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McAdams v. Dagit Brothers Holding Company, LLC

ATL-L-4895-06 (N.J. Super. Law Div. 2008) (Unpublished)

DEVELOPERS; APPROVALS — A developer assumes the risk of taking preliminary steps toward construction of its project based upon its land use approvals if it does so without first ensuring that any property disputes it may have with its neighbors have been settled.

A number of property owners (who owned houses near a shoreline), regularly accessed the water and had floating docks along the shoreline of a bay. Their houses were separated from the water by a right-of-way, part of which was improved by a marginal road along the shoreline from which they accessed the water. Another part of the right of way was a road that led to the shoreline. A developer owned properties along the bay, along a lagoon that extended off of the bay, and along the road. It sought to build a boat-slip marina and yacht club on the bay’s coastline. The developer claimed that it held title to the road and the right-of-way because it was never dedicated and were located on one of his lots. After receiving approval from a municipal board, the developer took the preliminary steps of implementing its project and destroyed the floating docks. It also sought the exclusive right to provide access to the lagoon and to deny access to residents who had accessed the lagoon through the abutting shoreline. The property owners then sought a declaration of riparian title to the shoreline adjacent to the right of way. The developer, in a counter-claim, sought title to the shoreline so that it could build the marina. The neighboring resident entered the proceedings, seeking riparian rights and the right to access the water through the nearby shoreline.

The Court found that the developer had no ownership interest in the right-of-way or in the road and, as a result, had no claim to be a riparian owner. It pointed out that since there was evidence that the road and the right-of-way had been dedicated as public, the municipality couldn’t convey those areas to the developer. It also found that it would have been unlikely that the grantor of the properties would have intended that the right-of-way and adjacent shoreline would somehow become the property of the owner of an adjacent lot, not owned or subdivided by the grantor, as opposed to being reserved for continuous access by owners of the subdivisions abutting the right-of-way.

The developer’s argument that it had no knowledge of the resident’s right to access the shoreline when it purchased the adjacent property was rejected. The Court found that the neighboring resident had assumed that it had right of access to the shoreline when he took title to his property even though it was not explicitly mentioned in his deed. Previous owners of the land had the explicit right to access the shoreline in their deeds and the Court pointed out that unless a subsequent conveyance explicitly excluded such a right, the right to access the shoreline remained. Also pointed out was that a standard title search goes back at least sixty years and normally should extend to the warranty, or original deed. Had the developer conducted an adequate title search, it would have discovered that such rights existed by deed and by reason of an earlier lawsuit.

The Court determined that only the property owners whose properties adjoined the right-of-way had any claim to use the right of way and to the adjacent riparian land. It also determined that the neighboring resident held riparian rights to the shoreline of the lagoon. The developer was deemed to have assumed the risk of taking its preliminary steps towards the construction of the marina based on its land use approvals but without ensuring that any property disputes had been settled.

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