Archive for the tag 'Real Estate'

NJ App. Div. addresses exemption under the Highlands Act for grandfathered approvals.

SteveK March 12th, 2013

In a recent decision, Intellect Real Estate Development v. NJDEP, the Appellate Division addressed a provision of the Highlands Water Protection and Planning Act which provides an exemption for permits gaining certain approvals before a specified date.
Intellect Real Estate Development (“Intellect”) is the purchaser and prospective developer of a plot of land in Bloomingdale, New Jersey.  The nature of the intended development required Intellect to submit applications to both DEP and the Bloomingdale Board of Adjustment.  After some disputes between the Board and the municipal council, the proposed development was reduced from an eight-lot subdivision to only five lots, which was approved, but the approval was “expressly subject to and conditioned upon approval . . . by the Highlands Council.”
Simultaneously, Intellect sought DEP approval for its proposed development project.  After several submissions which DEP denied, new stormwater management regulations were enacted resulting in Intellect’s water quality calculations no longer being in conformance.  After Intellect submitted revisions, DEP stated that these new submissions “[met] storm water rules” and were ready for approval, pending certain other formal requirements being met.  At this point, Intellect went ahead with some site preparation on the property, drilling a well and constructing an access road.
On August 10, 2004, the Highlands Water Protection and Planning Act (the “Act”) went into effect.  Shortly thereafter, DEP sent Intellect a letter explaining that, based upon its preliminary review, the new law would affect the pending application.  Intellect was given two options: either resubmit the application “in accordance with the environmental standards contained in the new law,” or submit written documentation that “the proposed activity is exempt under the new law.”  Intellect notified DEP that it would not withdraw its application, and DEP later informed Intellect that its application was cancelled.
The matter was brought before an ALJ, who determined that “the Legislature intended that to be exempt from the [Act], major Highlands developments . . . must have received certain municipal approvals prior to March 29, 2004, regardless of what DEP approvals were applicable to the development,” and so “[Intellect’s] development is not exempt from the regulations imposed by” the Act.  The Commissioner of the DEP adopted the ALJ’s decision, and this appeal followed.
On appeal, Intellect argued for a construction of the Act by which Intellect would be eligible for an exemption on account of its timely-filed FWP application, which “should have been approved” before March 29, 2004, the date used in the Act to accord “grandfathered” status.  DEP, on the other hand, argued that such an exemption was not appropriate because Intellect failed to obtain municipal approvals by the relevant date, and accordingly it was irrelevant whether the FWP application was properly cancelled.
The court first noted that the stated purpose of the Act was to set forth “a comprehensive approach to the protection of the water and other natural resources of the New Jersey Highlands” through adoption of “stringent water and natural resource protection standards, policies, planning and regulation,” as well as “stringent standards governing major development” in the preservation area.  Toward that end, the Act “established a state agency, called the Highlands Protection and Planning Council . . . , which was delegated responsibility for land use planning in the Highlands Region” in various counties in the State.
N.J.S.A. 13:20-28a provides exemptions “from the provisions of th[e] act,” including subsection (3), which “grandfathered” certain developments by way of an exemption with various requirements.  Intellect argued that it was exempt from the Act if its application for a FWP was approved prior to March 29, 2004, regardless of whether it received municipal approvals before that date.  However, it being undisputed that municipal approvals were not received by that date, the court agreed with the DEP.
In reaching that conclusion, the court cited to two prior Appellate Division decisions for the proposition that “in order to qualify for a ‘grandfathered’ exemption, a development must have received a municipal approval under N.J.S.A. 13:20-28a(3)(a) and a DEP approval under either N.J.S.A. 13:20-28a(3)(b) or (c) if applicable, prior to March 29, 2004.”  In Lakeside Manor v. State, Dept. of Envtl. Prot., 421 N.J. Super. 362, 364 (App. Div. 2011), the court noted that the Act “contains a number of exemptions from its regulatory provisions, including one for any major Highlands development project that received one of a specified list of municipal land use approvals under the Municipal Land Use Law . . . and at least one of a specified list of permits issued by the [DEP] before March 29, 2004.”  In OFP, LLC v. State, 395 N.J. Super. 571, 590-91 (App. Div. 2007), the court explained that “N.J.S.A. 13:20-28(a)(3) provides an exemption from the . . . Act for any major development project that received the land use and  environmental permits specified therein on or before March 29, 2004.”
N.J.S.A. 13:20-28a(3)(b) requires that the applicant secure DEP permits in the stated categories, if applicable, and, if those permits were not required, then, under subsection (c), the applicant must secure one of those two listed permits, but only if they are applicable.  Thus, if none of the listed DEP permits applied, the applicant would be eligible for an exemption only if the municipal approvals had been secured prior to March 29, 2004.  The court made note that a developer who secures municipal approval of its project is inured with “important vested rights” under the Municipal Land Use Law, and the above-cited statutory provisions reflect recognition of this fact.  Accordingly, the Legislature intended only projects that received municipal approvals before March 29, 2004 to be eligible for “grandfathering” under the Act.

