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Mount Laurel Township v. Stanley

185 N.J. 320, 885 A.2d 440 (2005)

CONDEMNATION; VALUATION—Where the increase in value of a property is due solely by reason of inflationary circumstances after a judgment of repose has been entered, the proper date of valuation is when the condemnation complaint is filed, not when the judgment of repose was entered.

As a result of litigation challenging the exclusionary zoning of a municipality, a judgment of repose was entered. The judgment designated certain lands being used for a home and a farm “as a future site of low and moderate income housing.” The municipality “did not file a complaint to condemn the property until five years later.” During that period, the fair market value of [the] property rose significantly due solely to inflationary pressures.” An argument ensued about the date of valuation for the purpose of determining just compensation for the taking. By statute, the date of valuation is the earliest of: “(a) the date possession is taken by the condemnor; (b) the date of the filing of the condemnation complaint; (c) the date on which action is taken by the condemnor which substantially affects the use and enjoyment of the property; or (d) the date of the filing of the declaration of blight or, in the case of property maintained as abandoned, the date of expiration of the condemnee’s right to appeal from inclusion of the property on the abandoned property list.” The municipality asserted that this matter was governed by subpart (c) and therefore the proper date of valuation was in late 1997, “when the judgment of repose was entered approving [the municipality’s] fair share housing plan that included [the] property.” In opposition, the property owners argued “that the judgment of repose did not substantially affect their use and enjoyment of the property, because the later increase in value of the property was due solely to inflationary pressures and was not a result of any of [the municipality’s] actions, and because they continued to live on, use, and enjoy the property unabated until [late 2002].” Consequently, the property urged that the proper standard for determining the date of valuation was subpart (b), ” the date of the commencement of the action.” The lower court agreed with the municipality, holding “that the entry of the judgment of repose constituted a discrete and distinct act of the court confirming [the municipality’s] obligation to condemn the property in question.” The Appellate Division disagreed, explaining “that a substantial effect upon the use and enjoyment of the property is occasioned when the condemnor takes action and directly and immediately stimulates an upward or downward fluctuation in value which is attributable to future condemnation.” The matter then moved to the New Jersey Supreme Court.

The Court agreed with the Appellate Division, to wit, the filing of the judgment of repose in late 1997 did not “directly, unequivocally and immediately stimulate [] an upward or downward fluctuation in value [] which [was] directly attributable to a future condemnation.” It agreed that it was “undisputed” that the increase in value of the property after entry of the judgment of repose was “‘caused by inflationary circumstances,’ and was not the result of any act by the condemnor.” Therefore, applying the hierarchy of “earliest” events set forth in the statute, the proper date of valuation was held to be the date upon which the condemnation complaint was filed, five years after the judgment of repose had been filed.


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