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D.L. Real Estate Holdings, L.L.C. v. Point Pleasant Beach Planning Board

176 N.J. 126, 820 A.2d 1220 (2003)

ZONING; APPROVALS—A municipality may set a time limit for seeking final subdivision approval after preliminary approval has been granted.

A municipality approved a property owner’s application for preliminary subdivision approval for the creation of fourteen single family lots. The owner failed to seek final approval within three years. Four years after the preliminary subdivision approval was granted, the owner sold the property to another developer. One year later, the successor developer applied for final approval. The application was denied, not based on the lack of compliance with the substantive requirements, but solely based on its failure to file the application within three years. The developer sued the municipality claiming that the Municipal Land Use Law (MLUL) does not permit a municipality to set a time limit for seeking final subdivision approval. The lower court upheld the zoning ordinance, finding that it was not inconsistent with the MLUL and that is furthered public policy by protecting the municipality from the revival of dormant applications. The Appellate Division reversed finding that the MLUL does not specifically limit the life of a preliminary subdivision approval; therefore, municipalities cannot enact ordinances setting a time limit for subdivision approval.

The Supreme Court reversed, holding that pursuant to New Jersey’s constitution, the powers conferred upon municipalities by the legislature, including those that are fairly inferred, incident or essential to those powers, are to be liberally construed. The MLUL does not provide that a preliminary approval has infinite life absent a zoning change. Therefore, the imposition of a time limit for obtaining final approval is not inconsistent with the MLUL. The Court also noted that a municipality has a legitimate interest in limiting the time frame within which final approvals must be sought because it encourages prompt approval of property consistent with the preliminary approval. It also furthers a municipality’s ability to effectively plan the development of property. Three justices dissented, noting that the MLUL was designed for the purpose of having uniform, consistent, and predictable subdivision approval processes in all municipalities in the State of New Jersey. They argued that, in keeping with the goal of uniformity and consistency, no municipality should be permitted to limit subdivision approval in a manner that is not specifically provided for in the statute.

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