January 1, 1900

Henry T. Chou

Builders in New Jersey have always had to deal with arguably the most burdensome municipal land development ordinances in the nation, but a measure of comfort was previously found in the fact that those ordinances had to be specifically authorized by, and be consistent with, the Municipal Land Use Law (MLUL). Over the past year, however, the New Jersey Supreme Court has issued several decisions that allow municipalities and land use boards to extend their powers beyond those provided for in the MLUL.

It has done this by holding that the MLUL "impliedly" authorizes these extended powers. The practical effect of those court decisions is that trial courts have permitted municipalities to impose numerous additional limitations on the rights of developers even though the MLUL does not specifically authorize them to do so. This disturbing trend in the New Jersey courts is a departure from previous case law, which generally required land use ordinances to be expressly authorized by the MLUL. The following cases illustrate some of the "novel" ordinances that have been upheld by the courts.

The Rumson Case and House Size Limitations

The case that started the trend was Rumson Estates, Inc. v. Borough of Fair Haven, where our Supreme Court dealt with the issue of Fair Haven's attempt to deviate from the MLUL's definition of "floor area ratio." The MLUL's definition of floor area ratio allows municipalities to limit the area of developable land to a certain percentage of the total area of the tract. For instance, Fair Haven validly adopted an ordinance that permits 40% of the total area of a tract to be developed. However, on top of the floor area ratio requirement, Fair Haven imposed a square footage cap of 2,200 feet. In other words, the 40% floor area ratio applied, but in no case was the total square footage to exceed 2,200 square feet. For practical purposes, this square footage cap allowed Fair Haven to limit development of any lot to a square footage of 2,200 feet, regardless of how big the lot was. For larger lots, this cap requirement made the floor area ratio meaningless and irrelevant. Although the square footage cap was not authorized by any provision of the MLUL, the Supreme Court decided to allow it, finding that municipalities were free to devise different, additional means of regulating intensity of land use. Municipalities throughout the state have taken note of this holding and have adopted ordinances similar to Fair Haven's.

Strict Time Limit on Approvals Upheld

The Supreme Court also decided D.L. Real Estate v. Point Pleasant Beach Planning Board, a case involving a zoning ordinance that required applicants to seek final site plan or subdivision approval within three years of receiving preliminary approval and any related extensions. The property owner argued that the municipality had no power to adopt such an ordinance because such strict limitations on the lifespan of preliminary approvals were not specifically authorized by the MLUL. Previously, it had been thought that the MLUL three-year provision for preliminary approvals meant that the approvals were vested against a zoning change for three years, but that the approvals were valid indefinitely if there was no such zoning change.

The Supreme Court rejected this argument, finding that the power to regulate land use is to be "liberally construed" in a municipality's favor, and that the ordinance fell within the "implied powers" of a municipality. The Court reasoned that because the MLUL did not specifically provide for indefinite life of preliminary approvals, municipalities were free to set time limits on viability of approvals, as long as the time restrictions did not contradict other parts of the MLUL.

The principal effect of this decision is that municipalities may now force builders to go through the local development approval process a second time after a certain period of time has passed. In light of the constant political changes and shifting of policies in municipalities, going through the costly local development process a second time will be an uncertain, unnecessary and costly experience for builders. Builders would be well advised to apply for final approvals well before the three year period, or other period established by ordinance, has lapsed.

Developers to Pay Costs of Local Public Advocate?

Recently, trial courts have relied on the Supreme Court's decisions to expand municipal land use powers in other ãcreativeä ways. In Cerebral Palsy Therapy Center v. Borough of Fair Lawn, a children's rehabilitation center applied to the Fair Lawn Zoning Board of Adjustment for a use variance to expand its existing facilities. The Borough of Fair Lawn adopted an ordinance that required the children's rehabilitation center to pay for the costs and expenses of a lawyer-the Fair Lawn "public advocate"-to represent the interests of objectors to the variance application. The ordinance also required the children's rehabilitation center to pay for all experts hired by the local public advocate. Relying on the Supreme Court's decision in D.L. Real Estate, the trial court upheld Fair Lawn's ordinance. The court found that the ordinance was "impliedly" valid because there was nothing in the MLUL that specifically prohibited municipalities from requiring applicants to fund public advocates involved in the applicant's land use application process.

Thus, the trial court approved an ordinance that required the children's rehabilitation center to fund the objectors to its own application. The trial court's decision is currently on appeal in the Appellate Division, with the appeal contesting the proposition that municipalities have "implied" authority under the MLUL to shift a public advocate's fees to an applicant. The outcome of this appeal has important implications for developers in New Jersey.

Conclusion

The cases cited above signal a dramatic shift in the courts' interpretation of the MLUL. Previously, the courts would look to the MLUL to see if a municipal requirement was specifically authorized by the MLUL. If the requirement was not specifically authorized by the MLUL, it would be struck down. Now, the courts are drifting toward an approach whereby municipal land use ordinances will be upheld unless they contradict, or are expressly prohibited by, language in the MLUL. If the ordinance requirement is not inconsistent with the MLUL, the courts are tending to permit it as an exercise of "implied" power under the MLUL. For practical purposes, this means that municipalities are now free to impose a myriad of imaginative restrictions and requirements not contemplated by the MLUL.

Municipalities throughout the state are taking advantage of this liberal climate to adopt ordinances that are hostile to builders. For example, many municipalities have adopted "aesthetics" ordinances that require buildings to conform to certain architectural styles. Municipalities have also adopted ordinances that allow their land use boards to arbitrarily deny development applications on vague, subjective grounds not found in the MLUL. Hill Wallack is closely monitoring the wide range of ordinances being adopted throughout the state and is involved in challenges to a number of them. It is imperative to devise innovative strategies to reverse, or at least minimize, the "anything goes" trend creeping through our courts.

Henry T. Chou is an associate of the firm and member of the Land Use Division. He concentrates their practice in diverse land use matters.