Posted by: Patricia Salkin | September 13, 2010

NJ Appeals Court Finds Seller Has Standing to Bring Challenge to Use Variance Denial Where Sale was Conditioned on Variance to Allow for Low Income Housing

Contract purchaser Richman Group entered into contract with Campus Associates to purchase their property to construct affordable housing units for a low income housing tax credit program.  Terms of the contract provided that Richman would purchase the property after they applied for, and were granted, the development approval.  The Zoning Board of Adjustment of Hillsborough denied Richman’s application for a use variance because the proposal only included moderate income housing, and no low income housing.                 

Plaintiff Campus Associates challenged the Board’s denial. The trial court dismissed due to lack of standing, holding that the board’s decision only pertained to the Richman Group, and did not cause damage or prevent plaintiff from pursuing application with another company or on its own.  Plaintiff moved for reconsideration, asserting that it had standing as representative of the 84 low income households that would benefit from the project and the increase in property value, and that pursuing another application would mean incurring substantial expense, delaying or forbidding the project from happening at all. The trial court denied the motion, and Plaintiff appealed contending it had standing to pursue the case, that the trial court erred by failing to permit plaintiff to amend its complaint or applying summary judgment standard, and that the court relied on inapplicable case law.  

The Superior Court, Appellate Division held plaintiff Campus Associates did have standing to challenge the board’s decision denying the special use variance, because a variance is a right that attaches itself to the land, giving benefits to successive owners, and thus directly affects plaintiffs.  The variance, if it had been granted, would have benefitted the property because it allowed plaintiff or its successors to construct the affordable housing.  Denying the variance denied the plaintiff the benefit of developing the housing with Richman or any other developer.  The Court found that whether the plaintiff or Richman received the federal tax credit was not a relevant factor in the Board’s decision and that the project satisfied the positive criteria as an inherently beneficial use.  Lastly, the court noted plaintiff could be barred from starting the application process and appealing an adverse decision in its own right by the doctrine of res judicata.  Therefore the matter was reversed and remanded to the Law Division, and since plaintiff did in fact have standing, they were permitted to amend their complaint.  

Campus Associates v. Zoning Board of Adjustment of Township of Hillsborough, 413 N.J. Super. 527 (NJ Superior Court 6/4/10) 

The opinion can be accessed here.

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