Yale Enterprises, L.L.C. v Euksuzian

 In an unpublished opinion from the Appellate Division, Yale Enterprises, L.L.C. v. Franck and Sarkis Euksuzian, Docket No. A-1224-07T1, the Court dealt with some interesting issues between a landlord and a tenant.

The landlord and tenant entered into a commercial lease in Medford, New Jersey, to commence on October 1, 2002. The landlord was to perform certain interior renovations prior to occupancy. However, the landlord failed to deliver the space and a series of amendments were entered into, each extending the time by which the landlord was required to deliver the space and requiring the landlord to obtain a certificate of occupancy before the tenant was required to take possession of the space. The final amendment required delivery of the space by the landlord by March 1, 2005. However, although the tenant took possession of the space on March 1, 2005, the landlord had still not acquired a certificate of occupancy for the space. Thus, the tenant’s occupancy was illegal. At the time that the tenant occupied the space, it had been evicted from its former space (after having obtained a series of extensions), which explains why the tenant moved into the new space without the certificate of occupancy having been obtained by the landlord. 

Promptly following the tenant’s occupancy, Medford Township issued various citations and levied fines because of the tenant’s occupancy without a certificate of occupancy having been obtained. The tenant expended monies to complete the improvements that should have been performed by the landlord, eventually obtaining a certificate of occupancy. Thereafter, the landlord commenced an eviction action for the failure of the tenant to pay rent. The tenant admitted that it had not paid rent, but brought a counterclaim for the fines and penalties it paid to Medford Township, for unreimbursed costs expended by the tenant for improvements to the space that it made, and for rent paid by the plaintiff to its former landlord as holdover rent that the tenant was forced to pay because of the landlord’s failure to timely deliver the space. The tenant also claimed lost profits. 

 

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Corzine Conditionally Vetoes Senate Bill No. 2577

On Monday, May 4, 2009, Governor Corzine placed a conditional veto on Senate Bill No. 2577, which permits the conversion of age-restricted developments to non-age-restricted developments. 

Under the original bill as approved by both houses of the Legislature, developers would be entitled to convert any age-restricted housing development that has received preliminary and final land use approval to a non-age-restricted development provided that the developer (1) has not accepted any deposits or conveyed any units to buyers under the age-restricted program, and (2) agrees to set aside a percentage of units in the development not to exceed 20% to affordable housing. The bill originally provided the local land use board only the right to review parking standards, recreation and other amenities, water supply and sanitary sewer systems to ensure that those elements were adequate for the amended project.

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Supreme Court Upholds Jackson Township Tree Clearing Ordinance

On May 13th 2009 the New Jersey Supreme Court reversed the Superior Court and Appellate Division and held that the Township of Jackson’s tree removal ordinance is a valid exercise of police power because the details of the ordinance, including the tree replacement fee, the escrow fund, and the planting of trees and shrubs on public property when replanting at the original location is not feasible, are rationally related to the broad environmental goals that inform the ordinance. Rather than a land use regulation the court viewed the ordinance  as enabled under plenary state legislative authority using the  police power, which justifies legislation to further
the public health, safety, welfare, and morals. The Township specifically declared that it was enacting the tree removal ordinance under the police power statute, N.J.S.A. 40:48-2.  The Court distinguished the Ordinance from one enacted under the Municipal land Use Law and held that while the ordinance touches on the use of land, it is not a planning or zoning initiative that implicates the Municipal Land Use Law. As Police-power legislation  the Ordinance must not be unreasonable, arbitrary, or capricious. Additionally, the means must have a real and substantial relation to the object sought to be obtained. Ordinances enacted pursuant to the police power are presumptively valid. Absent a sufficient showing to the contrary, it will be assumed that the legislation rested upon some rational basis within the knowledge and experience of the legislature.generic environmental regulation.

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Tax Appeals - Chapter 91 dismissal sanctions are not an "excessive fine" prohibited by the United States and New Jersey Constitutions

decision (.PDF) today from the New Jersey Appellate Division cemented the long-standing rule of tax appeal law that the failure to timely respond to a municipal tax assessor's request for income and expense information will likely prevent a taxpayer from seeking a reduction of its property assessment.  

Known as a Chapter 91 request, a taxpayer has a mere forty-five days to respond to a tax assessor's request for information (which must be made by certified mail in accordance with the requirements of N.J.S.A. 54:4-34).  Otherwise, the taxpayer risks a motion to dismiss a subsequent year's compliant for failure to timely respond to the Chapter 91 request. To promote timely compliance, the statute imposes an appeal-dismissal sanction upon taxpayers which municipalities are becoming increasing adept at wielding and weeding out the number of tax appeals, which were expected to rise this year. 

In the instant case, the plaintiff taxpayer argued that the fair market value of the subject property was approximately $20,180,000, as opposed to the tax assessment's imputed a fair market value of $29,665,700.   In dollars and cents, this difference of opinion amounted to approximately $192,551.71 of tax dollars in dispute. 

Because the taxpayer here failed to timely file its Chapter 91 response, its Complaint was dismissed by the Tax Court on motion from the municipality.  The Appellate Division was not persuaded by the taxpayer's argument on appeal that the sanction of paying the imposed taxes is an "excessive fine" prohibited by the Eighth Amendment of the United States Constitution and Article I, § 1, ¶ 12 of the New Jersey Constitution.  According to the Appellate Division, the application of N.J.S.A. 54:4-34 did not impose any additional tax upon plaintiff for its failure to comply.

 

 

If you take away anything from this post, remember this.  If you are the owner of an income-producing property, be on the lookout for a Chapter 91 request this summer.  While serving a request is at the tax assessor's discretion, the receiving taxpayer is required to repond, even if the property is "owner-occupied".  The tax assessor will direct the request to the addressee on record.  Forty-five days may sound like a long time, but that is a little over six weeks, and time flies in the summertime.  And if your management office is located outside of New Jersey, by the time the request is routed to the decision-maker, the clock is already ticking. 

 

Legislation in support of Solar and Wind energy

The New Jersey Legislature has passed and is considering a number of bills to promote and facilitate the siting and development of solar and wind energy systems. They are Senate bills 1299, 1303 and 2528. S1299 permits the location of cetain renewable energy facilities in districts zoned for industrial use. A  "renewable energy facility" is a facility that engages in the production of electric energy from solar technologies, photovoltaic technologies, or wind energy. Under the bill which became P.L. 2009 c. 35, a renewable energy facility is a permitted use in all industrial zones in every municipality provided the land consists of at least 20 contiguous acres. S1303 would make wind, solar or photovoltaic energy facilities "inherently beneficial uses". The bill if passed would have the effect of having all renewable energy facilities satisfy the positive criteria for the grant of a variance under N.J.S.A. 40:55D-70 and thereby facilitate such facilities siting and location throughout New Jersey municipalities. S1303 has passed the Senate and has been favorably reported out of committee in the Assembly. S2528 provides for the regulation of small wind energy systems and prohibits municipalities from adopting ordinances or resolutions that unreasonably limit or hinder the installations of such systems. Small wind energy systems are those that generate power that is to be used primarily for on-site consumption.  Prohibitions in the proposed bill include: (i) prohibiting small wind energy systems in all districts; (ii) restricting tower height that does not address the typical tower height required for such systems; (iii) requiring a setback from a property boundary that is greater than 150 percent of the system height; and (iv) setting a noise limit lower than 55 decibels at the site property line. S 2528 was introduced February 2, 2009. These bills demonstrate that our legislature understands the importance of promoting renewable energy and green building initiatives.