SYLLABUS
(This syllabus is not part of the opinion of the Court. It has
been prepared by the Office of the Clerk for the convenience of the
reader. It has been neither reviewed nor approved by the Supreme Court. Please
note that, in the interests of brevity, portions of any opinion may not
have been summarized).
Argued March 15, 2005 – August 4, 2005
LONG, J., writing for a unanimous Court.
In this case involving an application under N.J.S.A. 40:55D-70(c)(1) for variances to develop an isolated undersized lot, the Court determines the scope of the merger doctrine enunciated in Loechner v. Campoli, 49 N.J. 504 (1967), whether a Loechner merger occurred in this case, and whether the conduct of the owners, past or present, resulted in a self-created hardship that disqualifies the present owner from seeking a hardship variance.
In 1939, when Wall Township had no zoning ordinance, members of the Mauger family divided an 85-acre tract of land into lots. The four lots at issue in this case, Lots 25, 26, 27, and 28, were conveyed to various individuals in 1939, who in turn conveyed them to other individuals over several years. Residences were built on Lots 25, 26, and 28. In 1955, the four lots became non-conforming with the adoption of a zoning ordinance requiring minimum dimensions. The ordinance made an exception for preexisting non-conforming lots "provided the owner owns no adjacent land which may, without undue hardship to him, be included as part of the plot in question."
In 1957, Lot 26 was conveyed to J. Clarence and Ethel Allen. The Shermans owned Lots 25 and 27. A year or two after the Allens moved into the house on Lot 26, they purchased from the Shermans a twenty-foot strip of Lot 25, which the planning board approved, to add to Lot 26 so that its side yard requirements conformed to the 1955 zoning ordinance. The planning board's approval was conditioned on the zoning board granting a variance to allow a five-foot side-yard setback on Lot 27, in exchange for the Allens' grant to the township of a drainage easement across the twenty-foot strip of land that had been added to Lot 26.
During this time, the Allens also purchased Lot 27. At closing, the Allens
directed that Lot 27 be placed in their son Robert's name. The property
was recorded as sold to Robert. In 1974, Robert agreed to give his
brother, Raymond, a half-interest in the vacant lot and that conveyance was recorded.
Over the years, with the knowledge and approval of the sons, the elder
Allens used Lot 27 for various purposes, including the construction of a storage
shed, built by Clarence, Robert and Raymond. Clarence also fenced Lot 26 and
27, planted a garden on Lot 27 and dug a well on Lot
27 to provide water to both lots. He also paid the taxes on
Lot 27. Raymond and Robert took care of the upkeep on Lot 27,
however, including brush clearing and mowing, and considered themselves the owners.
In 1989, the Allens and their sons listed the lots separately for
sale. In 1990-1991, defendant Paul Amato became aware that the lots were for
sale and contacted the zoning officer for Wall Township to inquire whether Lots
26 and 27 had merged. In April 1991, the zoning officer sent Amato
a letter that, in short, advised that the lots had not merged because
they were under separate ownership, therefore a re-subdivision would not be necessary. Amato
also obtained from the zoning officer information about setbacks on Lot 27 that
had been granted by the board in 1959 and determined that they were
still in effect. Amato subsequently made a separate offer on each lot, which
the Allens and their sons accepted. Although Paul Amato was listed as the
buyer on the separate contracts, each contract reserved the right for Amato to
assign it to another entity. Amato assigned his rights to Lot 27 to
Shire Realty, Inc., a corporation in which he is a 50% shareholder. In
January 1992, title to each lot was transferred—Lot 26 from the elder Allens
to Amato, and Lot 27 from Robert and Raymond to Shire. The sons
split the proceeds from Lot 27.
Amato immediately placed Lot 26 back on the market. Shire then applied
to the zoning board for permission to construct a house on Lot 27.
Amato was a member of the board and appeared at the hearing on
behalf of Shire. Despite opposition, the board approved the variance application. The owners
of Lot 28, later joined by the new owners of Lot 26 (Adjoining
Lot Owners), filed a complaint seeking reversal of the variance approval. The Adjoining
Lot Owners then moved for summary judgment, arguing that Amato had a conflict
of interest because he was a member of the board, that Lots 26
and 27 had merged under the Allens' ownership as a matter of law,
and that any hardship was self-created, thus precluding the grant of a variance.
The motion for summary judgment was denied. The Appellate Division reversed on the
ground that Amato's appearance before the board on behalf of Shire was an
impermissible conflict of interest. The panel did not reach the issue of merger.
In July 1997, Shire filed a new application with the board, requesting
approval to build a house on Lot 27. The board determined that the
two lots were in separate ownership and never merged as of the time
that Amato and Shire purchased them, and that the lots did not merge
under Amato and Shire, who were separate entities. The board also determined that
Shire's hardship was not self-created and that there was no available land that
Shire could have purchased to increase the size of Lot 27 because Lot
26 was also undersized and because of the proximity of the house on
Lot 28 to the Lot 27 property line. Moreover, the board determined that
the neighbors were not interested in purchasing Lot 27 at fair market value.
The board granted the requested variances, finding an undue hardship due to the
undersized nature of the lot and finding further that the grant of the
variance would not be a substantial detriment to the public good or substantially
impair the purpose of the zone plan and zoning ordinance.
The Adjoining Lot Owners filed a complaint on April 26, 2001, seeking
vacation of the board's decision and arguing that Lots 26 and 27 had
merged as a matter of law. The trial judge disagreed, affirming the board's
determination that the lots had not merged under the Allens or under Amato
and Shire and rejecting the argument regarding "constructive merger." The trial judge concluded
also that Lot 27 is non-conforming as a result of a zoning change,
and not through any action by Shire or its predecessor in title. The
judge also took into account Shire's efforts to sell Lot 27 to the
Adjoining Lot Owners at fair market value. Finally, the judge affirmed the zoning
board's finding that Shire had satisfied the positive and negative criteria in N.J.S.A.
40:55D-70.
The Appellate Division reversed.
371 N.J. Super. 547 (2004). The panel concluded
that where one party exercises dominion and control over the contiguous non-conforming lot
of another or where the property is in equitable or constructive ownership, a
Loechner merger occurs. The panel found those requirements met by the Allens and
by Amato and Shire. The panel also determined that the efforts of the
Allens and Shire to avoid merger rendered the isolation of the non-conforming lot
a self-created hardship.
HELD : Because the adjacent lots in this case were always titled in legally
separate parties, no merger of the lots occurred pursuant to Loechner v. Campoli,
49 N.J. 504 (1967). Further, neither the predecessors in title nor the current
owner created the hardship on the lot proposed for development, therefore a hardship
variance was not precluded.
