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In Victory for Developers, Court Restricts ‘Time of Application Rule’

A New Jersey appeals court ruled on July 27, 2016 that the Time of Application Rule does not apply when a zoning ordinance is amended to permit a use sought in a variance application filed earlier.

The Appellate Division looked at legislative intent in reaching its published decision in Jai Sai Ram, LLC v. The Planning/Zoning Board of the Borough of South Toms River, A-2075-14.

At issue was the time of application rule, N.J.S.A. 40:55-D-10.5, which states that municipal development regulations in place at the time of the application govern its review. Provisions adopted later, except those relating to health and public safety, do not apply.

The case centered on whether the rule applies when a use variance application is filed, and the municipality later amends its zoning ordinance to allow the sought-after use. The court held the rule does not apply in that case, and the developer is entitled to consideration under the ordinance as amended.

Wawa Inc. had sought to build a combined convenience store and gas station on property zoned partly for highway development and partly for residential use in South Toms River. At the time of the application, neither use was permitted at the location.

In addition, the municipality prohibited two principal uses on a single lot.

In January 2014, the Planning/Zoning Board approved Wawa’s application, finding the project constituted one principal use.

The plaintiffs filed a challenge in the Law Division, and the trial court affirmed. The plaintiffs appealed to the Appellate Division.

While that appeal was pending, the municipality amended its ordinance to permit a single-use retail sales and gasoline station run by a single business entity.

Until the time of application rule took effect in 2011, municipalities were governed by the time of decision rule, which allowed them to block proposed developments by changing zoning ordinances while applications were being considered.

The appeals court noted that the clear purpose of the time of application rule was “to assist developers and property owners by obviating the time of decision rule.”

The court said, “The Legislature was concerned about situations in which a developer would spend time and money pursuing an application, only to have the municipality change the zoning to the developer’s detriment while the application was pending.”

It continued, “In this case, while the literal terms of the statute could be construed to prevent a favorable land use amendment from applying to a pending application, that reading would be completely contrary to its purpose.” The court concluded that “the statute does not apply where the local zoning is amended to specifically permit the use which is the subject of a variance application.”

Read the opinion here.

If you have questions about this topic or would like to discuss your land-use law needs, John Wisniewski may be reached at 732-651-0040 or [email protected].

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