According to the Chesterfield Observer, Chesterfield and Hanover Counties intend to ignore the Attorney General’s recent opinion (click here for our previous analysis when the opinion was issued) about the applicability of Code of Virginia Section 15.2-2303.1:1 and will continue to deman cash proferred prior to 15.2-2303.1:1’s July 1, 2010 effective date. The purpose of Section 15.2-2303.1:1 was to postpone the payment of cash proffers for residential developments from issuance of the building permit to issuance of the certificate of occupancy in order to give residential builders and developers some financial relief until 2014.

The AG recently concluded that this new statute applied retroactively to cash proffers agreed to prior to July 1 of this year; however, apparently Chesterfield County and Hanover County don’t agree, and assert that the new statute may not undo prior Chesterfield zoning approvals. So what will these localities do now? That’s simple: nothing. They will continue to demand cash proferred prior to July 1 as if new Section 15.2-2303.1:1 had never been enacted and as if the AG told them they may not do so.

So what does a residential builder or developer do now? As usual, they haven’t got much of a choice: either pay the cash demanded to get their building permits or take on a locality in court and watch as their project grinds to a halt and crashes into the red. Unless someone with deep enough pockets decides to take on one of these localities out of principle, it sounds like the January 2011 legislative session may have to be the necessary fix for this one, particularly if more localities choose to ignore the AG’s recent opinion.