Porzio Real Property

The Devil is in the Details: Appellate Division Rules of the Sufficiency of Public Notices

by:  Gregory S. Ricciardi

   The Appellate Division on November 14, 2011 decided the case of  Rockaway Shoprite Associates, Inc. v. City of Linden.  This case deals  with the adequacy of public notices in the context of the adoption of an ordinance and an amendatory ordinance for the rezoning of a large parcel of property in Linden, New Jersey.  The property was a 105 acre, former General Motors assembly plant, of which 47.5 acres was proposed for redevelopment by the Defendant (and the City of Linden).  The proposed ordinance would substantially change the zoning to allow for a “planned commercial district” with a mix of commercial and retail uses.  The proposed ordinance and amendment to the ordinance were properly published and sent to adjacent landowners. 

However, problems with the notices in this case deal with deficiencies  in the actual substance of the notice.  The notices only advised the public that the zoning was being amended as to properties identified by common name and lot and block number.  Pursuant to N.J.S.A. 40:49-2.1, the notice must give “a brief summary of the main objectives or provisions of the ordinance…” While a summary may be substituted for the publication of the full text  of the ordinance, where the proposed ordinance exceeds six pages, the summary must “sufficiently alert the reader to the nature and importance of the proposed changes to the zone.”  The Court held that a notice must inform the reader that the ordinance would result in substantive changes to the municipality’s zoning and identify and briefly describe the new zones and uses. 

It is important to note that the Court did not limit its holding to the municipality’s legislative power to enact ordinances.  The Court held that “we discern no meaningful difference between the municipality’s exercise of its quasi-judicial power over proposed development applications and its legislative power to enact zoning.. .” Therefore, notices published pursuant to N.J.S.A. 40:55D-11, should also include sufficient detail of “what is projected to inform the interested public whether to participate or object in public hearings.”  Namely, the Court is looking for an accurate description of what the property will be used for under the application.

Finally, the Court weighed in on whether a Plaintiff’s representation and appearance at the public hearing approving the ordinance resulted in a “waiver” of Plaintiff’s right to challenge the ordinance on the basis of deficiencies in the notice.  The Appellate Division held that the Plaintiff’s appearance did not waive the right to challenge the validity of the notice because strict compliance with statutory notice is mandatory and jurisdictional.  Accordingly, non-conformity renders the governing body’s resultant action null. 

Eliminating the Hidden Charges of Development: The Appellate Division Holds that Subdivision Developer Cannot Be Required to Pay Detention Basin Maintenance Contribution

by:  Katharine A. Muscalino

Even after the land use approval has been won, developers still face a myriad of fees and escrow payments to get their job done. A developer challenged these fees in Majestic Contracting, LLC v. Nunziato and the Township of Howell (App. Div. November 18, 2011) and persuaded the Appellate Division that municipalities may not impose maintenance fees in excess of those permitted by statute.

Majestic Contracting, LLC, obtained subdivision approval for the creation of nine lots, one of which would be dedicated to the Township of Howell for the creation of a detention basin. The Township Engineer refused to sign the subdivision plat until the developer executed a developer's agreement, drainage-maintenance escrow agreement, and obtained approval of its tree removal and replacement plan. The resolution of subdivision approval was conditioned on Majestic's compliance with 1) all recommendations of the Board Consultants' reports, 2) all recommendations from the Township's certified tree expert, and 3) all other applicable rules, regulations, ordinances, and statutes. Majestic sued, arguing that its subdivision approval was not conditioned on the execution of a developer's agreement or a drainage-maintenance escrow agreement, the Board lacked the authority to delegate technical matters to Township officials, and that the local ordinances relied upon by the Township Engineer to require these agreements, as well as the ordinance requiring approval of the Township's tree expert, were ultra vires and illegal.

 

New Jersey Supreme Court Considers Condominium Association's Ban On Window Signs

 by:  Katharine A. Muscalino

On September 1, 2010, a three-judge panel of the New Jersey Appellate Division struck down, as an unconstitutional limitation on free speech, a condominium association’s governing documents’ prohibition on posting signs in unit windows, with the exception of a single “For Sale” sign.  On October 24, 2011, the New Jersey Supreme Court heard argument on these issues, and is expected to issue an opinion either upholding the Appellate Division’s rejection of such restrictions or overturning the Appellate Division and finding that such signs may be banned.  Because many Associations’ governing documents include bans like the one at issue in Mazdabrook, the New Jersey Supreme Court’s opinion could have a wide-ranging impact, and should likely inspire condo associations to review their by-laws so as not to run afoul of its holding.

