New Jersey Lawyer & Attorney : Stark & Stark Law Firm : New Jersey Law Blog

This week's New Jersey Legal Update podcast will discuss the recently revised anti-discrimination laws in New Jersey. This podcast will address the new additions to the New Jersey Law Against Discrimination, which are "gender expression" and "an employee's involvement in civil unions."

This week's New Jersey Legal Update podcast is presented by John MacDonald, Shareholder of Stark & Stark's Employment Litigation Group.

You can download the New Jersey Legal Update Podcast # 69 here. (2.95 MB)

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Adam J. Sieglheim, member of Stark & Stark's Franchise group, authored the article, Long-Delayed Revisions for Franchise Regs: Many Inconsistencies Between Federal and States' Disclosure Requirements Eliminated for the June 25 edition of the New Jersey Law Journal.

The article discusses the Federal Trade Commission's announcement of substantial revisions to its franchise disclosure requirements.

You can read the full article here.

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Thomas Lewis, Chair and Shareholder of Stark & Stark's Employment Litigation Group was quoted in the article New Transsexual Rights Law Leaves Lawyers Guessing About Its Terms, in Monday's New Jersey Law Journal. The article discusses a recent ammendment to the Law Against Discrimination,  barring "gender identity or expression" discrimination.

You can read the full article here.

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Adjoining property owners frequently encounter overhanging branches from a neighbor’s tree, hedge or other vegetation.  Although the base of a tree may be in your neighbor’s yard, when branches, limbs or roots cross over the boundary line, they may constitute a nuisance.

    Through two New Jersey Supreme Court cases, our Supreme Court recognized that encroaching branches may constitute an actionable nuisance and that a common law right exists to cut off overhanging branches to the property line, but no further. 

    In Ackerman v. Ellis, 81 N.J.L. 1, 79 A. 883 (Sup. Ct. 1911) the New Jersey Supreme Court held that tree branches which overhang the premises of another may constitute a nuisance. In such instances, the person over whose land they spread is entitled to an action for damages against the person responsible for their presence there.

    In Wegener v. Sugerman, 104 N.J.L. 26, 138 A. 699 (Sup. Ct. 1927) the New Jersey Supreme Court held that a landowner may lawfully cut overhanging branches of trees or hedges, but may not destroy the tree or hedge on the neighbor’s land.  This form of self-help was found to be acceptable to the Court.

    The New Jersey Appellate Division addressed damage caused by tree roots to a neighboring property owner’s wall in D’Andrea v. Guglietta, 208 N.J. Super. 31, 504 A.2d. 1196 (App. Div. 1986).  That case held that damages were properly awardable in the absence of proof that the wall owners were aware of tree roots in the vicinity of their wall before it was damaged.  The encroachment, this time by tree roots, was recognized as a nuisance.  However, this Court distinguished between tree branches and tree roots, which are largely underground, evident only upon digging down, their extent and girth uncertain and unpredictable, they are not commonly pruned or otherwise tended and their severance may endanger the tree’s stability in high winds and rainstorms.  208 N.J. Super. at 34.  The Court found that the “relatively uncomplicated law governing invasion of adjoining property by tree branches may not be fairly applicable under all circumstances to tree roots”.  208 N.J. Super. at 35.  The Court held that injury to an adjoining property caused by the roots of a planted tree was actionable as a nuisance and damages were recoverable, in the absence of any pleading or proof that the damages were avoidable or that complaining party had “come to the nuisance.”  208 N.J. Super. at 36.  In D’Andrea, when the adjoining property owners installed their wall, they saw no evidence of the neighbor’s trees roots in the vicinity of their wall, nor was there proof before the Court that they could have foreseen the direction and extent of the tree roots’ growth.  It should be noted however, that the D’Andrea case did not involve self-help, but only a claim for damages.

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This week's New Jersey Legal Update podcast will discuss the United States Fair Housing Act, and its connection to community associations.

This week's New Jersey Legal Update podcast is presented by Dave Byrne, Co-Chair and Shareholder of Stark & Stark's Community Associations Group.

