Court Opinion

ID: 7320533
Source: CourtListenerOpinion
Date Created: 2022-07-25 21:15:43.853608+00
Date Added: 2024-06-11T16:19:50.116063
License: Public Domain

HAVEY, J.A.D.,
concurring and dissenting.
I join in the judgment reversing and remanding this matter to the board of adjustment. However, I dissent from that part of the majority’s opinion which states that “a board may properly decide that a property for which a variance is required has a lower fair market value than if the entitlement to a variance has already been established.” Majority opinion ante at 10.
In Nash v. Board of Adjustment of Tp. of Morris, 96 N.J. 97, 102, 474 A.2d 241 (1984), the Court held that when an applicant satisfies the positive and negative criteria under N.J.S.A. 40:55D-70c, and is thus entitled to a hardship variance, a board may impose a condition to the variance by giving adjoining owners the option to buy the subject property. The narrow question in Nash was what standard applies in determining the property’s fair market value. The Court held that the “proper standard of valuation in deciding the fair price to be offered to an owner to avoid hardship ... is the fair market value of the property assuming that all necessary variances have been granted.” 96 N.J. at 107, 474 A.2d 241. Thus, when the positive and negative criteria are satisfied, and a conditional variance is granted, the adjoining property owners must offer to purchase the subject property for its fair market value, assuming the variance has been granted, to defeat the owner-applicant’s claim of undue hardship.
As I read Nash, the Court accepted the board’s determination that the positive criteria had been satisfied because the nonconforming subject lot was isolated, the nonconformity was not self-created and denial of relief would cause the owner to suffer an “unwarranted loss.” 96 N.J. at 105, 474 A.2d 241. Thus, presumably Nash presupposed that the positive criteria had *457been satisfied because the nonconforming lot was isolated and the hardship was not self-imposed. The Court then spelled out the standard for the granting of a conditional variance. Here, on remand, the Board has available the Nash option to determine first whether the positive and negative criteria are satisfied and, if so, whether to grant the variance conditioned upon the adjoining property owners offering to purchase the property at fair market value as if the variance had been granted.
However, what has evolved in practice before zoning and planning boards is an alternative approach to the isolated lot case. Instead of establishing fair market value for the purpose of granting a conditional variance, the board, in deciding the threshold question of whether undue hardship exists (the positive criterion), considers whether the owner has offered the lot for sale to the adjoining property owners based on the fair market value of the property assuming that all necessary variances have been granted. See Dallmeyer v. Lacey Tp. Bd. of Adjustment, 219 N.J.Super. 134, 139, 529 A.2d 1063 (Law Div.1987); W. Cox, New Jersey Zoning and Land Use Administration § 12-1.3, at 176-78 (1990). If the offer is rejected, “undue hardship” generally exists. See Dallmeyer, 291 N.J.Super. at 139, 529 A.2d 1063.
This approach is entirely consistent with our Supreme Court’s holdings in Commons v. Westwood Zoning Bd. of Adjustment, 81 N.J. 597, 606-08, 410 A.2d 1138 (1980); Chirichello v. Zoning Bd. of Adjustment of Bor. of Monmouth Beach, 78 N.J. 544, 555-56, 397 A.2d 646 (1979), and Gougeon v. Board of Adjustment of Bor. of Stone Harbor, 52 N.J. 212, 222-26, 245 A.2d 7 (1968). For example, in Commons, the Court held that one of the yardsticks by which undue hardship is to be measured is the owner’s willingness to sell the property to adjoining landowners at a “fair and reasonable price” and whether or not the adjoining owners have refused the offer. 81 N.J. at 606, 410 A.2d 1138. This approach is bottomed on the notion that “denial of a variance will zone the property into inutility so that *458‘an exercise of eminent domain [will be] ... called for and compensation must be paid.’ ” Id. at 607, 410 A.2d 1138 (quoting Harrington Glen, Inc. v. Leonia Bd. of Adjustment, 52 N.J. 22, 33, 243 A.2d 233 (1968)). Commons suggested an accommodation between the owner’s property right and the adjoining property owner’s “direct benefit of the land remaining undeveloped” by denying the variance conditioned upon the adjoining owner purchasing the lot “at a fair market value.” 81 N.J. at 607, 410 A.2d 1138. “Undue hardship” would not exist if the adjoining property owners agreed to purchase at such a price. Id. at 607-08, 410 A.2d 1138.
Upon stating this proposition, Commons then clearly sets forth the standard for measuring “fair market value”:
We have referred to the fair market value and the fair and reasonable price of the property with respect to considerations of offers to purchase and sell the property as well as the possibility of conditioning the variance. We believe that the preferred method to determine value is on the assumption that a variance had been granted so that a home could be constructed on the lot
