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Craig H. Taylor Holdings, L.L.C. v. The Township of Pittsgrove

A-6335-07T1 (N.J. Super. App. Div. 2009) (Unpublished)

ZONING — Simply attaching a copy of the applicant’s title report to a zoning application does not constitute notice to the land use board that there had previously been an illegal subdivision and consequently no viable claim can be made by the applicant that the municipality is estopped from acting with respect to the illegal subdivision on the basis it had failed to set aside the conveyance that created the illegal subdivision within the two year period required by statute.

A property owner subdivided a lot located in a residential zone. After the subdivision, the municipality amended its zoning ordinance for the zone and now required a minimum lot size of two acres having a lot width of 200 feet and a lot depth of 250 feet. As a result, each of the lots became undersized. The owner of the lot entered into a contract to sell each. The first lot was conveyed to a corporation without subdivision approval. Prior to closing on the second lot, its proposed purchaser filed an application for variances, pursuant to the Municipal Land Use Law (MLUL), for bulk lot size, width, and depth. The closing occurred prior to the board’s final disposition of the application. The board denied the now, new owner’s application for bulk variances for construction of a single-family home. It found that both lots had merged as a single lot for zoning purposes because they remained under common ownership after the amendment to the zoning ordinance, and that conveyance of the first lot created an unlawful subdivision. It noted that the hardship to the new owner was self-created by the action of the prior owner, and also the new owner had chosen to purchase the property without the development approvals that it knew would be required. The new owner appealed.

The Law Division upheld the board’s decision, finding that the determination was not arbitrary, capricious, or unreasonable. It also rejected the applicant’s argument that there was an inverse condemnation. While it agreed with the property owner that the amended zoning ordinance limited the use of the property, it held that it was not completely accurate to say that the property was zoned into inutility because technically there were other possible uses. It also noted that this was a self-created hardship which required that the inverse condemnation claim be dismissed. The new owner appealed.

The Appellate Division affirmed, holding that there was no dispute that conveyance of the first lot created an illegal subdivision, and that the hardship which the applicant claimed was self-created. It rejected the argument that, because the municipality did not set aside the first conveyance within the two-year period required by statute, the municipality was therefore estopped from asserting that the purchaser of the second lot was not entitled to claim inverse condemnation due to the self-created hardship. It held that despite receiving a title report showing the illegal subdivision and the existence of evidence in the tax records indicating such a parcel’s existence, the municipality did not have actual notice of the illegal subdivision. Simply attaching a copy of the owner’s title report to a zoning application does not constitute notice to the municipality.

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