1. The term "merger" is used to describe the combination of two or
more contiguous lots of substandard size that are held in common ownership in
order to meet the requirements of a zoning regulation. If merger has occurred,
subdivision approval is required prior to consideration of a variance application. A Loechner
merger takes place as a matter of law where adjacent substandard lots come
into common legal title. In Loechner, the plaintiff and her husband owned three
adjoining lots as tenants by the entirety, and the husband subsequently acquired two
more adjoining lots in his own name. After her husband died, the plaintiff
became the sole owner of the five adjoining lots. Interpreting the statutory provision
that defines a subdivision, this Court rejected an argument that the plaintiff did
not need subdivision approval to convey two of the adjacent, substandard lots because
the lots were delineated under the Old Map Act. The Loechner Court determined
that the two lots were part of a larger tract or parcel that
the plaintiff owned, and that reduction in the size of a parcel or
tract of land by a division into two or more smaller parcels is
a subdivision. Here, however, the planning board granted in 1959 the Sherman's subdivision
application for approval to sever a 20 foot strip from Lot 25 and
create a more conforming Lot 26 conditioned on the Allens granting the town
a drainage easement and the zoning board, in turn, granting the Allens a
side yard setback variance on Lot 27. Once a lot has been created
by a planning board pursuant to subdivision approval, it is exempt from the
merger doctrine. Therefore, the board's actions in 1959 insulated Lot 26 from Loechner
merger with Lot 27. (Pp. 15—25).
2. The Court reverses the Appellate Division's conclusion that Lots 26 and 27
merged when they were titled in the senior and junior Allens. Loechner requires
identity of title. Neither related ownership nor dominion and control are at issue.
As such, the rule is simple, requiring only a title search, and it
results in uniformity and predictability of outcome. To import into the merger doctrine
a conduct analysis would require land use authorities to determine the historical relationship
between and the conduct of adjoining property owners toward each other and toward
the land. That same onus would fall on all purchasers of undersized lots,
in contravention of the accepted principle that a purchaser should be able to
rely on record title. The result would be a proliferation of merger litigation
with complex proof problems and the loss of simplicity, uniformity and predictability. (Pp.
25—28).
3. The Court also reverses the Appellate Division's conclusion that the contracts of
sale to Amato operated to transfer title to him on an equitable conversion
basis, thereby resulting in merger. Equitable conversion is invoked to give effect to
the mutual intent of the parties. Importantly, the doctrine does not effect a
transfer of legal title. The contracts at issue here do not suggest that
the parties expected, intended or even imagined that they would eliminate the separate
legal titles in which the properties had been held up to that point.
There is nothing about the contracts for Lots 26 and 27 that would
warrant application of the doctrine of equitable conversion. Nor did merger occur when
Amato and Shire took title to Lots 26 and 27. Even if Amato
and his wife, as sole owners of Shire Realty, were viewed as the
actual owners of Lot 27, Amato alone owned Lot 26. In Loechner, this
Court did not find that merger had occurred until Mrs. Loechner alone had
legal title to all of the lots. (Pp. 28—32).
4. The Court further rejects the claim that the hardship in this case
was self-created by Shire or a predecessor in title, thus barring the right
to a hardship variance pursuant to N.J.S.A. 40:55D-70(c)(1). Undue hardship refers solely to
the particular physical condition of the property, not personal hardship to its owner,
financial or otherwise. A self-created hardship requires an affirmative action by the landowner
or a predecessor in title that brings an otherwise conforming property into non-conformity.
Here, when Lot 27 was created in 1939, it complied with then existing
zoning laws. The hardship associated with it was created in 1955 when the
zoning ordinance was changed. Thus, when Lot 27 was purchased by Robert Allen,
and later by Shire Realty, it was already non-conforming. Furthermore, by taking Lots
26 and 27 in separate titles, the Allens and later Amato and Shire
did nothing to create or enhance the hardship connected with the lots. Purchasing
and keeping property in diverse ownership to preserve a zoning advantage is as
acceptable in purpose as tax and estate planning to avoid or reduce the
payment of taxes. The evidence also does not reveal that the actions of
the elder Allens obliterated the division between the lots such that the sale
of the individual lots was a disqualifying self-created hardship. (Pp. 32—38).
5. Finally, an attempt made by a party to bring a property into
conformity by purchase from or sale to adjoining owners is a factor for
consideration, even where the non-conforming status of the property was originally created through
no fault of the then owner or his predecessor. A board, in its
discretion, may recognize an offer to sell or purchase the land of an
adjoining property owner by conditioning the grant of a variance thereon. Alternatively, the
board may consider 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. Here, Shire offered Lot 27
to both adjoining owners at fair market value, but they declined. The record
in this matter supports the board's action in determining that Shire qualified for
consideration for a hardship variance. (Pp. 38—44).
The judgment of the Appellate Division is REVERSED and the matter is
REMANDED to the Appellate Division for consideration of the specific variance issues raised
by plaintiffs that were not addressed below.
CHIEF JUSTICE PORITZ and JUSTICES LaVECCHIA, ZAZZALI, ALBIN, WALLACE, and RIVERA-SOTO join in
JUSTICE LONG's opinion.
SUPREME COURT OF NEW JERSEY
A-
72 September Term 2004
GUNTHER JOCK, SHERRY OBERG, SANDRA BARRE and GEORGE SOLLAMI,
Plaintiffs-Respondents,
v.
ZONING BOARD OF ADJUSTMENT OF THE TOWNSHIP OF WALL,
Defendant-Respondent,
and
TOWNSHIP COMMITTEE OF THE TOWNSHIP OF WALL,
Defendant,
and
PAUL AMATO, JOYCE AMATO and
SHIRE REALTY, INC.,
Defendants-Appellants.
Argued March 15, 2005 – Decided August 4, 2005
On certification to the Superior Court, Appellate Division, whose opinion is reported at
371 N.J. Super. 547 (2004).
Timothy B. Middleton argued the cause for appellants.
Thomas J. Hirsch argued the cause for respondent Zoning Board of Adjustment of
the Township of Wall.
Walter R. Bliss, Jr., argued the cause for respondents Gunther Jock, Sherry Oberg,
Sandra Barre and George Sollami.
JUSTICE LONG delivered the opinion of the Court.
