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Township of White v. Castle Ridge Development Corporation

419 N.J. Super. 68, 16 A.3d 399 (App. Div. 2011)

DEVELOPERS — Where a developer’s agreement with a municipality requires the developer to “maintain” the roadways within a project, the developer is required to do snow removal because snow removal is included within the definition of “maintain.”

The owner of a forty-seven acre parcel was granted preliminary major subdivision approval to create fifteen lots and to construct single-family homes on each lot. The approval was conditioned on an understanding that the approval would not obligate the municipality to maintain or exercise jurisdiction over any street or other improvement required by the municipality. Final subdivision approval was granted and a developer’s agreement was executed. The developer’s agreement provided that the landowner was bound by both the preliminary and final approval resolutions. It also incorporated the language of the preliminary approval resolution. Each house was to face a central road to be constructed by the landowner at its own expense.

The developer’s agreement required the landowner to maintain and repair the roadway and storm drain facilities it was constructing and to maintain all municipal-owned property for two years. These obligations were covenants running with the land, and the municipality had the right to recover legal fees in any action to enforce the maintenance provision. Also, the agreement gave the municipality the right to maintain the improvements and charge the owner for the actual cost of the work. The landowner was required to remedy any dangerous or unsafe condition created by the developer. The new street was to be dedicated to the municipality after title passed to the municipality.

The landowner developed eight homes before it stopped short because of depressed economic conditions. The new street’s pavement was unfinished, so the municipality did not accept the street as part of the municipal roadway. Apparently because of economic hardship, the landowner stopped maintaining the street. The municipality then began to provide winter maintenance on the street. The landowner sent a letter to the municipality saying that it, the landowner, was no longer responsible for the street’s maintenance. In reply, the municipality sought reimbursement and threatened legal action. In a final reply, the landowner insisted that it was not responsible. Eventually, the municipality plowed and salted the road twelve times, leading it to file a complaint in the Law Division seeking reimbursement under the developer’s agreement for the money it expended as well as for its attorney’s fees. The complaint also sought a declaration that the landowner was liable for all winter maintenance until the municipality accepted the street. The lower court granted the municipality all relief sought.

On appeal, the landowner claimed that the lower court incorrectly interpreted the developer’s agreement as imposing a maintenance obligation on it, and, alternatively that such a provision would be void as against public policy because the municipality was collecting tax revenue from the completed properties. The Appellate Division noted that although the agreement did not explicitly state that the developer had the responsibility for maintaining the roadway until acceptance by the municipality, that reading was the only fair and reasonable implication to be drawn. The agreement excluded any obligation on the municipality’s part to maintain the street, while requiring the landowner to keep the street safe. The Court agreed with the lower court that snow removal was included within the definition of “maintain” because it was necessary to keep the street operating and productive.

The Court next noted that a municipality has no maintenance obligation with respect to private roads, but that a municipality may voluntarily assume the obligation at its own expense. Here, the street had clearly not been dedicated to the municipality. Because the landowner continued to own the street, the municipality owed no duty to maintain it.

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