DiFrancesco, Bateman, Coley, Yospin, Kunzman, Davis, Lehrer & Flaum, PC (www.dbnjlaw.com ) is a full service law firm in New Jersey which provides a broad range of legal services, including the representation of clients in environmental and defense of toxic exposure matters. For additional information about the matters in this bulletin or in the firm’s environmental practice, please contactSteven A. Kunzman, Esq. who heads our Environmental and Latent Injury Litigation Department.

The information contained in this blog is intended solely for informational purposes; it is a advertising publication of DiFrancesco, Bateman, Coley, Yospin, Kunzman, Davis, Lehrer & Flaum P.C.This publication is intended to alert recipients of developments in the law and is not intended to provide legal counsel, advice or opinion on any specific facts or circumstances. The contents are intended as general information only. You are urged to consult a member of this firm or your own attorney concerning your particular situation and any specific legal questions you might have.

 

Tags: , , , , , ,

NJ App. Court Confirms Trigger in Construction Claim

SteveK February 13th, 2013

This declaratory judgment action was brought against Travelers Property and Casualty Company of America (“Travelers”) seeking a declaration that Travelers provided coverage to a subcontractor that allegedly performed negligent work as part of an extensive home improvement project involving construction of an addition, including the excavation of a full basement, construction of footings, foundation, framing, exterior finish, roofing, windows, plumbing and electrical work.  When the contractor sued the homeowners for failure to make payment, the homeowners counter-sued, claiming that they had suffered damages due to defective workmanship.  The contractor in turn sued several of its subcontractors, including Builders of America, Inc. (“BOA”), seeking indemnification and contribution.
Travelers issued a commercial general liability insurance policy to BOA which covered the period during which the construction took place, but which was cancelled effective April 1, 2002, for non-payment.  In response to Travelers’ motion for summary judgment, the plaintiff homeowner submitted a certification in which he stated that, “after the house was completed[,] severe cracking, shifting, and other major deficiencies began to develop.”  The trial judge concluded that there was no evidence the alleged property damage occurred during the Travelers policy period and, therefore, that the policy did not provide coverage to BOA for plaintiffs’ claims.
On appeal, the court noted that there was no question that the policy at issue was an “occurrence” policy, providing coverage for “property damage” claims the insured becomes legally obligated to pay if the damage “is caused by an ‘occurrence’ that takes place . . . during the policy period.”  Citing to clear authority that “[w]hen parties dispute the identity of the operative ‘occurrence’ for purposes of coverage, the actual damage to the party asserting the claim, not the wrongful act that precipitated that damage, triggers the ‘occurrence.’”
Accordingly, the court concluded that “the actual, cognizable damage to plaintiffs’ property occurred after the renovations were completed and the ‘severe cracking, shifting and other major deficiencies began to develop,” which was well after the coverage at issue was cancelled, there was no covered property loss during the policy period and summary judgment was appropriate.

DiFrancesco, Bateman, Coley, Yospin, Kunzman, Davis, Lehrer & Flaum, PC (www.dbnjlaw.com ) is a full service law firm in New Jersey which provides a broad range of legal services, including the representation of clients in insurance coverage matters. For additional information about the matters in this bulletin or in the firm’s insurance practice, please contactSteven A. Kunzman, Esq. who heads our Insurance Coverage Group.

The information contained in this blog is intended solely for informational purposes; it is a advertising publication of DiFrancesco, Bateman, Coley, Yospin, Kunzman, Davis, Lehrer & Flaum P.C.This publication is intended to alert recipients of developments in the law and is not intended to provide legal counsel, advice or opinion on any specific facts or circumstances. The contents are intended as general information only. You are urged to consult a member of this firm or your own attorney concerning your particular situation and any specific legal questions you might have.