In this land-use case, involving an application under N.J.S.A. 40:55D-70(c)(1) for bulk and
dimensional variances to develop an isolated undersized lot, we are called upon to
address the separate but related issues of merger and self-created hardship. More particularly,
we have been asked to determine the scope of the merger doctrine enunciated
almost forty years ago in Loechner v. Campoli,
49 N.J. 504 (1967). There
we held that, despite separate designations on an old tax map, adjacent undersized
lots in common title should be considered part of a larger tract or
parcel for zoning purposes. The Appellate Division here ruled that Loechner does not
require commonality of legal title and that merger can be compelled based on
the conduct of a property owner in respect of an adjacent owner’s lot
or based on “equitable ownership” of separately titled property. We disagree. Loechner established
a bright-line rule that applies only to properties in the same title ownership.
Because the adjacent lots in this case were always titled in legally separate
parties, no Loechner merger occurred.
We likewise conclude that the notion of self-created hardship requires an affirmative act
that transforms a conforming property into one that is non-conforming. Although an applicant’s
failure to take steps to bring non-conforming property into compliance is one consideration
for determining the existence of hardship, it is not a disqualifying self-created hardship.
I
The established facts are as follows: In 1939, at a time when Wall
Township had no zoning ordinance, members of the Mauger family divided an 85
acre tract of land fronting on Bass Point Road and abutting the Manasquan
River into individual lots. Among them were Lots designated 25, 26, 27 and
28, all of which are implicated, to some extent, in this case. Residences
were built on Lots 25, 26 and 28 prior to the enactment of
a zoning ordinance. (All of those lots are undersized and non-conforming.) Lot 27
is vacant and wooded. Lots 26 and 27 are the primary focus of
this case.
Lot 26 was created when it was conveyed from Ida B. and Charles
B. Mauger to Kenneth L. and Jeanette Barre Thomson by a deed recorded
on May 19, 1939. In turn, the Thomsons conveyed the property, by recorded
deed, to Harry H. and Elizabeth L. Halsted in 1945, and the Halsteds
conveyed it by recorded deed to Thomas W. and Hope D. Mason in
1946. Lot 27 also was created in 1939 when it was conveyed by
recorded deed from Ida B. Mauger, individually, to Wilfred F. and Laura Lee
Sherman, who also owned Lot 25.
The lots became non-conforming in 1955 upon the adoption of a zoning ordinance
requiring a minimum lot area of one acre, a minimum width of 200
feet, a fifty-foot front yard setback and twenty-foot side and rear yard setbacks.
The 1955 zoning ordinance made specific exception for preexisting non-conforming lots “provided the
owner owns no adjacent land which may, without undue hardship to him, be
included as part of the plot in question.”
In 1957, the Masons conveyed Lot 26 to J. Clarence and Ethel M.
Allen by recorded deed. Wilfred and Laura Lee Sherman still owned Lots 25
and 27 when the Allens purchased Lot 26. Shortly thereafter, the Shermans conveyed
Lot 27, along with Lot 25, to their son, Donald Lee Sherman by
deed recorded on Nov 15, 1957. Wilfred and Laura Lee Sherman retained the
right to live on Lot 25 for the remainder of their lives.
A year or two after moving into the house located on Lot 26,
Clarence Allen approached Wilfred Sherman about acquiring a twenty-foot strip of property from
Lot 25 to add to Lot 26 to make it conform to the
twenty-foot side yard requirements in the 1955 Ordinance. Wilfred Sherman set a price
of $2,000 for the twenty-foot strip. During the course of those negotiations, Allen
also agreed to purchase Lot 27, at a total cost of $8,000 for
both properties.
Thereafter, the Shermans applied to the planning board for approval to subdivide Lot
25 to provide the twenty-foot strip to the Allens to add to Lot
26. The planning board approved the subdivision in 1959. The approval was conditioned
on the zoning board granting a variance to allow a five-foot side-yard setback
on Lot 27, in exchange for the Allens’ grant to the township of
a drainage easement across the twenty-foot strip of land that had been added
to Lot 26.
At closing, the Allens directed that Lot 27 be placed in their son
Robert’s name. On January 27, 1960, the property was recorded as sold to
Robert M. Allen. At his deposition, Clarence testified that the lot was a
gift to his son, and that at the same time, he had set
up a bank account for his other son, Raymond, that contained an amount
equal to the value of the lot. Clarence intended to increase the bank
account in proportion to escalating real estate prices. However, prices eventually skyrocketed and
he was unable to match the value of Lot 27. When that occurred,
Clarence asked Robert to give Raymond a half-interest in the vacant lot. Presumably
the bank account was to be shared equally as well. Robert willingly agreed
and on December 3, 1974, a half-interest in Lot 27 was recorded as
having been conveyed to Raymond.
Over the years and with the knowledge and approval of his sons, Clarence
used Lot 27 for various purposes. In 1960 he built a tool shed
and ran electricity from his house to the shed. The shed held Clarence’s
tools along with certain equipment purchased by all the neighbors for the neighborhood’s
use. Clarence paid for the shed building materials, but in his deposition, Raymond
testified that he and Robert actually built the shed with their father as
a family project. Subsequently, Clarence enclosed both lots with a fence so that
his dog would have a larger space in which to run. He also
put a gate at the Lot 28 side of the property so that
the residents of Lot 28 could use Lot 27 for walks if they
wished. Clarence planted a vegetable garden on Lot 27 and paid to install
a bulkhead along both lots. In addition, in 1987, he dug a well
on Lot 27 and placed a pump in the tool house to provide
water to both lots. He also paid the taxes on Lot 27.
Raymond testified that he and his brother, who did not live in the
area, had taken care of the upkeep on Lot 27. During visits home,
he and Robert would clean up the brush, mow the lawn, and keep
the honeysuckle from growing wild. He asserted that his father discussed all measures
regarding the lot with him and that he and his brother were happy
with the fact that their father was keeping himself busy with projects on
their property. Robert and Raymond considered themselves the owners of Lot 27.
In 1989, the elder Allens (who were in their 80s) told their sons
that they wished to move away and suggested the possibility of selling both
properties. The sons apparently had no desire to build on Lot 27 and,
after a family discussion, it “was mutually agreed that selling was the best
thing to do.” In July of 1989, the lots were listed separately for
sale with Barrie Riddle of the Folk Real Estate Agency. Although the elder
Allens signed both agreements, Riddle testified unequivocally in depositions that she was always
aware that Raymond and Robert were the owners of Lot 27. Riddle stated
that, in addition to her communications with the elder Allens, who were accessible
because they lived nearby, “anytime anything would come up on the properties, I
would speak with Robert.” Moreover, she indicated that, from her dealings with the
family, she believed that the elder Allens were discussing all matters with their
sons and that the entire family needed to approve of any sale of
the properties.
