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K. Hovnanian Shore Acquisitions, L.L.C. v. The Township of Berkeley

A-594-01T1 (N.J. Super. App. Div. 2003) (Unpublished)

DEVELOPERS; MOUNT LAUREL—It is appropriate for a court to grant a municipality a period of immunity from suits while that municipality is formulating its plans for compliance with newly promulgated affordable housing regulations.

A developer filed a builder’s remedy complaint against a municipality, alleged that the municipality failed to satisfy its Mount Laurel obligations described in an earlier judgment of repose. It also claimed that the municipality’s zoning ordinance failed to provide a realistic opportunity to achieve its affordable housing obligations. Lastly, it sought re-zoning that would enable it to build a certain number of residential units and affordable housing units. The lower court dismissed the complaint, finding that a different judge had issued a temporary immunity order protecting the municipality from builder’s remedy suits until one year after COAH new regulations covering the third housing cycle became effective. The temporary immunity order was granted to give the municipality the opportunity to comply with its affordable housing regulations without the threat of suits from developers. The lower court found the temporary immunity order to be appropriate because it felt the developer’s suit would not contribute positively to the finalizing the municipality’s required number of affordable housing units. The lower court noted that the developer could still participate in the process of monitoring the municipality’s compliance, which would bring about similar results as a builder’s remedy suit. The Appellate Division affirmed, noting that, before the legislature created the Fair Housing Act that established COAH, the New Jersey Supreme Court sought to establish procedures to monitor and expedite the lawsuits filed to enforce a municipality’s compliance with its affordable housing obligations under the Mount Laurel decisions. It also noted that the New Jersey Supreme Court indicated its willingness to depart from “established litigation models” in order to encourage voluntary compliance by municipalities. Here, the Court found that imposition of a temporary immunity order consistent with the Supreme Court’s approval of various models to encourage compliance. While recognizing that the immunity order could be perceived as a stalling tactic, the Court found that the municipality was entitled to develop its final affordable housing plan, using timely information, before being subject to builder’s remedy suits. Since the municipality was waiting for COAH’s third cycle requirements before it completed its plan, it was appropriate to prevent builder’s remedy suits from being commenced until the municipality knew all the requirements to be in compliance its affordable housing obligations.


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