Id. at 608, 410 A.2d 1138 (emphasis added); see also Chirichello, 78 N.J. at 562, 397 A.2d 646 (Pashman, J., concurring) (“fairness” of offer must be gauged in relation to the fair market value of the lot “assuming that the variance has in fact been granted ”). Therefore, whether the Board takes the Nash conditional variance approach, or considers fair market value as part of the threshold undue hardship analysis, as in Commons, the result is the same: fair market value must be measured assuming that the variance has been granted.
The majority appears to retreat from this settled rule. While it acknowledges Nash’s holding that the proper standard of valuation is the fair market value of the property assuming that all necessary variances have been granted, it seizes upon the caveat in Nash that this standard of valuation applies only when the owner has satisfied the positive and negative criteria of the statute. 96 N.J. at 107, 474 A.2d 241. Thus, it concludes that the Commons and Nash standard of valuation only governs the price an adjoining property owner must offer to avoid *459the grant of a variance when the applicant has satisfied both the positive and negative criteria of the statute.
This approach ignores the fact that Nash involved the granting of a conditional variance (where the Court presupposed that the owner had satisfied the positive criteria) and also does not acknowledge the fundamental analysis found in Commons, where the fair market value question is part of the undue hardship equation itself; that is, undue hardship may exist if the owner offers the property at a fair market value assuming the variances have been granted, and the offer is rejected.
Instead, the majority concludes that a board “may properly decide that a property for which a variance is required has a lower fair market value than if the entitlement to a variance has already been established.” Majority opinion ante at 453-54, 592 A.2d at 630. It then suggests “one standard” by which the offer price may be based on the front-foot value of a conforming lot, rather than the fair market value of the lot as if the variances had been granted. Thus, according to the majority, in an isolated lot case the owner will not have demonstrated “undue hardship” if the adjoining property owners offer to purchase the subject lot at a price less than the fair market value assuming that the variances have been granted.
This reasoning is nothing more than a subtle embracement of Justice O’Hem’s dissent in Nash, where he observed: “Thus, if a 200-foot building lot would sell for $30,000, it would appear that a 100-foot building lot should be valued at $15,000 for purposes of variance.”1 96 N.J. at 114, 474 A.2d 241 (O’Hern, J., dissenting). It may be true that a “buildable” nonconform*460ing 100-foot lot has less value than a 200-foot conforming lot. However, reducing its price by one-half, as the majority would have it, ignores the inherent value of an undersized lot once it becomes “buildable” as a result of the grant of the variance. In my view, the value of a “buildable” lot must be fixed by the Board after receiving competent expert testimony, rather than application of a judicially-imposed yardstick predicated solely upon front-foot value. Additionally, we are bound by the holding in Commons as well as the majority opinion in Nash, where the front-foot value approach was expressly rejected. If there is to be a change in the method of valuation in isolated lot cases, it must come from the Supreme Court, and not from us. See Liptak v. Frank, 206 N.J.Super. 336, 339, 502 A.2d 1147 (App.Div.1985), certif. denied, 103 N.J. 471, 511 A.2d 652 (1986). Finally, I concur with the majority’s observation in Nash, that the dissent’s valuation method in that case would vest adjoining property owners and zoning boards with undue power over and discretion as to the value of property.
Accordingly, plaintiff may demonstrate undue hardship if: (1) plaintiff’s contract to purchase is unconditional; (2) the nonconformity of the isolated lot is not self-created; (3) he has offered the lot to adjoining property owners at fair market value assuming that the variance has been granted, and (4) the offer has been rejected. If plaintiff meets these criteria, he must then satisfy the negative criteria under N.J.S.A. 40:55D-70 to be entitled to the hardship variance.

The Nash dissent’s concern about speculators reaping windfalls from the majority’s approach has been addressed in Allen v. Hopewell Tp. Zoning Bd. of Adjustment, 227 N.J.Super. 574, 592, 548 A.2d 220 (App.Div.), certif. denied, 113 N.J. 655, 552 A.2d 177 (1988), where we held that when the contract of sale is conditioned upon the variances being granted, the adjoining property owner conk! defeat the variance by offering the contract price, not the fair market value assuming that the variances were granted.