During the winter of 1990-1991, defendant Paul Amato became aware that Lots 26
and 27 were for sale. Apparently because of the senior Allens’ name on
the sales agreement and because he knew that undersized lots in single ownership
could be considered merged, Amato contacted John Hoffman, the zoning officer for Wall
Township, and asked if Lots 26 and 27 had merged. On April 18,
1991, Hoffman sent Amato a letter stating that in 1950, there had been
a subdivision of Lot 25, creating new Lots 25 and 26 and 26A.
See footnote 1
The letter stated further that:
Lot 26 is currently owned by Ethel and Clarence Allen and Lot 27
is owned by Raymond and Robert Allen. Since the lots are under separate
ownership, there was no merger of the two and a re-subdivision would not
be necessary.
In October of that year, Amato obtained another opinion letter from Hoffman stating
that the 5 foot side-yard setbacks on Lot 27, granted by the board
in 1959 were still in effect. Amato subsequently made an offer to purchase
Lot 26 for $400,000 and Lot 27 for $l00,000 without any contingencies.
The Allens’ attorney prepared separate contracts for the sale of each lot. Clarence
and Ethel were the sellers of Lot 26, and Robert and Raymond of
Lot 27. Each contract listed Paul Amato as the buyer and contained a
provision stating:
The buyer [Amato] has the right to assign this contract or take title
in the name of some other entity in which he has a controlling
interest upon the express agreement that he shall continue to remain responsible for
the obligations set forth in this agreement and will personally execute the note
and note mortgage referred to herein.
In accordance with that provision, Amato assigned his rights to Lot 27 to
Shire Realty, Inc., a corporation in which he is a 50% shareholder. On
January 6, 1992, Clarence and Ethel Allen transferred the title to Lot 26
to Amato for $400,000, and Robert and Raymond Allen transferred the title to
Lot 27 to Shire Realty for $100,000. Robert and Raymond split the proceeds
from the sale of Lot 27.
Amato immediately placed Lot 26 back on the market. Shire then applied to
the zoning board for permission to construct a house on Lot 27. Amato
was a member of the board at the time.
In late January 1992, Sandra Barre and George Sollami, potential buyers, who had
been made aware of the Hoffman letters and of Shire’s variance application to
build on Lot 27, contracted to purchase Lot 26 for $412,500.
In April and May of 1992, the zoning board held hearings on Shire’s
application. Amato made the presentation to the board. Sherry Oberg, who with Gunther
Jock, is the owner of Lot 28, appeared at both hearings and testified
in opposition to the application. At the May 20 hearing, the board approved
the variance application. On June 15, 1992, Barre and Sollami closed title on
Lot 26.
Jock and Oberg filed a complaint in lieu of prerogative writs in the
Superior Court of Monmouth County seeking reversal of the variance approval. After some
procedural maneuvering that need not be recounted here, the lawsuit was pursued by
Jock, Oberg, Barre and Sollami (collectively plaintiffs). Plaintiffs filed a motion for summary
judgment, arguing that Amato had a conflict of interest because he was a
member of the board, that Lots 26 and 27 had merged under the
Allens’ ownership as a matter of law, and that any hardship was self-created
by Amato, thus precluding the grant of a variance.
The motion for summary judgment was denied and plaintiffs appealed. The Appellate Division
reversed on the ground that Amato’s appearance before the board on behalf of
Shire was an impermissible conflict of interest. The panel did not reach the
issue of merger.
On July 21, 1997, Shire filed a new application with the board, requesting
approval to construct a single-family house on Lot 27. The board conducted a
series of hearings to determine whether merger had occurred. It concluded that, despite
some use by the elder Allens of their sons’ property, with the sons’
approval, the two lots were in separate ownership and thus had never merged
as of the time that Amato and Shire purchased them. Further, the board
determined that the lots did not merge under Amato and Shire, who were
separate entities.
Hearings to decide the merits of the variance application were then held. After
twenty-seven days, the board determined that Shire’s hardship was not self-created. Furthermore, in
terms of Shire’s attempts to bring the property into conformity, the board concluded
there was no available land that Shire could have purchased to increase the
size of Lot 27 because Lot 26 was also undersized and because of
the proximity of the house on Lot 28 to the Lot 27 property
line. Moreover, the board found that the neighboring property owners were not interested
in purchasing lot 27 at fair market value.
See footnote 2
The board concluded that the standards for a (c)(1) variance had been established.
Specifically, the board found undue hardship due to the undersized nature of the
lot (positive criteria) and that the grant of the variance would not be
a substantial detriment to the public good or substantially impair the purpose of
the zone plan and zoning ordinance (negative criteria). Accordingly, it went on to
grant specific variances.
See footnote 3
On April 26, 2001, plaintiffs filed a complaint in lieu of prerogative writs
seeking vacation of the board’s decision and arguing that Lots 26 and 27
had merged as a matter of law. The trial judge disagreed, affirming the
board’s factual finding that the lots had not merged under the Allens or
under Amato and Shire and rejecting plaintiffs’ argument regarding “constructive merger,” finding “nothing
in real estate or municipal law to support such a concept.”
The trial judge went on to review the history of the case and
concluded that Lot 27 is undersized and non-conforming as a result of a
zoning change and not through any action by Shire or its predecessor in
title. The judge also took into account Shire’s efforts to sell Lot 27
to the plaintiffs for fair market value. Finally, the judge affirmed the zoning
board’s finding that Shire had satisfied the positive and negative criteria in N.J.S.A.
40:55D-70.
Plaintiffs appealed and the Appellate Division reversed. Jock v. Zoning Bd. Of Adjustment
of Township of Wall, 371 N.J. Super. 547, 561 (2004). In ruling, the
court rejected Shire’s argument that identity of legal title to the adjacent lots
is the critical path to merger. Id. at 551. The panel concluded that
Loechner is not limited to cases in which one party holds title to
contiguous lots; rather, where one party exercises dominion and control over the contiguous
non-conforming lot of another or where the property is in equitable or constructive
ownership, that is sufficient for Loechner merger purposes. Id. at 555-56.
More particularly, the court pointed to Clarence Allen’s previously detailed activities on Lot
27 as evidence of ownership, warranting a merger conclusion. Id. at 560. In
addition, the panel found that merger had separately occurred when Amato purchased Lots
26 and 27 from the Allens because Amato was the “equitable” owner of
both lots during the period prior to the closing of title. Ibid. Further,
the panel concluded that because Amato was a principle shareholder in Shire, the
properties merged under Loechner when Amato took title to Lot 26 and Shire
to Lot 27. Ibid.
