Development Regulations in New Jersey to be Locked in Upon Filing of Application: Time of Decision Rule Abolished
An amendment to the Municipal Land Use Law (MLUL) which Governor Christie signed into law on May 4, 2010, will protect developers from municipal zone changes that are rushed through, often as a result of public opposition, to thwart a specific development proposal. Under the new law, which takes effect in one year, the development regulations which apply to a project would be those in effect on the date the application is filed with the municipal land use board.
The new law, dubbed the "time of application" rule, was needed to undo the much-criticized "time of decision" rule under which the New Jersey Supreme Court, in Manalapan Realty v. Township Committee, 140 N.J. 366 (1995), decided that a municipality could change its zoning to negatively affect a project which was already under review by the municipal planning board. That decision involved a proposed Home Depot, which met with substantial public opposition. After the applicant spent significant sums of money acquiring an interest in the property, preparing development plans, retaining experts, submitting its development application, and participating in a number of public hearings, opponents of the project were successful in electing a new township council. The newly constituted council immediately enacted a zoning amendment specifically targeted at Home Depot, as a result of which it was no longer permitted in the zone. The case ultimately reached the New Jersey Supreme Court, which found this sequence of events to be perfectly appropriate.
As a result, some municipalities have become adept at using the ability to rezone reactively as a substitute for thorough and comprehensive planning. Meanwhile, developers have been stymied in many instances despite proposing a project which the development regulations allowed at the time the developer submitted its application.
The new law, S-82, approved as P.L. 2010, Chapter 9, attempts to strike a balance by giving municipalities a year to revise and update their development regulations, and thereafter according developers the ability to rely on those development regulations without fear of an unexpected zoning amendment if opposition develops to their proposal. Its enactment follows a number of unsuccessful efforts in recent legislative sessions to enact a "time of application" rule.
Howard D. Geneslaw is a Director in the Gibbons Real Property & Environmental Department.