Real Cases in Real Estate is a weekly update on real estate law, with legal principles illustrated and explained by lawsuits from around the country. The topics are wide-ranging for appeal to a broad spectrum of readers including lawyers, homeowners, investors and the general public. Andrea Lee Negroni, a Washington DC attorney and legal writer with 25 years of experience in financial services and mortgage law, contributes the case summaries.
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Updates for the Week of May 10th, 2013
Denial of a Zoning Variance Application Can Amount to "Confiscation" of Property. Jeffrey Jerman bought an undersized lot in Berkeley Township, New Jersey and sought a zoning variance so he could build a residence on the lot. When he bought it, he knew the lot was smaller than the zoning rules required for homebuilding. The lot was 7500 square feet in an area where R-125 zoning required 12,500 square foot lots for single family homes.
Jerman's neighbors opposed the variance. Two experts testified on Jerman's behalf in favor of the variance. The first, an engineer, said the small lot could support a 3-bedroom home with a garage, and that Jerman's proposed home would fall in the mid-range of homes in the community, which ranged from 1,700 to 3,000 square feet. He also testified that the impact of the proposed variances would be no greater than if the same home were built on a conforming lot. A real estate expert testified that Jerman's proposed home would fit well into the community. Two out of three neighboring property owners rejected Jerman's offer to either buy his lot or sell part of their lots to him. As a result, a title company stated that Jerman's lot qualified as an "isolated lot."
The Berkeley Township zoning board decided Jerman's experts were not credible. They were also unhappy about the fact that Jerman "earns a living applying for variances on isolated lots, and then either builds on the property ... or sell[s] the property to the town at an enhanced price if the variances are not granted." Also, because Jerman knew the lot was undersized when he bought it, the zoning board considered his hardship self-imposed. Jerman's variance application was denied. He appealed and the zoning board was reversed. Then the zoning board appealed.
The court considered whether denial of the variance amounted to confiscation of the premises. The rule of law in New Jersey is that a taking of private property does not require a formal condemnation, but rather, regulation that goes too far will be recognized as a taking. Here, the application of the zoning law denied the owner an economically viable use of his land. Rejection of the variance application "zoned [the] property into idleness." In other words, if Jerman could not build a home there, the property would have no other beneficial use. "Ordinarily restraint upon all practical use ... is spoken of in terms of confiscation."
Jeffrey R. Jerman v. The Zoning Board of Adjustment of the Township of Berkeley, 2013 N.J. Super. Unpub. LEXIS 934 (April 6, 2013). [enhanced version available to lexis.com subscribers].
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