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Mott v. Zoning Board of Adjustment of Ocean City

A-1584-08T1 (N.J. Super. App. Div. 2009) (Unpublished)

ZONING; EQUITABLE ESTOPPEL — Equitable estoppel is a remedy available against a governmental entity where its misconduct or that of its officials, acting strictly within the scope of unlawful authority, threatens to work a serious injustice against a person who has reasonably relied upon such conduct to his or her detriment.

The owner of a commercial building and a nearby parking lot applied for site plan approval and certain variances to improve both properties. The zoning board approved an integrated site plan and granted a use variance to create parking spaces on the parking lot parcel. At the time of the original application, the commercial zone where the building was located required parking. The municipal zoning ordinance subsequently was amended by eliminating the parking requirement. As a result, the property owner decided to build a two-family home on what was to be the parking lot site. Such a home was a permitted use in the zone. He received a zoning permit certifying that the site was approved for residential use and obtained a street opening permit and a construction permit after paying the applicable fees therefor.

After receiving building permit, the property owner paid its contractor a deposit to do the construction work. The builder contracted with several sub-contractors, spending a portion of the owner’s deposit. After the project was partially completed, the municipal zoning officer concluded that the zoning permit should not have been issued because the parking lot site was part of the integrated site plan approval related to the commercial building. He rescinded the permit because of noncompliance with the zoning code. The municipal construction official rescinded the building permit for the same reason and a stop work notice was issued. As a result of such actions, construction was halted. The owner applied to the board for approval of an amended site plan, seeking to remove the requirement that a parking lot be built on the parking lot parcel. The board denied the application. The property owner challenged the board’s determination.

The lower court held that equitable estoppel precluded the municipality from rescinding the building and zoning permits and ordered the reinstatement of both permits. It also granted the property owner permission to complete construction of the residential building. It noted that the municipality, at the time of the homeowner’s request to build the residential building, had previously eliminated commercial parking requirements for the commercial district. Further, it ruled that the project would not significantly harm the zoning scheme because the proposed home was a permitted use resulting in the elimination of a non-conforming use parking lot. The Court also found that the property owner relied on the permits granted by the municipality – permits that were issued and received in good faith and that gave him permission to do exactly what he did. The Court stated that “there should be some point at which the owner of a property who acts in such circumstances becomes secure.” The Court declared that in the instant action, the property owner had reached that point. It declared that the municipality must be reasonably amenable to fair standards of conduct in its transactions with outsiders. The municipality appealed.

The Appellate Division affirmed. In doing so, it ruled that estoppel is a remedy available against a governmental entity where its misconduct or that of its officials, acting strictly within the scope of unlawful authority, threatens to work a serious injustice against a person who has reasonably relied upon such conduct to his or her detriment. Here, the Court found that the property owner reasonably relied on the zoning and building permits and the Court concluded that it was unfair to revoke these permits after the owner had expended substantial amounts of money.


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