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S. Development Co., Inc. v. Township of Lyndhurst Zoning Board of Adjustment

A-2925-07T2 (N.J. Super. App. Div. 2009) (Unpublished)

ZONING; APPROVALS; EXTENSIONS — New Jersey statutes do not suspend the running of the protection period following a land use board’s approval while a developer pursues approvals from other agencies, but only do so where a legal action has been instituted, a direct order has been issued by an agency or a political subdivision, or an order has been issued by a court.

A developer entered into a purchase contract for a property. It wanted to build a residential condominium complex even though the property was located within a business district. The developer obtained bulk and use variances prior to closing. A 2001 zoning board resolution required the developer to comply with all other local, county, and state laws, which included a requirement that the developer obtain approval from the County Department of Planning and Economic Development (DPED). After the developer submitted its application to the DPED, the DPED wrote to the municipality asking that it withhold issuing any building permits for the site. Prior to its review of the application, the DPED sent a list of the application’s deficiencies to the developer. The developer closed title in 2003, but did not receive notice that the DPED had “no objection to the issuance of permits” until 2006, more than five years after the municipality initially granted the variances. Shortly thereafter, the developer’s application for a building permit was denied by the municipality because the 2001 variances had expired. The zoning officer cited a municipal ordinance that set expiration dates for variances, such as when work has not commenced timely (a one-year extension) or where the use variance also requires subdivision or site plan approval (a three-year extension). After a hearing, the board affirmed the zoning officer’s denial of the building permit. During the hearing, the board noted that condominiums had been “ordinanced out” in the municipality following the date of the grant of the original variances in 2001. The developer sued, but the lower court affirmed the board’s decision. It held that the board reasonably interpreted the ordinance when it ruled that the approvals had expired. It noted that the developer never applied for an extension to preserve the approvals and failed to present evidence to the municipality that the ordinance was inapplicable.

The developer appealed again, but the Appellate Division affirmed, holding that the lower court’s decision was not arbitrary, capricious or unreasonable. The Court found the ordinance’s three-year extension period to be applicable. It ruled that such a limitation on the validity of a variance is permissible even if it provides no mechanism for an extension of the time limit. According to the Court, the tolling provisions set out under New Jersey’s statutes do not suspend the running of the protection period following a local board’s approval while a developer pursues approvals from other agencies. According to the Court, to benefit from a statutory tolling there must be a legal action instituted, or a directive or order issued by a state agency or a political subdivision, or a court order to toll the statute. That was not the case here. The Court found that the developer could have sought a declaration from the DPED that the application was “deemed approved,” but didn’t. It concluded that the developer knew, or should have known, that the approvals would expire three years after they were issued and that it had the ability to seek automatic approval from the DPED within sixty days after its application was complete. Thus, it ruled that there was no legal or equitable basis to compel the board to extend the variances.

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