The panel also determined that the efforts of the elder Allens and Shire
to avoid merger “rendered the isolation of the non-conforming lot a self-created hardship.”
Id. at 551. Finally, the panel rejected Amato’s arguments that the municipality and
the plaintiffs were estopped from asserting claims in respect of Lots 26 and
27.
See footnote 4
Id. at 561. We granted Amato’s petition for certification. Jock v. Zoning
Bd. Of Appeals of Township of Wall,
182 N.J. 151 (2004).
II
Shire argues that Loechner does not apply to property legally in separate ownership;
that any other interpretation will create chaos in the land-use field with no
concomitant benefit; that Loechner is not applicable to Lot 26 because it was
created pursuant to the Planning Act; that the zoning board was estopped from
adopting plaintiffs’ merger conclusion because of the contrary written advice of the zoning
officer; and that Sollami and Barre were well aware of the status of
the lots before purchasing Lot 26, and are thus estopped from asserting claims
against Amato.
The zoning board supports Shire, arguing not only that the Appellate Division improperly
expanded Loechner, but also that the decision has placed the title of all
contiguous undersized lots in doubt. According to the board, under Loechner, when an
application to develop an undersized lot is filed, it is able to determine
if the lot had merged simply by viewing the chain of title to
ensure that it was never jointly owned with an adjoining lot. The board
argues that it now will be compelled to ascertain the identity of parties
who owned any adjoining properties, determine their relationship to the adjoining lot owners
and assess factually whether they ever exercised dominion and control over the non-conforming
lot. The board also argues that the zoning officer’s representations to Shire should
be honored; that Barre and Sollami should be barred from relief because they
were well aware of Shire’s proposed use of Lot 27 when they purchased
Lot 26; and that because Lots 26 and 27 were created under the
Planning Act, they are exempt from merger.
Plaintiffs essentially track the arguments advanced by the Appellate Division in support of
its decision: that Loechner incorporates situations involving the continuous exercise of dominion and
control over a property such as occurred here; that Shire’s hardship was self-created;
that the planning board’s actions in respect of Lots 26 and 27 was
not of the type that would insulate the lots from merger; and that
the doctrine of estoppel is inapplicable.
III
Where a party comes into ownership of a single lot that does not
meet the area and dimension requirements of the current zoning law, and that
party does not own adjoining land, the lot is considered to be isolated
and non-conforming. Davis Enterprises v. Karpf,
105 N.J. 476, 481 (1957); William M.
Cox, New Jersey Zoning and Land Use Administration, § 12-1.1 (GANN 2005). In order
to develop such a lot, the party must apply to the zoning board
for a variance. That is what occurred in this case, and the variance
was granted. Plaintiffs argue that that grant was unlawful because the lot in
question, Lot 27, was, in fact, not “isolated,” but was part of a
larger tract in “common ownership,” thus requiring subdivision approval prior to consideration of
a variance application. That contention squarely places into issue the doctrine of merger.
A
The term “merger” is used in zoning law to describe the combination of
two or more contiguous lots of substandard size, that are held in common
ownership, in order to meet the requirements of a particular zoning regulation. Robert
M. Anderson, 2 American Law of Zoning § 9.67 (4th ed. 2005). In effect,
it requires subdivision approval for the development of individual substandard parcels if contiguous
parcels have been, at any relevant time, in the same ownership and, at
the time of such ownership, the parcel was not substandard.
Merger is said to be “theoretical” in the sense that it does not
preclude the treatment of the lots as separate for other purposes. The official
map is not affected; neither are taxes, Young v. Bergen County Bd. of
Taxation,
5 N.J. Tax 102, 108-09 (1982), or financing arrangements altered, Family Savings
Bank v. Devincentis,
284 N.J. Super. 503, 509 (App. Div. 1995). See David
J. Frizzell, New Jersey Practice Land Use Law, § 13.18 (2d Ed. 1999). Indeed,
the issue of merger will never arise unless the property is specifically brought
to the attention of the relevant land use board. Ibid. Thus, in reality,
the so-called merger doctrine is simply the characterization of adjacent undersized lots in
common ownership as part of a larger tract or parcel with an eye
toward effectuating present day zoning laws. Fred McDowell, Inc. v. Bd. of Adjustment
of the Township of Wall,
334 N.J. Super. 201, 224 (App. Div. 2000).
Loechner, supra, is an example of that principle.
B
In Loechner, the plaintiff and her husband acquired title as tenants by the
entirety to three adjoining lots on which their house was situated. 49 N.J.
at 507. The combined frontage of those lots (186, 187, and 188) was
75 feet. Ibid. Mr. Loechner later acquired title to two adjoining vacant lots
(189 and 190) in his own name. Ibid. Those lots had a combined
frontage of 50 feet. When Mr. Loechner died, title to the two adjacent
lots passed to his wife. Ibid.
She then entered into an agreement to sell the two lots to a
developer. Ibid. At the time of the sale, a municipal ordinance required a
minimum of 75 feet of frontage and later was amended to require 100
feet of frontage. Ibid. Prior to transfer of title, the developer successfully applied
to the zoning board for a variance to build on the lots. Ibid.
The town refused to issue a building permit because it viewed the lots
as part of Mrs. Loechner’s larger parcel and because the developer had not
applied for subdivision approval from the planning board. Ibid. The planning board declined
to grant subdivision approval because doing so would create an undersized lot. Ibid.
After exhausting her remedies, Mrs. Loechner filed an action in lieu of prerogative
writs and prevailed in asserting that subdivision approval was not necessary because the
five lots were delineated under the Old Map Act. Id. at 507-08. The
Borough appealed and we certified the case directly. We identified the pivotal question:
[W]hether the sale of two contiguous lots out of a group of five
lots, all in one ownership and delineated on a map filed under the
Old Map Act, is a subdivision and whether Planning Board consent to the
said conveyance of the two lots is required.
[Id. at 508 (emphasis added).]
In answering that question, we accepted as a given the doctrine of merger.
We said:
The acquisition of title by plaintiff to Lots 189 and 190 which were
contiguous to Lots 186 - 188 created one parcel or tract of land
consisting of five separate lots as shown on the Hitchcock map.
[Ibid. (emphasis added).]
We went on:
Plaintiff’s contemplated conveyance of Lots 189 and 190 thereafter constitutes a prospective subdivision
and requires the advance approval of the Planning Board unless she prevails on
her argument that the delineation of these two lots on a filed map
precludes the application of the subdivision statute and/or ordinance.
[Ibid.]
