1,500 zoning escrow fee pursuant to an appeal to the township’s zoning board of appeals.  The plaintiff alleged that the township lacked statutory authority to charge the fee.  Both the district court and the circuit court held that the township had the right to charge a zoning escrow fee pursuant to MCL 125.3406(1) because plaintiff’s request related to a legal question regarding land use.  The Court of Appeals determined that MCL 125.3406(1) applies only to zoning permits and does not authorize a zoning escrow fee for appeals to the administrative zoning board of appeals.  However, the Court of Appeals upheld the zoning escrow fee for the appeal to the zoning board of appeals based on the jurisdiction of the township’s zoning board of appeals pursuant to MCL 125.3603 and the Allendale Charter Township Zoning Ordinance, which provides that fees may be charged for an appeal to the zoning board of appeals.  The Court held that township ordinance authority is to be broadly construed.  Furthermore, the township had in place a resolution which both authorized fixed fees and also variable zoning escrow amounts.  The Court noted that the zoning escrow fees in the case were only used to reimburse the township for actual costs incurred for the services necessarily incurred by the township for the zoning board of appeals to carry out its duties.  

Forner v Allendale Charter Township Supervisor is an unpublished decision, and as such, is not binding precedent.  Strangely enough, Forner did not mention an earlier published case by the Michigan Court of Appeals which expressly upheld zoning escrow fees.  In Cornerstone Investments, Inc. v Cannon Township, 239 Mich App 98 (1999), the Court of Appeals held that zoning escrow fees were authorized by MCL 125.295 for a planned unit development so long as the escrow fee is for the purposes of obtaining advance information or toward the cost of zoning enforcement and the fee is reasonable.  MCL 125.295 was the predecessor statute to MCL 125.3406(1) and the wording is virtually identical.  The Court of Appeals decision was the result of a remand of the case by the Michigan Supreme Court.  459 Mich 905 (1998).  See also 231 Mich 1 (1998).


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