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MDM Contractors, Inc. v. Board of Adjustment of Township of Pequannock

A-3093-03T1 (N.J. Super. App. Div. 2005) (Unpublished)

ZONING; HARDSHIP; TAKINGS—Denial of a dimensional variance does not constitute a taking where the property owner created the nonconforming lot by previously selling off a portion of its land without consideration of whether the remaining portion would be a conforming lot.

A contractor sued a board of adjustment, claiming that the board’s denial of its variance application constituted “a regulatory taking of the property entitling the owner to compensation by the municipality because the Board’s action denie[d] the owner economic or productive use of the land” and was “thus a taking requiring compensation under the compensation clause of the Fifth Amendment, as applied to the states through the Fourteenth Amendment.” The contractor also argued that the board’s denial of its requested variances “was arbitrary, capricious and unreasonable” and that the variances should have been granted since the contractor had established “that the benefits of granting the variances outweigh[ed] the detriments.”

The facts showed that a now-deceased owner held two adjoining lots and subsequently sold one of them while retaining the other lot. The contractor thereafter entered into a contract with the owner to purchase the other lot “contingent upon obtaining variances from the Board in order to permit the construction of a house on the lot.” Although the municipal zoning ordinance considered the contractor’s desired lot to be undersized when viewed separately from the other lot, it “did not institute an action to set aside the subdivision as illegal.”

The Appellate Division held that New Jersey law requires that a “grant of approval must actually benefit the community in that it represents a better zoning alternative for the property.” The Court therefore held that “[i]t was not arbitrary, capricious or unreasonable for the board to conclude that the grant of the variances ... would not ‘improve’ the zoning and planning in a way that would benefit the community, as opposed to solely benefit the landowner.” It also held that “the denial of the variances did not constitute a taking because the owners of the property created the nonconforming lot through their own actions” when they “sold off a portion of the property ... without consideration of whether the remaining portion of the property ... would be a conforming lot.” It further held that although the municipality was “precluded from judicial relief to set aside the illegal subdivision of” the lots because the “two year statute of limitations” period had passed, that fact did not “validate the subdivision for land use purposes.” Finally, the Court held that the lot the contractor attempted to purchase “was not zoned into idleness, but became idle as a result of the sale of” the other lot, which was “an action taken by its very owner.” Therefore, it held “the denial of the variances did not constitute a regulatory taking.”

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