You can download the New Jersey Legal Update Podcast # 68 here. (5.86 MB)

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Public Advocate Ronald K. Chen released a follow up report on May 29, 2007, addressing what he perceives as abuses in the use of eminent domain to acquire property for redevelopment projects.  After setting forth a synopsis of specific examples of eminent domain abuse arising in cases decided by the New Jersey courts, the Public Advocate suggests several remedies which seemed to be directed towards his critics and the legislators considering amending the existing laws.  However, are  Public Advocate Ronald J. Chen and the two legislators who sponsored bills aimed at reforming the law (Senator Ronald Rice (D-Essex) and Assemblyman John Burzichelli (D-Gloucester)) on a course to reach a proper balance in the law?  Possibly, but more work is needed.

    What is at stake is the right to own property on one hand, and the need to encourage and complete redevelopment plans in truly blighted areas.  When used properly, redevelopment can turn a blighted and unsafe area into a thriving and safe neighborhood.  However, when abused, properties which have some deferred maintenance issues (i.e. chipped paint) are being taken to make room for higher end homes and businesses, changes need to be made.  The proper balance can be achieved by focusing on the following issues.

    First, the issue of what constitutes “blight” must be addressed.  The New Jersey Constitution limits the taking of private property for private redevelopment to blighted properties only. Some believe that the vague definitions in the Local Redevelopment and Housing Law have greatly expanded this limitation and would allow virtually all of New Jersey to be placed in an “area in need of redevelopment” since a land planner could most likely find a problem in every home and conclude that, based upon today’s design and land use standards, the property in not fully productive or fully utilized.  The proper balance can be achieved by changing the definition of an “area in need of redevelopment” to one that is closer to the constitutional requirement of blight.

    Second, all public notices should be use plain language and delivered to homeowners, not just published in the local newspaper.  The public must be told that their local government is considering action that may involve the condemnation of their homes or business.  For a person to understand the type of notice used by most towns seeking to designate an area in need of redevelopment, he or she would have to enroll in law school and take several classes in land use law.  The law needs to be changed so that property owners receive notice in a manner designed to allow them to seek professional advice on how to proceed.

    Third, make it clear that the condemning authority must prove, at every stage, that the property is blighted.  All hearings need to be open to the public with a detailed explanation of what exactly will happen if a redevelopment plan is approved.  Each step must be explained, with an opportunity to ask questions and present proofs.  A detailed record needs to be made in order to allow for proper judicial review when the time comes.

    Finally, compensation needs to be fair. Under the present law, compensation is often inadequate and the relocation benefits minimal, at best.  Property owners should not be given a windfall, but need to be made whole in order to meet the requirement of just compensation.  It is the “making whole” that needs to be addressed. Much of the resistence to the legitimate exercise of eminent domain would be eliminated if property owners felt adequately compensated and relocation costs covered.

    In regards to residential property owners, they must be paid enough money to find  replacement housing in a safe and comparable neighborhood.  In some circumstances, replacement housing may cost more than the property being taken.  Under existing law, the measure of damages is generally the fair market value of the property being taken.  In many cases, the fair market value standard works.  However, when replacement housing cannot be purchased with the fair market value taking proceeds, a property owner must have some other recourse in order to be justly compensated.

    As for businesses, New Jersey law only requires a condemning authority to compensate a property owner for the real estate, not the business itself.  The only requirement is to relocate the business.  Often times, a business is dependent upon a certain location (i.e. down town location) and cannot afford a rent increase.  If there are no affordable business locations available, the business may be forced to close. The law needs to be reformed to take into consideration rent differentials and allow business owners an opportunity to prove that additional compensation is needed to allow them to survive.

    Redevelopment is a necessary planning tool for many parts of New Jersey.  We have neighborhoods and cities that need to be revived for the long-term health of our State and its residents.  However, eminent domain cannot be used simply because a town decides it prefers a more upscale neighborhood or needs additional tax ratables.  The proper balance will allow blighted areas to be redeveloped, but stop the abusive practice detrimental to the rights of property owners.   