 

 

Tags: , , , ,

Contract purchaser cannot file tax appeal

SteveK November 17th, 2012

Presiding Tax Court Judge DeAlmeida rendered a very interesting decision in Omega Storage v Lawrence Township. In this case of first impression, Judge DeAlmeida ruled that a contract purchaser did not have standing to file a tax appeal.
In other words, a party who is the purchaser under a contract of sale of a property which did not close before the filing of the complaint did not have standing to file the complaint and the case was dismissed. In Omega Storage, at the time the Complaint was filed on March 29, 2012, the Plaintiff did not yet own the property and was only a contract purchaser. The Court held that being the contract purchaser was not enough of an interest in the property to file a tax appeal.
This certainly will have an effect upon appeals going forward. I am sure some of you will recollect appeals over the years by contract purchasers who filed petitions or complaints before they owned the property, but, before the hearing or trial acquired at closing the property. Based upon our reading of this new case, these petitioners or plaintiffs cases should be dismissed for lack of standing.
The case can be reviewed in detail at the Tax Court’s web site as follows:

DiFrancesco, Bateman, Coley, Yospin, Kunzman, Davis, Lehrer & Flaum, PC (www.dbnjlaw.com ) is a full service law firm in New Jersey which provides a broad range of legal services, including the representation of clients in real estate tax appeals. For additional information about the matters in this bulletin or in the firm’s real estate tax appeal group, please contact Martin Allen, Esq

The information contained in this blog is intended solely for informational purposes; it is a advertising publication of DiFrancesco, Bateman, Coley, Yospin, Kunzman, Davis, Lehrer & Flaum P.C.This publication is intended to alert recipients of developments in the law and is not intended to provide legal counsel, advice or opinion on any specific facts or circumstances. The contents are intended as general information only. You are urged to consult a member of this firm or your own attorney concerning your particular situation and any specific legal questions you might have.

 

 

Tags: , , ,

Semi Private Golf Course Assessment is Affirmed by Tax Court

SteveK December 29th, 2011

In an recently reported decision the Tax Court affirmed the assessment of a semi private golf course in Gale & Kitson Fredon Golf v Township of Fredon.
Fredon Township conducted a revaluation and the owners of the golf course appealed the new assessment. After trial, the Tax Court, however, did not make a determination of the market value of the golf course. Instead, Judge Vito Bianco held that neither of the parties’ expert appraisers met the burden of proving any adjustment to the assessment at issue was warranted. Stated another way, Judge Bianco found deficiencies in both appraisers opinions to the point of not being able to arrive at anything other than the existing presumed valid assessment.
The taxpayer’s expert used the income capitalization approach in valuing the property. The Court found numerous deficiencies in the development of the capitalization rate. But, more importantly, Judge Bianco held that the cost approach was a more appropriate valuation method than the income capitalization approach for a semi private golf course.
The revaluation firm was the appraisal expert for Fredon and used the cost approach. However, the Court found deficiencies in the land sales used by their appraiser. The Court criticized the use of deed restricted land sales to public and not for profit entities, and held in part that these comparable properties were therefore not of the same highest and best use as the subject golf course.
As stated at the outset, this case is unreported and of limited precedential value. That being said, we have little in the way of any Tax Court decisions on valuing golf course properties. We are also awaiting a decision on another golf course case from Presiding Judge DeAlmeida. It will be interesting to see if Judge DeAlmeida agrees with Judge Bianco’s analysis that the cost approach is the correct valuation method in that golf course case.

DiFrancesco, Bateman, Coley, Yospin, Kunzman, Davis, Lehrer & Flaum, PC (www.dbnjlaw.com ) is a full service law firm in New Jersey which provides a broad range of legal services, including the representation of clients in real estate tax appeals. For additional information about the matters in this bulletin or in the firm’s real estate tax appeal group, please contact Martin Allen, Esq

The information contained in this blog is intended solely for informational purposes; it is a advertising publication of DiFrancesco, Bateman, Coley, Yospin, Kunzman, Davis, Lehrer & Flaum P.C.This publication is intended to alert recipients of developments in the law and is not intended to provide legal counsel, advice or opinion on any specific facts or circumstances. The contents are intended as general information only. You are urged to consult a member of this firm or your own attorney concerning your particular situation and any specific legal questions you might have.

