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Gayatriji v. The Borough of Seaside Heights Planning Board

372 N.J. Super. 203, 857 A.2d 659 (Law Div. 2004)

ZONING; HOTELS; SEASONAL USE—Municipalities bordering the Atlantic Ocean may not enforce zoning ordinances that would deny hotels the right to operate year-round, but if a hotel operator seeks a variance, a land use board may make seasonal operation a condition to granting the variance.

In 1998, a local planning board permitted a motel to go from thirteen units to twenty-four units. The relief was subject to a condition that the units be used only from April 1 to September 30 of each year. During this hearing, however, it was noted that sometime between 1981 and 1985 a mercantile license had been issued showing that the building contained twenty-six rental units. If true, this would have meant that a conversion had taken place for which there was no official approval. The motel owner claimed that the municipality had begun to treat the motel as having twenty-six units as early as 1986 when it issued the mercantile license.

In 1998, the then owner and the board extensively discussed whether the municipality was estopped to deny the continued use of the twenty-six units or whether the owner should have done more to assure himself that the use conformed to the current approvals. That is why the planning board and the motel owner compromised and agreed to extend the motel’s rental units to twenty-four, while adding the seasonal restriction.

A new owner acquired the motel in 2002. It then applied to the board to have the seasonal use restriction removed, arguing that it violated N.J.S.A. 40:55D-68.1 which provides that any hotel within a municipality bordering the Atlantic ocean is be permitted to operate on a full-year basis notwithstanding any municipal ordinance, rule or regulation to the contrary. The board denied the owner’s request, asserting that the seasonal condition had been agreed-upon by the owner in exchange for an increase in motel units beyond what was permitted and therefore constituted a voluntary waiver of the owner’s rights.

On appeal, the Court held that the seasonal restriction violated the statute because under the statute, the board could not prohibit the motel owner from asserting his statutory right to operate the motel on a full-year basis. Thus, the Court proceeded to determine the consequences of deleting the illegal condition from the prior approval. It first noted that variances can only be granted to land, not landowners. It also noted the 1998 board intended the seasonal condition to be inseparable from the variance and there was testimony that the previous owner would not have received the variance to use the twenty-four units unless it was restricted to seasonal use. The previous owner did not challenge the condition. Instead, he readily accepted it to achieve his main objective, a validation that the motel use that had grown to twenty-four units. The Court accepted the board’s assertion that it would not have approved the variance but for its assumption that the condition was validly imposed under the circumstances and that it would be sustainable on appeal. The Court also pointed out that the newest owner knew of the limitation before buying the motel, and knew before closing that the previous owner never received any other permission to expand to twenty-four units. Therefore, given that the variance and the seasonal restriction were inseparable, and given that the condition was in violation of the statute, the Court held that both the seasonal restriction and the variance were invalid. Since the new owner was unwilling to waive the invalidity, he now owned a motel that didn’t have a seasonal restriction, but might have contained too many rental units.

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