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Chatterjee v. Atlantic City Board of Education

A-2334-06T1 (N.J. Super. App. Div. 2008) (Unpublished)

CONDEMNATION; RELOCATION — Homeowners displaced by reason of a condemnation are entitled to the reasonable cost of replacement housing, but not a windfall based on the value of their replacement property.

A municipal board of education sought to condemn a number of properties for the purpose of constructing a building for the school system. The board submitted an assistance plan to the New Jersey Department of Community Affairs (DCA) for the relocation of those residents who had their properties condemned. The plan, reached through a consent judgment, called for payment of $15,000 for each condemned property in addition to a payment equal to the value of the properties. Two separate homeowners contacted the DCA to challenge the plan, contending that the school board was obligated to pay them the value of replacement housing and that the additional $15,000 offered by the plan was insufficient. The school board’s plan was upheld at an administrative hearing.

At a second administrative hearing following remand from the DCA, the homeowners testified that they wished to remain in the same neighborhood because it was close to their jobs and ethnically diverse. By the time the second hearing was held, each homeowner had found a replacement property costing more than the value of their previous home. A determination was issued finding that each homeowner had acquired a property that was larger than its previous home and that each was entitled to the difference between the amount that it was paid for its previous home and the reasonable cost of comparable housing which was not to be capped at $15,000. The determination acknowledged that the board’s relocation efforts were inadequate, but also included a finding that rejected the homeowners’ assertion that comparable housing was not available. It also held that replacement housing did not have to be in the same neighborhood. A determination was also issued finding that since neither party produced any evidence about the cost of comparable properties, the board’s assistance plan and $15,000 award was to be reversed. Ironically, the Administrative Law Judge also declared that the homeowners were not to receive any relocation assistance because the homeowners had not proven any damages. The Administrative Law Judge’s decision was upheld by the DCA Commissioner.

On appeal, the Appellate Division reversed the portion of the decision that had invalidated the $15,000 payment, noting that it had already been paid, but affirmed the finding that the homeowners had failed to establish that they were entitled to additional funds. The Court found that the homeowners were entitled to the reasonable cost of replacement housing, but not to a windfall which would have resulted if the homeowners were to receive the full value of their replacement properties. It held that the expert real estate witness for the homeowners offered what amounted to an opinion on the value of the homeowners’ former homes but no evidence or method that would have indicated the reasonable cost of comparable housing. The Court also rejected the homeowners’ claim for attorneys’ fees even though such fees are statutorily permitted when a condemnation is dismissed, because their challenge emanated from the terms of the assistance plan and not from the condemnation itself, which was not dismissed but was resolved through a consent judgment.


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