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Overview of Legal Developments in 2000 Affecting the Real Estate Industry
by Thomas F. Carroll and Steven W. Grieg
In addition to the legal cases discussed at length elsewhere in this edition of the Quarterly, a number of other cases of import to the real estate development industries were issued during 2000. A summary of those cases follows.
Development Applications
In Green Meadows at Montville, L.L.C. v. Montville Township Planning Board, the Appellate Division upheld a developer's right to obtain variances and waivers for an eight lot subdivision, and ordered the subdivision plan approved. The board's denial of a waiver of maximum street length was arbitrary and unreasonable because the suggested improvements and extension would benefit both existing and new homeowners. Further, the board's denial of a waiver from the requirement that each lot contain 5,000 square feet of building area was arbitrary and unreasonable because the affected lots were deeper than required at their centers, allowing for houses comparable to the others in the neighborhood to be built with no detriment to the existing lots.
The Appellate Division, in Davis v. Planning Board of the City of Somers Point, held that a board properly granted final site plan approval even though the applicant made some changes to the preliminarily approved plan. Following preliminary approval, the applicant decreased the size of the building, changed the number of seats in the proposed restaurant and the parking spaces, and reconfigured access to the adjoining road.
Exactions
In Witt v. Borough of Maywood, the Appellate Division ruled that a rezoning ordinance and "exchange of easement" ordinance which allowed a bank to construct and operate a branch on its property in exchange for the improvement and expansion of a municipal parking lot, did not violate the Municipal Land Use Law. The objecting plaintiff attempted to establish that the municipality was motivated to allow improper development in exchange for the municipal parking lot expansion. The ordinances were upheld because the municipality established that the commercial development was located at a heavily traveled portal to the town's central business area, and was not inconsistent with the master plan goals or sound municipal planning. Further, the easement exchange ordinance was not improper because the court found a substantial equivalency between what the municipality received and what the municipality gave away.
Planning Board Jurisdiction
The Law Division held, in Chicalese v. Monroe Township Planning Board, that a party who voluntarily invokes the jurisdiction of a planning board over a development application is estopped from later taking a position that would divest that planning board of jurisdiction. In this case, a developer had asked the planning board to assume jurisdiction over its application to merge seven lots into two lots. After the planning board denied variances for the subdivision, and the merger did not occur, the developer unsuccessfully argued that the merger did not occur because the planning board did not have jurisdiction over the development application and variance issues.
Nonconforming Uses
In Fred McDowell, Inc. v. Board of Adjustment of Wall Township, the owner of two contiguous lots failed to establish that its intention to expand its sand/gravel excavation from one lot to the other was manifested before a new ordinance making mining a nonconforming use became effective. The board of adjustment's prior ruling allowing mining on the first contiguous lot did not entitle the property owner to mine on the second property. The Appellate Division ruled that extraction of a diminishing asset is a distinct category of nonconforming use that may warrant expansion onto a contiguous property, but only as an exception to the general rule against expansion of nonconforming uses. Determinations as to whether expansions of nonconforming uses will be granted are to be weighed on a case-by-case basis.
Notice
A Law Division judge, in Stewart v. The Planning Board of the Township of Manalapan, vacated a planning board's decision to grant an application for preliminary and final site plan approval with variances. The decision was vacated because informal review of the application was conducted at a planning board session without notice to the public. This case is of substantial importance since it casts doubt upon a board's ability to conduct informal reviews of an application of where those reviews are conducted without providing certified mail and publication notices.
In Gallo v. Mayor and Township Council of Lawrence Township, the Appellate Division held that a property owner was not entitled to personal notice of proposed zoning changes which created a higher density near that owner's property. The court reasoned that general classification or boundary changes are exempt from the statutory obligation to provide personal notice. The court found that the extended nature of the master plan review and the general notice given to the public were sufficient to protect the public. Personal notice is reserved only for property owners within 200 feet of a district subject to change, said the court, and is further reserved for discrete and specific changes that do not result from modification of zoning classifications undertaken pursuant to a re-examination of the master plan.
Condemnation
In Greenway Development Co., Inc. v. Borough of Paramus, the Supreme Court held that an inverse condemnation suit could proceed unencumbered by the Tort Claims Act. Therefore, the notice of claim provisions of the Tort Claims Act do not apply to inverse condemnation lawsuits. Fault and lack of reasonable care are not factors in inverse condemnation suits.
The Supreme Court also decided, in Casino Reinvestment Development Authority v. Hauck, that interest on a condemnation award runs from the date of the commencement of the action until the date of payment of compensation, not from the date of valuation.
In Borough of Keyport v. Maropakis, the Appellate Division allowed a property owner to appeal a condemnation commissioners' determination of a condemnation award in the Law Division even though the property owner did not attend the original hearing before the commissioners. Ordinarily, a property owner who does not attend the original condemnation hearing will be precluded from appealing the amount of the condemnation award to the Law Division. The Appellate Division found, however, that no notice was given to the property owner advising him that he would lose his right to appeal to the Law Division if he did not attend the condemnation commissioners' hearing.
The Law Division held, in Commissioner of Transportation v. Trap Rock Industries, Inc., that the Commissioner of Transportation is vested with the statutory authority to condemn private property for environmental purposes even when the environmental need is caused by the construction. The Department of Transportation was allowed to condemn property to create a shallow water habitat within the defendant's property to preserve the habitat along the Delaware River during construction of a limited access roadway.
Adverse Possession
In J&M Land Co. v. First Union National Bank, the Appellate Division affirmed that the plaintiff, who had leased sites for the erection and maintenance of billboards on its property and on an adjacent undeveloped tract owned by the defendant, was subject to the 60 year limitations period for a claim of title by adverse possession. Therefore, the plaintiff, who had posted billboards on the defendant's adjacent lot for approximately 45 years, was not awarded title to the adjacent lot. It is the record owner that may invoke the 60 year limitations period.
Consumer Fraud
In Nobrega v. Edison Glen Associates, the Appellate Division reversed the trial court's dismissal of the plaintiffs' claim of consumer fraud based upon failure of the developer to disclose the known presence of a Superfund site near the plaintiffs' property. Under the Consumer Fraud Act as interpreted by the Appellate Division, failure to disclose such a negative off-site condition may subject sellers of homes to the treble damages, costs and attorney's fees permitted by that Act. The New Jersey Supreme Court held oral argument in this matter in January, and it is hoped that the Court will restore the protections afforded by the Off-Site Disclosure Act by holding that the Consumer Fraud Act does not apply to such claims.
Conclusion
During the past year, the courts have produced a wide variety of legal developments. Please note that these summaries can only generally describe the rulings provided in these cases. Readers are encouraged to seek more detailed information from counsel with regard to these issues and their impact on any particular matter.
Thomas F. Carroll, III, also a partner of Hill Wallack, is a member of the firm's Land Use Division. He also serves on the New Jersey Builders Association Land Use and Planning Committee and its Site Improvement and Infrastructural Standards Committee. A Member of the Board of Directors of the New Jersey State Bar Association's Land Use Section, he concentrates his practice in the development application process and the litigation required in the course of land development.
Steven W. Griegel is an associate of Hill Wallack and a member of the Land Use Division. He also concentrates his practice in land use matters.
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