 

All Hope Abandoned Ye Who Enter Here (But Make Sure You Take Some Candy On Your Way Out)

by:  Gregory S. Ricciardi

Some people look forward to the winter holiday season all year (especially retailers), but my my favorite holiday is Halloween. Fall is in full swing with crisp air and colorful, crunchy leaves under foot.  It is the one day of the year when goblins, ghouls and creatures of all ages can roam the streets in search of candy or mischief.  It is also the time for a Halloween tradition that is near and dear to this Porzio Real Property Blogger’s “tell-tale” heart.  The Haunted House. 

As a child growing up on Long Island, I had driven past the “Amityville Horror House” more times than I can count. The house has since been substantially renovated, but that did not stop the press  from covering  its recent sale in the summer of 2010. 

Attorney’s who have taken a property law course in the last twenty years may remember the famous case of Stambovsky v. Ackley in New York.  In this case,  the plaintiff contracted to purchase a house from the defendant.  After the sale was complete, the plaintiff learned the house had a reputation as being haunted.  Once the plaintiff learned that the house was haunted, they sought the equitable remedy of rescission of the sale contract.   The Appellate Division in New York held:

From the perspective of a person in the position of plaintiff herein, a very practical problem arises with respect to the discovery of a paranormal phenomenon: “Who you gonna’ call” as a title song to the movie “Ghostbusters” asks.  Applying the strict rule of caveat emptor to a contract involving a house possessed by a poltergeist conjures up visions of a psychic or medium routinely accompanying the structural engineer and Terminix man on an inspection of every home subject to a contract of sale.  It portends that the prudent attorney will establish an escrow account, less the subject of the transaction come back to haunt him and his client…In the interest of avoiding such untenable consequences  the notion that a haunting is a condition which can and should be ascertained upon reasonable inspection of the premises is a hobgoblin which should be exorcised from the body of legal precedent and laid quietly to rest.  169 A.D. 2d 254, 257 (N.Y. App. Div. 1991). 

The New York Times also featured a story recently ("The Real Scare Is Not Being Scary") on the escalating “fright factor” needed to pull off a successful haunted house these days.  The article profiles the minds behind Universal Studios Theme Park’s Halloween Horror Nights. Other theme parks feature similar Haunted House experiences such as Six Flags Fright Fest in New Jersey. 

For those looking for a good scare in New Jersey or other parts of the country, the following website provides a guide to area haunted houses: http://www.hauntedhouse.com/ 

Reducing the Cost of Going Where No Man Has Gone Before

by:  Katharine A. Muscalino

Under existing Board of Public Utilities Rules, developers seeking to build in undeveloped areas have been forced to bear the full cost of utility extension, while developers building in more developed, metropolitan areas, have enjoyed the benefit of sharing the expense of utility extension with existing ratepayers in the area.  The rule was designed to encourage smart growth and reduce sprawl.  The result was that developers in rural and less developed areas of New Jersey were facing massive, if not prohibitive, infrastructure expenses.

After getting an $8 million bill for utility extension for a 555 home development in Howell, one developer sued the BPU, challenging its authority to adopt such a rule, codifying disparate treatment of developers based on the existing development and infrastructure in a given area.  The Appellate Division ultimately ruled that such a rule, treating development in some areas of the state differently than others at the developer’s expense, is beyond the state agency’s statutory authority.

In response to the Appellate Division’s opinion, the BPU has introduced a new rule, still in draft, that would allow developers to share the cost of utility extension over the entire ratepayer base.  The new rule will make large-scale development in rural areas possible, and offers the possibility of utility service to both new and existing homeowners and businesses in these areas.  The details of the new rule’s implementation will be discussed at the BPU’s meeting on Tuesday, October 18, 2011, including what portion of the extension costs should continue to borne by the developer and whether the developer should pay a deposit for the extension.  Developers with plan to build in areas that are not served by existing infrastructure, or in rural areas may want to consider attending the meeting or contacting a BPU stakeholder to express support for the proposed rule.  The meeting is expected to draw critics of the proposed rule who argue that it will lead to sprawl, compromise smart growth, and endanger scarce resources.  To review a copy of the draft rule, click here.

Steve Jobs, Apple, and Land Use

by:  Peter J. Gallagher

Although I am a week late to be eulogizing Steve Jobs, it seemed worthwhile to post about his last pulic appearance, which came in front of his local Cupertino City Council to testify in support of Apple's new planned headquarters.  The Atlantic first posted the story ("Steve Jobs as Land Use Advocate"), including a link to a video of Jobs's testimony, which is, as you might expect, compelling (h/t PropertyProfBlog.)  A few things jumped out at me while watching the testimony:

• The round of applause he received when he was introduced (I would venture to say this is rare at zoning board hearings).
• The black turtle neck that was apparently not just reserved for launching new products.
• The genius who brought us Macs and I-Pads hoping that his computer/projection equipment will work when he starts the presentation (wonder if it was PowerPoint).
• The man in the background taking a picture of Jobs during the presentation (again, surely a rarity for these types of hearings).

