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Yannitsadis v. St. Anargoi XIX, Inc.

A-3881-99T2 (N.J. Super. App. Div. 2001) (Unpublished)

ZONING; VARIANCES; LEASES—The owner of a structure on leased land has a sufficient proprietary interest to permit filing of a variance application without the consent of the land owner.

Two individuals owned a restaurant and the land on which it was located. They sold the restaurant business and structure to a corporation, but retained ownership of the land when they leased for a term of fifty years to the new restaurant owner. Thereafter, the restaurant owner notified its landlord that it intended to apply for a variance to increase the size of the restaurant and sought the landlord’s consent for the addition. The landlord appeared at the board of adjustment meeting and argued that the application was improper because it had not given its consent. Nevertheless, the restaurant owner was granted the variance. The landlord then commenced suit against the restaurant owner and the board, seeking to have the variance set aside on the ground that the variance application was invalid without the landlord’s consent. On cross-motions for summary judgment, the lower court ruled that the restaurant owner had “the necessary enforceable proprietary interest to make the development application” to the board. In a separate proceeding, it held that the “board’s decision to grant the restaurant owner a variance was not arbitrary, capricious or unreasonable.” Finally, on additional cross-motions for summary judgment, the lower court held that the restaurant owner had the right to expand the restaurant without the consent of its landlord. The landlord appealed, arguing that: 1) the restaurant owner did not have standing to make application for a variance, 2) the approval of the variance was arbitrary, capricious or unreasonable, and 3) the lease did not permit the expansion of the restaurant structure without the landlord’s consent. The Court dismissed the standing claim, concluding that the restaurant owner was a “developer” under the Municipal Land Use Law, N.J.S. 40:55D-4, which defines a developer as any “person having an enforceable proprietary interest in such land.” The Court reasoned that the restaurant owner had an interest in the land because it owned the restaurant structure. It recognized that an interest in land “includes improvements and fixtures on, above or below the surface.” Here, the Court concluded that the restaurant was a fixture. Lastly, the Court reviewed the landlord’s argument that the lease prohibited improvements without the landlord’s consent. The Appellate Division concurred with the lower court’s assessment that “taking into account the length of the lease and examining all the provisions in their entirety, it is evident that the tenant may run the business and maintain the property and all alterations however it sees fit, so long as the rent is paid. The building is essentially irrelevant to the landlord.”

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