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Rumpeltin v. Timber Valley at Ramsey Condominium Association

2006 WL 3199156 (N.J. Super. Ch. Div. 2006) (Unpublished)

AFFORDABLE HOUSING—Municipal actions limiting the right to rent out living units that are qualified as low or moderate income units are presumed to be valid and such presumption can only be overcome by clear and convincing evidence.

The owners of condominium units, whose units qualified as low or moderate income units, challenged a municipal ordinance limiting their right to rent out the units. The municipality had adopted an ordinance that required the owners to prove that, as of the time the ordinance was adopted, their units were rented to qualified individuals; otherwise, the owners would be required to resume occupancy of the units. The owners asserted that they purchased their units with the understanding that they could either live in them or rent them to qualified low to moderate income individuals, and that within thirty years, the units and would be deregulated and could be sold at market value. They asserted that the municipality received its Council on Affordable Housing certification two years after they purchased their units, and that the restrictions placed on them constituted a taking without reasonable compensation. The owners’ claim alleged fraud, discrimination, violation of the Consumer Fraud Act, violations of the Planned Redevelopment Full Disclosure Act, and racketeering. They requested a preliminary injunction and the municipality moved to dismiss the complaint. The Court noted that in order to obtain a preliminary injunction, one must demonstrate that: (1) irreparable harm is likely if the relief is not granted; (2) the underlying law is well settled; (3) the material facts are not substantially disputed and there is a likelihood of success on the merits; and (4) the balance of hardship to the parties favors the party seeking the injunction. With respect to “irreparable harm,” the owners needed to show that they could not be made whole (if their claim was ultimately successful) by receiving a monetary award. The Court found that the owners failed to show that they were likely to succeed. It also noted that municipal actions are presumed to be valid and the presumption could only be overcome by clear and convincing evidence. The Court found that the municipal ordinance was enacted in order to comply with its obligation to provide affordable housing. The Court also found that, even if the owners were able to succeed in their claims, they failed to demonstrate that they would not be adequately compensated with a monetary award.

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