Although like all other things Apple, the new headquarters seem new and cool, not everyone likes the building that Jobs was promoting during his appearnce before the City Council.  The New Yorker recently criticized the structure in an article entitled, "Apple's New Headquarters," noting in a particularly stinging final sentence, which was written prior to his passing: "It’s said that Steve Jobs considers this building to be a key part of his legacy, which would be unfortunate, because it would mean that his last contribution to his company might well be his least meaningful."

A Look At What The Occupy Wall Street Protesters Are Really Occupying

by: Peter J. Gallagher

The Wall Street Joural Law Blog had an interesting article -- "Private Owners Of Public Spaces In 'Occupy Wall Street's' Wake" -- on the property that the so-called 99%ers are actually occupying in the Wall Street area. Parks like Zucotti Park are known as "privately owned public spaces" or POPS, which are "part of New York’s incentive zoning program, under which buildings are granted additional floor area or related waivers in exchange for providing these spaces."  (Zucotti Park, formerly known as Liberty Plaza Park, is actually named for the chairman of the entity that now owns the park.)  The owners of Zucotti Park claim that they have not been able to clean the park since the day before the protests began.  This has led some to call for the Department of City Planning to create new rules for POPS that would allow the private owners to close the parks at a set time, which Stephen Spinola, head of the Real Estate Board of New York, claims would “add to security and allow maintenance.”  As a practical matter, the article notes, this might be difficult because each of the 516 POPS in New York City has its own contract with the City and its own rules.  Moreover, changing the rules governing the City’s POPS to allow the private owners to control access, even for seemingly benign purposes, would surely spark protests of its own.

Renting Our Way To A Housing Recovery?

by:  Peter J. Gallagher

News about a housing recovery usually focuses on home sales, but Bloomberg ran a story this week, "U.S. Can Rent Its Way To A Housing Recovery" (h/t/ Land Use Prof Blog) that suggests that this focus may be off.   The author suggests that the Obama Administration should allow a tax write-off for investors who buy empty properties and rent them out.  The author claims this would help with two of the biggest problems with the housing market – the large amount of owner-occupied houses on the markets, which pushes prices down, and the millions of homes with negative equity: “Dealing with excess inventory by shifting vacant properties into the rental market would help to stabilize prices and thereby mitigate, to some degree, the negative-equity issue -- although additional action would also be warranted to attack such ‘underwater’ situations."  The ideas expressed in the article are obviously not without controversy, however, as even a cursory glance at the comments posted about the article make clear. 

Tate George Goes From Beating Clemson To Trying To Beat The Rap

by:  Peter J. Gallagher

If you are a fan of college basketball, then you undoubtedly remember Tate George for his 1990 buzzer beater against Clemson.  Along with a handful of other shots -- Christian Laettner against Kentucky and Bryce Drew against Ole Miss come to mind -- this was one of the best non-finals buzzer beaters in the history of the NCAA tournament: 

  

Well, it  now appears that George will have a long time to reflect on this shot as he has been arrested and charged with running a Ponzi scheme.  According to the Star Ledger ("Feds Arrest Former N.J. Nets Player Tate George On Charges He Ran A Ponzi Scheme"), George turned himself after the following allegations were unsealed:

According to a complaint unsealed this morning, George, 43, of Newark, held himself out as the CEO of The George Group, which he claimed managed more than $500 million in assets, and represented to would-be investors, who included former professional athletes, that he would use their funds to buy and develop real estate projects in New Jersey and elsewhere. Between 2005 and March 2011, investors gave George roughly $2 million, according to the complaint. But instead of using the money to fund the promised projects, George used new money to pay existing investors and for his own personal use, authorities said. In reality, The George Group had virtually no income generating operations, authorities said.

Updates to follow as the case unfolds. 

You Think Your Neighbors Are Bad . . .

by:  Peter J. Gallagher

Anyone who thinks they have bad neighbors better pay attention to this story.  A man with the too-good-to-be-true name of Titus Terranova put up a sign warning potential purchasers of his neighbor's house about what they were in for if they moved in next door.  According to the story by the local Colorado TV station, "Neighbor's Warning Sign Scares Off Home Buyers" (h/t: Marketplace),  the sign, which is hand painted on the side of Titus Terranova's RV reads: "Warning: 3 Rottweilers, Loud Parties, Loud Music, Loud Cars, Anti-Horse, Fireworks."  Naturally the current owners of the home objected to their neighbors brutal honesty, but Titus Terranova appears undeterred.  As you can see in the attached clip, he told one reporter: "As far as I know, that thing right up there on that pole," he said pointing to the large American flag fluttering above his home, "gives me right to do whatever I want to do unless I hurt somebody else."

UPDATE:  I just noticed my favorite part of the sign - the line on the bottom inviting people to "call for more info."  Can you imagine the conversation?  "Yes, I have a question about the fireworks..."