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Oldja v. Ocean Ventures at Bay Pointe Dunes, Inc.

A-0699-01T1 (N.J. Super. App. Div. 2002) (Unpublished)

CONTRACTS; PERMITS— A contractual obligation to obtain all permits for construction does not include an obligation to get land use approvals.

A buyer entered into an agreement with a contractor to purchase property and have a large home built on it. The contract contained two relevant provisions. One provided that “title to be conveyed shall be subject to restrictions, covenants, easements, municipal ordinances, county, state and federal laws and regulations… .” The other required the contractor to obtain and pay for “[a]ll construction permits required by the Municipality or any entity having regulatory jurisdiction over the construction on this site… .” Although the contractor had previously built homes of similar size and design in this municipality without the need to obtain variances, a newly appointed municipal engineer interpreted the local ordinances to require that “all new houses be kept at a further [sic] distance from the dune than originally granted” in the approvals obtained by the contractor. That made the buildable area of the lot smaller and the house would not fit on the lot. Despite the contractor’s efforts, the municipality would not relent and the contractor returned the deposit and interest thereon. The buyer filed a complaint seeking specific performance. The lower court found that the provision of the contract dealing with title was construable “as a contingency such that if the ordinance precluded construction of the house as designed, [the contractor would] be excused from performance.” The lower court directed the parties to submit the question to the municipal zoning board of adjustment. They did, and the zoning board confirmed the opinion of the municipal construction official. With that information in hand, the lower court found that it was impossible to build a home in conformance with “the existing ordinance as determined by the code enforcement officer and as affirmed by the board of adjustment.” It therefore granted judgment in favor of the contractor. On appeal, the buyer argued that the contractor “was obligated to seek a variance to a build the house because of the paragraph that required the contractor to obtain all construction permits. The Appellate Division rejected that argument because the obligation to obtain “construction permits” did not refer to “zoning variances.” According to the Court, “[c]onstruction permits and variances are separate and distinct, each having their own governing rules and regulations. We cannot infer that the term ‘construction permits’ in paragraph twelve included variances without some indication in the contract that the parties intended it to be so.

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