In reaching our conclusion, we relied on the language of N.J.S.A. 40:55-1.2 that
defines a subdivision as “the division of a lot, tract or parcel” and
noted,
The word ‘lot’ as used in the Subdivision Act must be read in
context with the words ‘tract or parcel of land’ in order to ascertain
its meaning. Consistent with recognized principles of statutory construction ‘lot’ takes its meaning
from the other two words with which it is associated. Martell v. Lane,
22 N.J. 110,
123 A.2d 541 (1956); Salz v. State House Commission,
18 N.J. 106,
112 A.2d 716 (1955); State v. Murzda,
116 N.J.L. 219,
183 A. 305 (E. & A. 1936); 2 Sutherland, Statutory Construction § 4908 (3d ed.
1443).
[Loechner, supra, 49 N.J. at 510.]
Important to our analysis, as well, was the fact that the Old Map
Act was merely a conveyancing aid whereas the Planning Act “was designed to
afford municipalities desiring the advantages of its provisions to enact comprehensive regulatory standards
which would facilitate sound and orderly future municipal growth along preconceived lines, in
short a planned community growth.” Ibid.
Ultimately, we held that Mrs. Loechner’s adjacent lots, although denominated on the Old
Map, were, under the merger doctrine, part of a larger tract or parcel
she owned, and that:
[R]eduction in the size of a parcel or tract of land by a
division into two or more smaller parcels is in the language of the
Subdivision Act a ‘subdivision’ and subject to the statutory terms. See Lake Intervale
Homes, Inc., v. Parsippany-Troy Hills T[ownship],
47 N.J. Super. 334,
136 A.2d 57
(Law Div. 1957), aff’d.
28 N.J. 423,
147 A.2d 28 (1958). The separation
of Lots 189 and 190 from the balance of the lots owned by
plaintiff constituted a subdivision.
[Loechner, supra, 49 N.J. at 511-12.]
We added that if the lots resulting from the proposed subdivision would meet
all zoning requirements, except for area and dimensional standards, the subdivision should be
approved subject to the grant of a variance.
See footnote 5
Id. at 512.
In sum, a Loechner merger takes place as a matter of law where
adjacent substandard lots come into common legal title. Although Loechner never actually used
the word “merger,” commentators and subsequent decisions have denominated the Loechner rule as
a merger principle. Cox, supra, §12-2 (stating Loechner is a merger case); Frizzell,
supra, § 13.18 (stating “decisions in Ardolino, Loechner and Ryan[
See footnote 6
] [gave] municipalities . .
. power to “merge” adjacent non-conforming properties”); 3 Rathkopf, The Law of Zoning
and Planning, § 49.13 (2005) (citing Loechner and stating “merger requirements” may operate upon
contiguous undeveloped lots pursuant to Loechner); Scardigli v. Borough of Haddonfield Zoning Bd.
of Adjustment,
300 N.J. Super. 314, 320 (App. Div. 1997) (stating lots filed
under Old Map Act under common ownership “merged”). C
There are a number of recognized exceptions to the merger doctrine. For example,
it does not apply to adjoining lots, owned by the same person, “all
of which are found and certified by the administrative officer to conform to
the requirements of the municipal development regulations and are shown and designated as
separate lots, tracts or parcels on the tax map or atlas of the
municipality.” N.J.S.A. 40:55D-7; Scardigli, supra, 300 N.J. Super. at 320-21. Likewise, it does
not apply where a party who owns a non-conforming lot acquires a contiguous
lot that fronts on a different street (back-to-back lots) and merger would not
create a conforming lot. Chirichello v. Zoning Bd. of Adjustment of Monmouth Beach,
78 N.J. 544, 554 n.2 (1979) (citing 2 Rathkopf, The Law of Zoning
and Planning, § 32.06(2) (4th ed. 1978) (stating “general rule that adjoining parcels in
one ownership merge so as to constitute only one lot [is not applicable
where back to back or “L” shaped lots are involved], since it would
require a strained finding that these two lots were intended to form one
exceptionally long, narrow plot and would be in total disregard of the fact
that each fronts on a different street”)); Somol v. Bd. of Adjustment of
Borough of Morris Plains,
277 N.J. Super. 220, 228 (App. Div. 1994) (stating
Chirichello exception to merger doctrine does not apply if merger would create conforming
lot). Given that the purpose of the merger doctrine is to bring non-conforming
lots into conformity and thus advance the zoning scheme, those exceptions for cases
where the property is already conforming or where it cannot be rendered conforming
make sense.
See footnote 7
There is an additional exception that is applicable in this case. In Pribish
v. Corbett,
105 N.J. Super. 407, 409 (App. Div. 1996), the Appellate Division
held that contiguous lots created pursuant to a subdivision approved under the Planning
Act of 1953 do not merge. Pribish distinguished that situation from Loechner:
Those cases dealt with lots mapped and platted pursuant to statutes antedating the
Planning Act of 1953--statutes devoid of the significant and salutary protections of the
public interest contained in that act. The lots here involved having once been
finally approved by the planning board, operating under the standards of the Planning
Act of 1953, as appropriate for separate home sites, that decision is in
nowise impaired or rendered devoid of effect, insofar as the Planning Act is
concerned, by the fact that two of such lots, adjacent to each other,
have subsequently come into a single ownership. This is at least true where,
as we find to be the case here, the owner has done nothing
to destroy the distinct identity of the two lots as suitable building sites.
[Ibid.]
That reasoning reflects the reality that, where property has already satisfied modern land
planning rules, merger is unwarranted. Accordingly, once a lot has been created by
a planning board pursuant to subdivision approval, it is exempt from the merger
doctrine.
Plaintiffs argue that that exception does not apply here because the board’s action
in 1959 was not “of the type” required to invoke Pribish. The statutory
definition of subdivision and the existing case law are instructive. Pursuant to N.J.S.A.
40:55D-7, a subdivision is:
the division of a lot, tract or parcel of land into two or
more lots, tracts, parcels or other divisions of land for sale or development.
The following shall not be considered subdivisions within the meaning of this act,
if no new streets are created: (1) divisions of land found by the
planning board or subdivision committee thereof appointed by the chairman to be for
agricultural purposes where all resulting parcels are 5 acres or larger in size,
(2) divisions of property by testamentary or intestate provisions, (3) divisions of property
upon court order, including but not limited to judgments of foreclosure, (4) consolidation
of existing lots by deed or other recorded instrument and (5) the conveyance
of one or more adjoining lots, tracts or parcels of land, owned by
the same person or persons and all of which are found and certified
by the administrative officer to conform to the requirements of the municipal development
regulations and are shown and designated as separate lots, tracts or parcels on
the tax map or atlas of the municipality.
