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Eltrym Euneva, LLC v. Keansburg Planning Board of Adjustment

407 N.J. Super. 432, 971 A.2d. 466 (N.J. Law Div. 2009)

ZONING; PRIOR NON-CONFORMING USE; ABANDONMENT —The acts that might prove abandonment of a non-conforming use where a prior property owner had filed for bankruptcy protection may not rise to the same level where the former owner had lost the property by way of tax sale.

A property owner challenged a municipal board of adjustment’s determination that it could not use its property as a multifamily dwelling because the zone where the property was located did not permit such a use. When the board of adjustment found that the property’s prior use as a multifamily dwelling had been abandoned, the property owner sued. The Court supported the property owner, holding that the zoning board’s decision was arbitrary, capricious, and unreasonable. The property owner had presented a housing inspection card and a tax assessment card, both pre-dating the zoning ordinance. Each of those cards listed the property as a multifamily dwelling. The property owner also presented tax assessment cards showing that the property had been built as a multi-family dwelling more than sixty five years before the change in zoning. The zoning board however, ruled that the inspection card and tax assessment card were insufficient to show that the property was being used as a multifamily dwelling before the change in zoning. It argued that the property owner failed to present phone listings, utility bills or leases to show that the property was still being used as a multifamily dwelling. The Court disagreed, finding that while a single inspection certificate or tax assessment card may not be sufficient to establish a pattern of use, “the documents in toto comprise[d] a historical snapshot of the property’s use.”

The Court noted that whether or not a use has been abandoned is dependant on intent. There can be an expressed intention to abandon a non-conforming use, or a change in circumstances can negate an expressed intent to continue a non-conforming use. The Court noted that, in another, earlier case, a property owner had stopped using its property in a non-conforming manner, defaulted on the mortgage, and later filed for bankruptcy protection. In that case, the acts of the property owner demonstrated an abandonment of the non-conforming use. However, in this case, the property owner acquired the property by means of a tax lien sale.

The Court distinguished a bankruptcy case from a tax sale. Whereas a bankruptcy filing and divesting of assets is an overt act demonstrating intent to abandon, allowing title to pass by means of a tax sale is passive. The prior owner’s allowing the tax sale to proceed only indicated that it did not have sufficient funds to pay the taxes. That act, by itself, did not demonstrate an intention to abandon the prior non-conforming use. As a result, the Court found that the zoning board did not establish that the property owner or the prior owner expressed any intention to abandon the property’s use as a multifamily dwelling. It noted that the buildings were still separately metered for utilities, each unit contained separate living and kitchen facilities, and each had a separate entrance. On that basis, the Court found that the prior non-conforming use had not been abandoned. The Court also found that the municipality was equitably estopped from denying the property owner a non-conforming use permit because the municipality was involved in the matter before the property owner acquired title and commenced renovations. Specifically, the property owner met with municipal officials and was presented with official documents that had been interpreted by its officials before the owner acquired the property. Further, the municipality had issued permits and approved the property owner’s work to date and only objected to the property’s use at the final stages of the renovation. As a result, the Court found that the property owner relied on the municipal documents and interpretations from municipal officials to its detriment, and the municipality was therefore estopped from denying the property owner the right to use the property as a multifamily dwelling.

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