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Port Liberte Homeowners Association, Inc. v. Sordoni Construction Company
N.J. Super. (App. Div. 2007) (A-2138-04)

In a case of first impression, the New Jersey Appellate Division has determined that a condominium association has standing to sustain claims for both fraud and consumer fraud against third-party contractors and manufacturers even though the fraudulent misrepresentations and omissions by these third-parties were made to the developer and occurred prior to the creation and construction of the association.  J. Randy Sawyer, Esquire, a shareholder in Stark & Stark’s Construction Litigation Group, successfully argued this matter as amicus curiae on behalf of the Community Associations Institute along with counsel for the homeowners’ association.  You can read Randy’s detailed discussion of the Port Liberte decision here. 

Briefly stated, the facts of Port Liberte are as follows: the Port Liberte Homeowners Association, Inc. (hereinafter “Port Liberte”) brought numerous claims against both the contractors who were involved in the construction of Port Liberte’s buildings and common elements as well as the manufacturers of the materials used in this construction, specifically, the Exterior Insulation and Finish System (“EIFS”).  As part of its complaint, Port Liberte asserted fraud and consumer fraud claims against the contractors and manufacturers, alleging that these defendants made certain fraudulent misrepresentations to Port Liberte prior to construction of the association’s buildings, albeit when Port Liberte was still controlled by the original developer.  In its decision, the Appellate Division found that because a “condominium association is the intended beneficiary of a developer’s actions ... [third parties are] on constructive notice that representations made to, and omissions withheld from, the developer will be deemed as if they are made to, or withheld from, the association, once the association assumes control of the condominium.”  The Court found that to hold otherwise would create an unjust result, which is “contrary to the legislative scheme permitting a condominium homeowners association to institute a suit to recover damages to the common elements.”

So practically speaking, what does the Port Liberte decision mean for community associations in New Jersey?  This decision – which determines essentially that an association “stands in the shoes” of the original developer and can bring claims against third parties for misrepresentations made to the developer – has wide-reaching implications for condominium and homeowners associations going through transition.  Transition can be described as the transfer of control and responsibilities from the developer to the unit owners, which includes the governance of the association, the acceptance of the common property, and the accounting of funds.  The result of the decision in Port Liberte is that associations now must be more diligent than ever in proceeding with this transition process in order to protect the rights of the association and the individuals who live in and make up the association.  As part of this process, each association should be engaging in a thorough review of the plans, specifications, books and records of the association as well as any contracts or agreements entered into by the developer on behalf of the association.  This review should be undertaken with the assistance of the association’s professionals – engineers, accountants and counsel – to determine if there are any issues and potential claims against either the developer or third-parties for the construction and representations made thereto.  If these documents have not been turned over to the association by the developer, the association has a right under the New Jersey Condominium Act and the Planned Real Estate Development Full Disclosure Act (“PREDFDA”) to request such turnover from the developer.  Moreover, prior to entering into any transition agreement or releasing the developer or any third-parties from liability for goods and services provided during the construction, marketing and sale of the association’s units, it is essential that the association consult with counsel to ensure that the association is protecting the rights of the association and complying with its fiduciary duty with regard to the health and welfare of the association.  Overall, this decision is an enormous victory for condominium and homeowner associations throughout New Jersey, reaffirms the Legislature’s mandate to protect consumers from unconscionable practices and further demonstrates that New Jersey has one of the strongest consumer protection laws in the nation.

If you would like to discuss the Port Liberte opinion and how it affects condominium associations in more detail, please contact David J. Byrne or Jonathan H. Katz.

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On June 13, 2007, the New Jersey Supreme Court reversed a lower court ruling which upheld the designation of a parcel of property as being in “need of redevelopment.” Gallenthin Realty Development v. Paulsboro (A-51-2006 - decided June 13, 2007).  The property in question consists of approximately 63 acres of undeveloped open space.  In the past, the property owner used the property to receive dredge deposits from a nearby creek, a use that the property owner believed would continue on a sporadic basis in the future.  Also, the property owner cultivated wild-growing weed which was sold for animal feed.  However, the Township set its eyes on the property and decided it was necessary for a larger redevelopment project.  To take the property, the Township had to first have it designated as an area in need of redevelopment.  Once designated, the Township could invoke its power of eminent domain.  But how could open space that had been identified by the New Jersey Department of Environmental Protection as “protected wetlands” ever meet the definition of an area in need of redevelopment?  Easy - use the vague criteria of “not fully productive property” under the Local Redevelopment and Housing Law and argue that there are many more productive uses for the property that will benefit the public in general. Although the trial court and appellate division condoned this approach, the New Jersey Supreme Court did not.