On its face, that statute appears to encompass the planning board action in
1959 that granted the Sherman’s subdivision application for approval to sever a 20
foot strip from Lot 25 and create a new and more conforming Lot
26 conditioned on the Allens granting the town a drainage easement and the
zoning board, in turn, granting the Allens a side yard setback variance on
Lot 27.
Recently, the Appellate Division reached a similar conclusion. In Menlo Park Plaza v.
Planning Bd.,
316 N.J. Super. 451, 459 (App. Div. 1998), certif. denied,
160 N.J. 88 (1999), that court held that a proposal for a roadway through
a lot, creating two slivers of property on either side, was sufficient to
fall within the meaning of N.J.S.A. 40:55D-7. Likewise, in Scardigli, supra, the Appellate
Division decided a case that has resonance here. There, the planning board had
allowed severance of a small piece of one lot (Lot 6) so that
it could be joined with another lot (Lot 8). 300 N.J. Super. at
317. The Appellate Division held that even though a single owner held title
to Lots 8 and 9, both of which were undersized, because the planning
board had previously approved the reconfiguration of Lot 8, it could be sold
without regard to Lot 9. “The doctrine of merger does not apply to
them . . . .” Id. at 321 (citing Cox, supra, ch. 12-2.3,
210-11). That is what occurred in this case. Accordingly, the board’s actions in
1959 in creating Lot 26 insulated it from Loechner merger with Lot 27.
IV
The merger inquiry could end there. However, because of the implications of the
Appellate Division’s holding that Loechner is a conduct-based analysis and does not require
commonality of title, we choose to address plaintiffs’ argument that the senior Allens
were the true owners of both lots and that therefore the fact of
different legal title is of no consequence to a Loechner analysis, a premise
with which we disagree.
Notably, the Court in Loechner did not deem the lots to have merged
until all five were titled in Mrs. Loechner’s name. Related ownership was obviously
not within our contemplation as a merger trigger, nor was the issue of
dominion and control. Rather, we intended the rule to operate, as a matter
of law, to prevent the development of individual substandard lots, without subdivision approval,
if contiguous parcels are or have been held in common title. Over the
past 38 years and until the decision of the Appellate Division in this
case, the view that Loechner requires identity of legal title appears to have
been well understood. Indeed, plaintiffs were unable to cite a single New Jersey
case that has ever considered a merger analysis in the absence of common
legal title. The reason is obvious: simple logic requires commonality of title before
lots can be considered part of a larger tract or parcel for zoning
purposes. We note, moreover, that that approach has created no particular difficulties. As
Loechner obviously recognized, the rule is straightforward and simple, requires only a title
search, and results in uniformity and predictability of outcome.
On the contrary, plaintiffs’ notion that we should import a conduct analysis into
the merger doctrine would have major ramifications to land use authorities and would
render the title of all contiguous undersized lots in doubt. It would further
devolve upon the land use authorities the job of determining, not only the
results of a title search, which, under Loechner, would be sufficient, but also
the historical relationship between and conduct of adjoining property owners toward each other
and toward the land. It goes without saying that the proof problems would
be complicated and the nature of the proceedings vastly expanded. That same onus
would fall on all purchasers of undersized lots, in contravention of the accepted
principle that a purchaser should be able to rely on record title. Palamarg
Realty Co. v. Rehac,
80 N.J. 446, 453 (1979) (citing Donald B. Jones,
The New Jersey Recording Act A Study of its Policy,
12 Rutgers L.
Rev. 328, 329-30 (1957).
Plaintiffs argue that we should be willing to pay that institutional price because
their interpretation of Loechner could result in more zoning conformity by sweeping in
more lots. Even if that is true, it would be at too steep
a cost: the proliferation of merger litigation with complex proof problems and the
loss of simplicity, uniformity and predictability. Further, it will merely assure that parents
will never buy adjoining property for their children and that related legal entities
will be assiduous in purchasing only non-contiguous lots for fear that any informality
in the way the lots are treated will cause them to merge. In
other words, the undersized lots will still be sold and likely developed, but
not by adjacent owners.
That convoluted methodology with its complicated proof problems and lack of societal benefit
was not what we intended in Loechner. Rather, we intended the legal merger
principle to be a narrow, bright-line rule applicable only to properties in common
legal title.
Our holding dovetails with the approach taken by the vast majority of jurisdictions
that have accepted a merger doctrine. To be sure, the states have not
adopted a monolithic approach to the subject. Thus, some hold that merger of
adjacent undersized lots in common title is “automatic.” See, e.g., Farley v. Town
of Lyman,
557 A.2d 197, 200 (Me. 1989). Others hold that merger of
adjacent undersized lots in common title is not “automatic,” but, in addition, requires
an assessment of the “intent” of the parties. See, e.g., Iannucci v. Zoning
Bd. of Appeals of Town of Trumbull,
592 A.2d 970, 972-73 (Conn. App.
1991). Regardless of the approach adopted, the leitmotif that runs through the overwhelming
majority of cases, including those cited by plaintiffs, is that commonality of legal
title is the base line for a merger analysis. See, e.g., Friends of
the Ridge v. Baltimore Gas and Electric Co.,
724 A.2d 34, 38 (Md.
1999); Appeal of Weeks,
712 A.2d 907, 910 (Vt. 1998); Robillard v. Town
of Hudson Zoning Bd. of Adjustment,
416 A.2d 1379, 1381 (N.H. 1980); Schultz
v. Zoning Bd. of Appeals,
130 A.2d 789, 792 (Conn. 1957); Tinicum Township
V. Jones,
723 A.2d 1068, 1072 (Pa. Commw. Ct. 1998). We agree. Under
that standard, Lots 26 and 27 did not merge when they were titled
in the senior and junior Allens respectively, and we reverse the Appellate Division’s
conclusion to the contrary.
V
Plaintiffs raise entirely different merger arguments in respect of Amato and Shire. Unlike
the claims regarding the Allens that are solely conduct-based, plaintiffs urge, not that
Amato and Shire “treated” the lots as one, but that they actually held
Lots 26 and 27 in common legal title. We will address those arguments
serially.
