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Building moratorium

What does building moratorium mean? Let Bankrate explain.

What is a building moratorium?

A building moratorium halts the construction of a project or projects. Building moratoriums are imposed by cities, towns and the courts, and for a variety of reasons.

In addition, a moratorium can be short-term or indefinite, depending on the project and the area where it is located.

Deeper definition

Cities or towns can impose a building moratorium when they feel an immediate stoppage in construction is in the best interest of the jurisdiction.

In certain situations, a group of concerned citizens will approach a judge to ask for an immediate stop in construction. The court system may take longer to rule on the subject, and the plaintiff is usually responsible for the court costs.

In many cases, environmental and safety concerns are cited when a moratorium is put into place.

Contractors may learn that an area that has passed building inspections is later found to have an environmental issue like an endangered species that lives in the vicinity, and there may be little that can be done to restart construction.

However, if the moratorium was called because of a safety problem, it could be as simple as a new plan to protect workers or as complicated as a full-scale overhaul of fire prevention systems.

If a temporary moratorium is set, its release could be dependent on a set of terms set by the municipal government or the court. Those terms may include:

  • On-site inspection by a city-approved inspector.
  • Payment to the city or town for expenses of city employees working on the project.
  • Analysis of reports written by other city departments or agencies.
  • Payment of fines.

Building moratorium example

In Oakland Park, Florida, town officials issued a building moratorium this year on construction of small multifamily projects such as villas, townhouses, duplexes and garden apartments in the downtown area.

In the town’s statement, it said that building projects were too small to attract people to the downtown and improve the town’s quality of life. The moratorium was imposed for six months and restricted to just the downtown area.

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