Real Property & Environmental Law Alert : New Jersey, New York, Pennsylvania & Delaware Lawyers & Attorneys for Real Estate Development & Environmental Law

New Jersey case law has consistently held that new or modified development ordinance provisions apply to pending land use applications, even if the proposed zoning was specifically introduced to thwart a pending application. This has historically been known as the "time of decision" rule. On May 5, 2011, the time of decision rule will run out of time.

Recognizing the fundamental chilling impact on developers who commit substantial time and money to a project only to have the rules changed by a municipality after the game has already started, the Legislature amended the Municipal Land Use Law to provide that the development regulations in effect on the date of submission of an application govern the review and decision with respect to that application. This legislation was enacted on May 5, 2010, to become effective one year later in order to give municipalities time to revise and update their ordinances.

Accordingly, for those development applications submitted on or subsequent to May 5, 2011, the time of decision rule will no longer apply. Although municipalities will no longer be able to rezone reactively as a substitute for thorough and comprehensive planning or in reaction to public opposition to the application, the question now will be: Is an application that is deemed "incomplete" sufficiently "submitted" to be protected against changes to a municipality's development ordinance?

Douglas J. Janacek is a Director in the Gibbons Real Property & Environmental Department.

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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.

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