A
Plaintiffs first contend, and the Appellate Division agreed, that Lots 26 and 27
merged into common title when Amato contracted to purchase them because he became
the equitable owner of both lots. We disagree. The doctrine of equitable ownership
or equitable conversion is not a fixed rule but a fiction devised to
achieve justice between the parties to a real estate transaction. N.J. Highway Auth.
v. Raemsch Coal Co.,
40 N.J. Super. 355, 361 (Law Div. 1956). Thus,
for example, the doctrine has been used as a loss allocation device as
between the parties to a real estate contract where property is damaged or
destroyed after a contract is executed but before title has passed. See, e.g.,
Coolidge & Sickler, Inc. v. Regn,
7 N.J. 93, 99 (1951).
The doctrine is also commonly applied to cases in which a party to
a real estate contract dies before closing. Equitable conversion is invoked to require
the decedent’s estate to carry through with the transaction, thus giving effect to
the intent of the parties. In the Estate of Yates,
368 N.J. Super. 226, 235 (App. Div. 2004) (citing Courtney v. Hanson,
3 N.J. 571, 575
(1950)). The doctrine rests on the principle that, as between parties to a
contract, equity regards things as done that were agreed to be done. Cox
v. RKA Corp.,
164 N.J. 487, 495 (2000); 17 Williston on Contracts 50:42
(4th ed. 2004). The contract itself is the key.
A necessary corollary of the rule is that the doctrine will not be
applied where it is apparent from the contract that the parties intended that
it should not operate as an equitable conversion. Williston, supra, § 50.42; Gallicchio v.
Jarzla,
18 N.J. Super. 206, 214 (Ch. Div. 1952). Thus, for example where
a contract provision specifically allocates the risk of loss between execution and closing,
the doctrine of equitable ownership will not place the loss elsewhere. Coolidge, supra,
17 N.J. at 98 (citing Marion v. Wolcott,
68 N.J. Eq. 20, 22
(Ch. 1904; Cropper v. Brown,
76 N.J. Eq. 406 (Ch. 1909)). In essence,
equitable conversion is invoked to give effect to the mutual intent of the
parties. Importantly, the doctrine does not effect a transfer of legal title. Cox,
supra, 164 N.J. at 495.
There is simply nothing about the contracts for Lots 26 and 27 that
would warrant application of the doctrine of equitable conversion. First, plaintiffs are third
parties seeking to invoke the doctrine to their advantage and not to give
expression to the wishes of the Allens and Amato. That is not a
legitimate use of the doctrine. Second, there is nothing in the contracts to
suggest that the parties expected, intended or even imagined that they would eliminate
the separate legal titles in which the properties had been held up to
that point. In fact, in light of the efforts Amato took to insure
that the lots would not merge, including obtaining Hoffman’s representations to that effect,
and his reservation of the right to take title in Shire’s name, plaintiffs’
proposed equitable conversion would appear to thwart and not carry out the intent
of the parties. Thus, the Appellate Division’s conclusion that the contract of sale
to Amato operated to transfer title to him on an equitable conversion basis
is an unsupportable application of the doctrine. Accordingly, the lots did not merge
when Amato contracted to buy them.
B
Plaintiffs also argue and the Appellate Division agreed that merger occurred when Amato
and Shire took title to Lots 26 and 27. That conclusion is likewise
wide of the mark. As indicated above, the lots had not merged under
the Allens. Thus, they were sold separately –- Lot 26 to Amato alone,
and Lot 27 to Shire Realty, a corporation in which Amato and his
wife were sole shareholders. Those are entirely distinct legal entities entitled to recognition
by the court. See Lyon v. Barrett,
89 N.J. 294 (1982) (stating professional
corporation and its sole owner are separate entities which will be respected); LBD
Construction v. Dir. Div. Taxation,
8 N.J. Tax 338 (1986) (noting individual and
corporation of which he is sole shareholder are separate legal entities entitled to
recognition by courts).
Even if Amato and his wife, as the sole owners of Shire Realty,
were viewed as the actual owners of Lot 27, (as opposed to the
corporate owners) that would not advance plaintiffs’ position because Amato alone owned Lot
26. See, e.g., Carciofi v. Bd. of Appeal of Billerica,
492 N.E.2d 747
(Mass. App. Ct. 1986) (stating lots owned individually and adjoining lot owned as
tenant in common with another were not in common ownership).
Moreover, if the Amatos jointly owned Lot 27 and Amato individually owned Lot
26, the situation would be identical to that in Loechner before the properties
were deemed to have merged. There, as in this case, some of the
property was titled solely in the husband while the husband and wife jointly
held title to the rest. See Loechner, supra, 49 N.J. at 507. Nevertheless,
we did not find that merger had occurred until the husband’s death resulting
in Mrs. Loechner alone having legal title to all of the lots. Id.
at 508. Because these circumstances are, at best, virtually identical to Loechner, ownership
of one lot by Amato and the other by Shire Realty does not
allow a finding of merger.
VI
We turn next to plaintiffs’ claim that the hardship in this case was
self-created by Shire or a predecessor in title thus barring Shire’s right to
a (c)(1) hardship variance. N.J.S.A. 40:55D-70(c)(1), provides:
c. (1) Where: (a) by reason of exceptional narrowness, shallowness or shape of
a specific piece of property, or (b) by reason of exceptional topographic conditions
or physical features uniquely affecting a specific piece of property, or (c) by
reason of an extraordinary and exceptional situation uniquely affecting a specific piece of
property or the structures lawfully existing thereon, the strict application of any regulation
pursuant to article 8 of this act would result in peculiar and exceptional
practical difficulties to, or exceptional and undue hardship upon, the developer of such
property, [the zoning board shall have the power to] grant, upon an application
or an appeal relating to such property, a variance from such strict application
of such regulation so as to relieve such difficulties or hardship[.]
Undue hardship refers solely to the particular physical condition of the property, not
personal hardship to its owner, financial or otherwise. See Isko v. Planning Bd.
of Livingston,
51 N.J. 162, 174 (1968), abrogated on other grounds, Commercial Realty
and Resource Corp. v. First Atlantic Properties Co.,
122 N.J. 546 (1991).
The availability of a hardship variance depends on how the hardship was created.
If an owner who was entitled to a hardship variance sells to a
buyer who is aware of the non-conformity, the buyer does not lose the
right to a variance because of that knowledge. Harrington Glen Inc. v. Municipal
Bd. Of Adjustment of the Borough of Leonia,
52 N.J. 22, 28 (1968)
(stating where neither owner of lot at time of adoption of zoning ordinance
which made lot undersized, nor subsequent owner, does anything to create condition for
which variance is sought, right to relief possessed by original owner passes to
successor in title)
.
Likewise, if the prior owner was not entitled to a
hardship variance, that impediment would pass to a buyer, even one who had
no hand in creating the hardship. Ketcherick v. Borough of Mountain Lakes Bd.
of Adjustment,
256 N.J. Super. 647, 654 (1992)(citing Commons v. Westwood Zoning Bd.
of Adjustment<