 

Tags: , , , ,

Two Family Homes and Seasonal Rentals No Longer Considered to be Bulk Sales Transactions

SteveK October 24th, 2011

As a result of a recent legislative amendment, the New Jersey Bulk Sales Act (the Act) provisions, as they relate to real estate, are a lot clearer.  Prior to the amendment, there was some uncertainty as to whether or not the Act applied to certain types of residential real estate.

 

In 2007, the notification requirements under the Act were changed, which resulted in the application of such requirements to a wider array of real estate transactions and, thus, a lot of uncertainty as to what was covered and required of real estate attorneys and other professionals.  Basically, under the 2007 law, the notification requirements applied to all transactions in which there was a sale, in bulk, of all or any part of a person’s business assets, except in the ordinary course of business.

 

For purposes of the 2007 law, “business” meant any endeavor from which revenue is realized for the purposes of generating a profit or a loss, and “business assets” included realty if the primary use of the realty is to support a business on its premises.  On its face, without any other clarification, the 2007 law had to be presumed to include any real estate transaction where the purpose of the real property was to support a business of any type from which a profit or loss could be obtained and for which the sale is not in the ordinary course of business.  This would likely encompass sales by single purpose entities where the sole asset is the subject property and the sole business is the leasing, operation or management of that property.  However, it could also be deemed to include any   other real estate transactions such as seasonal rentals, vacation homes, and timeshares.

 

Consequently, other than the sales of single family residences by the owners thereof, it was unclear whether or not sellers of real estate in New Jersey had to comply with the notification requirements under the Bulk Sales Act.  The uncertainty was risky, too, because the failure by the purchaser to file the requisite notices with the Division of Taxation meant that the purchaser was deemed, by statute, to have personally assumed all liability for the payment of the seller’s outstanding tax obligations to the State of New Jersey.

 

A recent amendment now resolves that uncertainty.  According to the revised  legislation, the Bulk Sales Act does not apply to the sale, transfer or assignment of a simple dwelling house if the seller, transferor or assignor is an individual, estate or trust, but it does still apply if the seller, transferor or assignor is a business entity, including a corporation or a partnership.  A “simple dwelling house” means a dwelling unit, attached or detached, and the land appurtenant thereto, including but not limited to (1) a one-family or two-family building or structure, (2) a cooperative unit, (3) a condominium unit, and (4) a unit in a horizontal property regime, but it does not include a structure containing more than two units of dwelling space or containing commercial property including, or in addition to, the units of dwelling space.

 

In addition, the Act does not apply to the sale, transfer or assignment of a seasonal rental unit or the sale, transfer or assignment of a lease for the seasonal use or rental of real property if the seller, transferor or assignor is an individual, estate or trust, but it does still apply if the seller, transferor or assignor is a business entity, including a corporation or a partnership.  A “seasonal rental unit” means a timeshare estate and a dwelling unit that is rented for a term of not more than 125 consecutive days for residential purposes by a person having a permanent residence elsewhere.  A “lease for the seasonal use or rental of real property” means a timeshare use and the use or rental for a term of not more than 125 consecutive days for residential purposes by a person having a permanent place of residence elsewhere.

 

In short, limited liability companies and other similar entities are still subject to the bulk sales notice requirements, as are all owners of multiple (more than two) dwelling properties and properties containing commercial units.  However, individuals, trusts and estates are not subject to the bulk sales requirements, if the property in question is a single-family of two-family residence, a coop or condo unit, a timeshare, or a seasonal rental unit.

 

Although this amendment clarifies the applicability of the Bulk Sales Act to certain real estate transactions, it remains important to review any sale of this nature with your counsel.

 

DiFrancesco, Bateman, Coley, Yospin, Kunzman, Davis & Lehrer, PC (www.dbnjlaw.com ) is a full service law firm in New Jersey which provides a broad range of legal services, including the representation of clients in real estate transactions. For additional information about the matters in this bulletin or in the firm’s real estate group, please contact Richard Ahsler, Esq.

 

The information contained in this blog is intended solely for informational purposes; it is a advertising publication of DiFrancesco, Bateman, Coley, Yospin, Kunzman, Davis, Lehrer & Flaum P.C.This publication is intended to alert recipients of developments in the law and is not intended to provide legal counsel, advice or opinion on any specific facts or circumstances. The contents are intended as general information only. You are urged to consult a member of this firm or your own attorney concerning your particular situation and any specific legal questions you might have.

 

Tags: , , ,