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Mintz v. Township of Millstone

374 N.J. Super. 396, 864 A.2d 1160 (App. Div. 2005)

ZONING; RESTRICTIONS—A property owner is not bound by unrecorded and un-memorialized restrictions imposed by a land use board in prior hearings concerning the same property where the owner is not aware of those restrictions.

In 1980, a property owner received approval to subdivide his property into twelve lots. More than twenty years later, an owner of one of the subdivided lots who was under contract to purchase another one of the lots, applied to a municipal planning board for approval to further subdivide the lots. This owner’s application complied with all of the municipality’s zoning requirements, but the planning board denied the application, finding that when the original subdivision was approved, a restriction against further subdivision had been a condition of the approval. The planning board based its decision on anecdotal evidence, which included the recollection of several homeowners and the minutes of a planning board meeting at the time. The owner appealed.

The lower court reversed the planning board’s decision, finding it to be arbitrary and capricious. The Appellate Division affirmed, noting that there was no restriction against further subdivision in the subdivision deed; the restriction was not contained in the ordinance that approved the original subdivision; and that none of the deeds to the other lots in the original subdivision contained such a restriction. The board’s decision was based on recollections of residents for events that took place more than twenty years earlier. The board also pointed to minutes from a planning board meeting at the time with respect to a subdivision with a restriction against further subdivision. However, the minutes referred to by the planning board listed neither the lots in question nor the original owner. The board argued that, the minutes were meant to refer to this subdivision, but there was a typographical error and it erroneously referred to another owner. It also argued that if good public policy considerations existed, a purchaser could be restricted by an encumbrance of which he had no notice. The Court disagreed. It noted that under the Recording Act, a purchaser can be charged with notice of a recorded document if it can be discovered through a reasonable search of the chain of title. In cases where a restriction is not recorded, the court must balance the Recording Act against the municipal planning board’s power to limit the use of property. The problem in this case, however, was that this particular restriction against subdivision was never memorialized in an understandable manner. The only reference to the restriction was in the board’s minutes that referred to another owner and in the memory of several homeowners of events that took place two decades earlier. Consequently, the Court found that there was no need to weigh the municipality’s interest because there was no written memorialization of the restriction.

The planning board also argued that the owner did not have a hardship claim because the owner did not buy the second lot until several months after the planning board decision, so the owner knew at the time it acquired the property that there was a restriction. The Court rejected that argument, finding that the owner was the equitable owner of the other lot at the time of the application (since he was under a binding contract to acquire the property). Further, one could not impute notice of an unrecorded and un-memorialized restriction against the applicant.

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