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New Jersey Dept. of Environmental Protection v. Shelter Bay Club Townhome Assoc., Inc.

OAL Docket No. ESA 9346-91 (Department of Environmental Protection 1998)

DEVELOPERS; HOMEOWNERS ASSOCIATIONS; PERMITS—A homeowners association that benefitted from the environmental permit obtained by the original townhouse developer is bound by the permit conditions even if they are not a matter of public record.

A homeowners association constructed a fence along part of its property, unaware that the Department of Environmental Protection (DEP) had issued a permit requiring the creation and maintenance of a public access walkway through that part of the property and the dedication of an easement to preserve the walkway. When the DEP fined the association and directed the fence to be removed, the association argued that it was not bound by the permit because the permit was issued to a general partner of a developer in his own name. Although the developer was the prior owner of the property, the association claimed it had no notice of the permit because the general partner was not in the chain of title, and failed to inform the association that there was a permit imposing conditions on development. The association also argued that the DEP acted outside its authority because the public walkway requirement was not authorized by statute, and the public access requirement was a taking of private property without just compensation, in violation of the United States Constitution.

The DEP Commissioner found that the association had constructive notice of the permit conditions by virtue of its master deed, which expressly stated that it was subject to facts and easements shown on a subdivision map which showed the public access easement. However, this was really an afterthought to the Commissioner’s dismissal of the association’s claims based on a finding that its appeal of the permit was untimely, since challenges to final agency decisions must be brought within 45 days of the final decision. The final permit was issued in 1983, yet the association did not challenge it until 1991. The Commissioner also ruled that the association was bound because the developer (the prior owner) had agreed to the terms of the permit in return for permission to build townhouse units. The Commissioner ruled that since this benefit eventually accrued to the association, it could not, “assume a position contrary to that of its predecessor.” Based on these findings, the Commissioner did not think it necessary to consider whether the requirements of the permit constituted a taking of private property, or whether the DEP exceeded its statutory and regulatory authority.


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