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Jock v. Zoning Board of Adjustment of the Township of Wall

184 N.J. 562, 878 A.2d 785 (2005)

ZONING; MERGER OF LOTS—The merger doctrine for undersized lots requires absolute unity of ownership; neither dominion and control alone, nor equitable or constructive ownership will result in merger of contiguous undersized lots.

At a time when the municipality had no zoning ordinance, a family divided a large tract of land into lots. Four of those lots were conveyed to various individuals and they in turn were conveyed to other individuals over several years. Residences were built on those lots. In 1995, “the four lots became non-conforming with the adoption of a zoning ordinance requiring minimum dimensions. The ordinance made an exception for preexisting non-conforming lots ‘provided the owner owns no adjacent land which may, without undue hardship to him, be included as part of the plot in question.’” Two years later, one of the lots was conveyed to a couple and a year or two later they purchased a twenty foot strip of land from an adjacent lot. With the planning board’s approval, it was added to the couple’s lot so that its side yard conformed to the zoning ordinance. “The planning board’s approval was conditioned on the zoning board granting a variance to allow a five-foot side-yard setback [on a lot adjacent to the lot from which the strip of land had been taken (owned by the same owner as the strip of land)], in exchange for the [couple’s] grant to the [municipality] of a drainage easement across the twenty-foot strip of land that had been added to [their lot].” During this time, the couple also purchased the lot that had just received the five foot side yard setback variance. At closing, they directed that it be placed in their son’s name. Many years later, the son agreed to give his brother a half interest in the vacant land. Over the years, with the knowledge and approval of their sons, the couple used their sons’ lot for various purposes, including construction of a storage shed. The couple also fenced their lot and their sons’ lot, planted a garden on their sons’ lot, and dug a well on their sons’ lot to provide water to both lots. The father paid taxes on the sons’ lot. The sons, however, maintained their own lot, “including brush clearing and mowing, and considered themselves the owner.”

In 1989, the couple and their sons listed their lots separately for sale. An interested buyer contacted the municipality’s zoning officer to inquire whether the lots had merged. The zoning officer sent the interested buyer “a letter that, in short, advised that the lots had not merged because they were under separate ownership, therefore, a re-subdivision would not be necessary.” The buyer then made a separate offer on each lot. Although listed as the buyer on separate contracts, each contract reserved the right for the buyer to assign it to another entity. He did that. The couple’s lot was transferred to him personally and the sons’ lot was transferred to a corporation owned by him. The buyer immediately placed the couple’s lot back on the market and applied for permission to construct a house on what was the sons’ lot. An adjacent lot owner, later joined by the ultimate buyer of the couple’s lot, filed a complaint seeking reversal of the variance used to build on what was now the corporation’s land. Ultimately, the zoning board “determined that the two lots were in separate ownership and never merged at the time that [the individual and his corporation] purchased them, and that the lots did not merge under [the individual and his corporation], who were separate entities. [It] also determined that [the corporation’s] hardship was not self-created and that there was no available land [the corporation] could have purchased to increase the size of [its lot] because [the adjacent lot] was also undersized and because of the proximity of the house on [yet another adjacent lot] to the [corporation’s lot’s] property line. Moreover, the board determined that the neighbors were not interested in purchasing [the lot in question] at [its] market value.”

The adjoining lot owners filed a complaint in the Law Division seeking vacation of the board’s decision and arguing that [the two lots] had merged as a matter of law.” The lower court ruled that the lots had not merged and rejected the argument of a “constructive merger.” The Appellate Division reversed, concluding “that when one party exercises dominion and control over the contiguous non-conforming lot of another or where the property is in equitable or constructive ownership, a merger occurs.” On further appeal to the New Jersey Supreme Court, the Appellate Division’s ruling was reversed and the lower court’s ruling that the lots had not merged was reinstated.

The Court held that “[t]he term ‘merger’ is used to describe the combination of two or more contiguous lots of substandard size that are held in common ownership in order to meet the requirements of a zoning application.” According to case law, merger “requires identity of title. Neither related ownership nor dominion and control are at issue. As such, the rule is simple, requiring only a title search, and it results in uniformity and predictability of outcome. To import into the merger doctrine a conduct analysis would require land use authorities to determine the historical relationship between and the conduct of adjoining property owners toward each other and toward the lands. The same onus would fall on all purchasers of undersized lots, in contravention of the accepted principle that a purchaser should be able to rely on record title. The result would be a proliferation of merger litigation with complex proof problems and the loss of simplicity, uniformity and predictability.”

The Supreme Court also reversed the Appellate Division’s ruling “that the contracts of sale to [the buyer] operated to transfer title to him on an equitable conversion basis, thereby resulting in merger.” It held that the contracts did not “suggest that the parties expected, intended or even imagined that they would eliminate the separate legal titles in which the properties had been held up to that point.” It also rejected the “claim that the hardship in this case was self-created [by the corporation] or a predecessor in title, thus barring the right to a hardship variance… . Undue hardship refers solely to the particular physical condition of the property, not personal hardship to its owner, financial or otherwise. A self-created hardship requires an affirmative action by the landowner or a predecessor in title that brings an otherwise conforming property into non-conformity.” Here, when the lot was originally created it complied with existing zoning laws. The hardship was created when the zoning ordinance was changed. Thus, when the lot in question was purchased, eventually in the name of the corporation, it was already non-conforming.

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