The New Jersey Supreme Court started its review by taking us back to the Blighted Areas Clause of the New Jersey Constitution which confines the taking of private property for private redevelopment to those areas considered “blighted.”  When the New Jersey Constitution was amended in 1947 to add the Blighted Areas Clause, the New Jersey Legislature was concerned that certain sections of older cities had fallen in value and become “blighted” or “depressed.”  To facilitate investment in blighted areas, governing bodies needed the ability to assemble blighted properties in order to attract private investment in the hopes of reviving a depressed area.  This is a sound policy.  Years later, the legislature adopted the Local Redevelopment and Housing Law which adopted the concept of an “area in need of redevelopment” which, for all intents and purposes, was an expanded definition of blight.

In this case, the fact that the property was not fully productive, standing alone, clearly cannot be the basis for a taking under the limitations imposed by the Blighted Areas Clause of the New Jersey Constitution.  The New Jersey Supreme Court confirmed that to meet the requirements of the New Jersey Constitution, more must be shown.  Evidence must be presented as to why the property is not fully productive and that evidenced must be viewed in light of the other criteria set for in the Local Redevelopment and Housing Law.

Equally important is the New Jersey Supreme Court’s statement the a municipality must present “substantial evidence” to support its case.   A record must be created with facts and expert opinions that are more than a cursory review of the property and recitation of the statutory criteria. Trial courts are reminded that in order for a municipality to get the decision making deference it seeks, it must first come forward with substantial evidence to support its designation of an area in need of redevelopment.

This decision does not change the law - it merely enforces the law.  The Blighted Areas Clause of the New Jersey Constitution has been around for over 50 years and the New Jersey Supreme Court confirmed its limitation on redevelopment projects.  The Supreme Court’s decision re-enforces the growing trend of striking designations that resulted from net opinion reports and cursory review of properties.  More important, the decision will have no impact on legitimate (constitutional)  redevelopment projects.  Towns that do their homework and hire qualified planners will still be able to redevelop blighted and depressed parts of town as envisioned by the drafters of the Blighted Areas Clause of the New Jersey Constitution.

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John Randy Sawyer, Shareholder and member of Stark & Stark's Construction Litigation group, was quoted in the article Alert: Contractors on hook to condo boards, in the June 11, 2007 edition of the New Jersey Lawyer.

You can read the full article here.

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In 1981, Terrence P. Crawford drafted his well-regarded “10 Commandments”.  Over the past 25 years, Terry’s Commandments have withstood the test of time.  The following list has been created as a supplement to the original 10:

    1.      Thou shalt strive to maintain the highest standard of ethical conduct in the performance of the Association's affairs and operation, and to ensure that the Association members maintain confidence in and respect for the entire Board.

    2.     Thou shalt act in the best interests of the Association as a whole.  

    3.    Thou shalt comply with the Association’s governing documents and relevant law.  You should be familiar with the Association’s master deed, bylaws, and other governing documents and should always attempt to make reasonable decisions that are consistent with these documents.

    4.    Thou shalt act within the framework of the Association and not take action contrary to the Board’s decisions or act unilaterally.  

    5.    Thou shalt not use your position for private gain, for example:

        You should not accept or solicit, in any way, any gift, favor, gratuity, loan, or any other thing of monetary value from a person who is seeking a contractual or other business or financial relationship with the Association. You should never use your position for financial or personal gain. You should never seek preferential treatment from the Board or any of its committees.  You should never accept a gift or favor made with the intent of influencing your decision or action on any official matter.  You should never willingly misrepresent facts to advance a personal cause or influence the membership to advance a personal cause.

