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Mount Laurel Township v. Stanley

A-1832-03T1 (N.J. Super. App. Div. 2004) (Unpublished)

EMINENT DOMAIN—The valuation date for determining the amount of just compensation payable for a taking is the date upon which the condemnation process, with certainty, affects the value of the property or the date upon which the condemnation complaint is filed, whichever is later.

A property owner’s lot was condemned for an affordable housing project to serve senior citizens. The condemnation was outlined in the Judgment of repose in Mount Laurel I. A hearing on a proposed settlement took place in 1997, leading to a judgment of Repose being entered on December 3, 1997. That judgment approved the municipality’s fair share plan to meet its obligation of affordable housing, part of which included the construction of the senior citizen housing project on two lots, one of which was owned by the owner. Timelines were then established for the municipality to obtain a title report and an appraisal, to enter into negotiations with the affected property owners, and to file a condemnation complaint if, within sixty days, the negotiations did not achieve a written agreement to purchase the properties.

After extended negotiations, on May 8, 2002, the municipality filed a condemnation complaint and an order to show cause to acquire the owner’s property. Condemnation commissioners were appointed on May 24, 2002. The municipality moved for a valuation date determination, which was set as December 3, 1997. Based on the value of the owner’s property on December 3, 1997, the commissioners found that the municipality had to pay the owner $750,000 for the condemned property. The owner disputed the amount, claiming that the proper valuation date should have been May 8, 2002, at which time his property was worth over $1 million.

The lower court affirmed the valuation date established by the commissioners. It held that N.J.S.A. 20:3-30(c) was applicable. That statute provides that just compensation is to be determined as of the date on which action which substantially affected the condemnee’s use and enjoyment of the property was taken by the condemnor. The lower court concluded that the appropriate date of valuation was December 3, 1997 because that was the date of the Judgment of Repose which clearly identified the property as a property to be acquired by the municipality.

On appeal, the Appellate Division noted that the cited subsection (c) only governs the date of just compensation when the effect of the certainty associated with the municipality’s condemnation causes an increase or decrease in the property’s value. The purpose of subsection (c) was to identify events that affected the value of property so significantly that it would be unfair, either to the condemnor or the condemnee, to allow a post-event fluctuation in value to be reflected in the condemnation award. Then, the Court noted that the 1997 judgment was not sufficiently clear to even cause any type of post-event fluctuation. The 1997 judgment included a handwritten cautionary warning that it might be “modified by further order.” According to the Court, this did not necessarily convey certainty. Additionally, the municipality’s attorney wrote to the owner’s attorney on February 10, 1998, telling him that it was possible that none of the owner’s land would be needed for the project. Finally, in June 2001, the 1997 judgment was modified, reducing the amount of land the municipality would condemn. The Court also found no evidence that the increase in the property’s value was due to the 1997 judgment. Accordingly, pursuant to N.J.S.A. 20:3-30(b), the valuation should have been based upon the date that the condemnation complaint was filed, i.e., May 8, 2002.

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