    6.    Thou shalt act professionally at meetings. You should strive to conduct yourself in a professional and businesslike manner at all meetings. You should never make personal attacks against other Board Members, Association members, residents, officers, management, or guests.  Your language at meetings should be kept professional. You should always express any differences of opinion in a courteous and respectful manner.

    7.     Thou shalt maintain confidentiality.  You should strive to maintain the confidentiality of all legal, personnel, contractual and management matters involving the Association. You should also strive to maintain confidentiality of the personal lives of other Board Members, Association members, residents and management staff.

        8.     Thou shalt disclose conflicts of interests.  You should immediately disclose to the Board any perceived or potential conflict of interest regarding any aspect of the business operations of the Association.

        9.    Thou shalt  refrain from defaming or harassing anyone in the community. You should never  engage in defamation (libel and slander), by any means, of any other Board Member, Association member, resident, or management staff member.  Furthermore, you should refrain from harassing Association members or residents. In your position as a Board Member, you should never threaten, harass, or otherwise attempt to intimidate, in any way, any other person.

    10.     Thou shalt attend meetings on a regular basis.    

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The New Jersey Turnpike will be widened between Interchanges 6 and 9, including widening the existing roadway from three to six lanes in each direction between 8A in Monroe Twp. and 6 in Mansfield Twp. The Authority also intends to widen the Garden State Parkway between mileposts 30 and 80. Other road projects are occurring on local, county and state roads. Many road-widening projects require that some private property be purchased or condemned under the power of eminent domain.

As a general rule, a property owner is entitled to just compensation for the value of property taken through eminent domain. If the entire property is acquired, the general measure of compensation is fair market value. However, the matter becomes complicated when only a portion is taken in what is referred to as a “partial taking.”

In a partial-taking, the owner is entitled to be paid for the value of the property taken and any damage to the property they retain, referred to as the “remainder.” Partial takings are generally more complicated than full taking since they require more thorough analysis of the impact on the remainder which may have lost parking, access, highway views and certain future land use rights.

However, what happens when the road widening causes the highway to be so close to the buildings that the owner is forced to close its business and move, or is being so disrupted that operating the business is problematic? Can the property owner force the state to acquire the balance of the property to have a complete taking? The answer depends on whether the value of the remaining property is essentially zero.

The legislature passed a law in 1971 stating, “if as a result of a partial taking of property, the property remaining consists of a parcel or parcels of land having little or no economic value, the condemnor, in its own discretion or at the request of the condemnee, shall acquire the entire partial.” N.J.S.A. 20:3-37. The property left with little or no economic value is commonly referred to as a “uneconomic remnant.” Although at first read the statute seems straightforward, the words “little or no economic value” have caused litigation and heartaches.

Case law interpreting the statute in New Jersey and other states focuses on the economic value of the remainder, not the present use of the property. If the owner can no longer use the property for its present use, they must still prove that the property cannot be put to some other use that has value to force the State to take the entire property.

For example, a New Jersey Court failed to require the State to condemn an entire parcel being utilized as a church when a highway was expanded. After the widening, the highway was 41 feet from the front door of the church and the right of way extended to the lower steps of the entrance. At trial, the pastor testified that the church was unable to conduct services as a result. Although the court did not dispute that the church was deprived of the use of its building, the church failed to show that the property was “unfit for all uses.” As a result, the church was only entitled to the value of any damage it could prove to the property it retained.

In another case, the court did require the State to acquire an entire parcel when it sought to expand a road. In that case, part of the building was taken and what was left could not be put to any economic use. In addition, the remainder lands saddled the property owner with a building that had to be demolished and potentially could cause safety hazards.

It is very difficult to prove that a remainder has little or no economic value. When an owner’s existing use is no longer viable, the property may still have some economic value, thereby precluding a complete taking. This is particularly disturbing when an owner is required to move his business as a result of the taking, but is saddled with a property that no longer meets his needs. Although the condemning authority may be required to pay relocation expenses, the condemning authority is not required to pay for loss of business.

Uneconomic remnants cases are very difficult to win. As a result, it is important for property owners to perform a thorough investigation of every possible way the remainder may have been damaged by the taking in order to be made whole. If an owner does argue the remainder has little or no value, the property must have strong testimony from a qualified appraiser.

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