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

The Third Circuit recently affirmed the dismissal of a RICO suit brought by a disgruntled residential tenant against a residential landlord.  See, Bolmer v. Connolly Properties, Inc., 2012 U.S. App. LEXIS 3698.  The Court held that this suit was an “everyday landlord-tenant dispute adorned as a racketeering claim complete with the obligatory treble damage request that is both the sine qua non and irresistible impulse of so many civil actions under RICO.” See, Bolmer at 31. This federal case is an example of the frivolous lawsuits commercial and residential landlords face when tenants find “creative ways” to hinder landlords by making a “federal case” of state court landlord/tenant disputes, when no true federal action exists.
 

In Bolmer, the tenant alleged that the landlord conspired to harbor illegal aliens and induce illegal aliens to reside in the United States as part of a conspiracy to deny Bolmer and other tenants the full value of their leasehold. Bolmer claimed that as a result of these actions, the apartment complex fell into “slum-like conditions” with unclean commons areas, infestation of bugs and rodents, mold and criminal activities.
 

In support of his position, Bolmer cited a number of other RICO cases where courts have granted such claims. However, the Third Circuit distinguished these other cases by illustrating that the defendants in cases cited by Bolmer were involved in employment-related disputes or smuggling undocumented individuals. The Third Circuit held that in the matter before the court, the landlord merely rented apartments and was not required to conduct background checks, disclose identities or follow-up on immigration status. Further, the landlord did not bring the tenants into the country or serve as a catalyst for aliens to reside in the U.S. 
 

In Bolmber, the court stated:

"We cannot imagine that Congress contemplated that our nation’s landlords (not to mention our hotel and motel operators, innkeepers, and others who are in the business of providing accommodations) would be tasked with making complex legal determinations about who is permitted to live in this country, much less that they would be criminalized for an error in so doing."
   

Other landlord/tenant cases also deal with issues whereby a disgruntled tenant attempts to bring a state landlord/tenant dispute before the federal courts. Often, this tactic is used in removal actions.  See 2009 U.S. Dist Lexis 62655 Millville Housing Authority v. Mary Thomas. In Millville, an angry tenant sought for removal to federal court her state court landlord-tenant dispute. The court held that a landlord-tenant dispute is a state law issue that does not concern substantial federal interest. Further, the District Court, citing the Supreme Court, emphasized that a “case may not be removed to federal court on the basis of a federal defense . . . even if the defense is anticipated in the plaintiff's complaint, and even if both parties concede that the federal defense is the only question truly at issue”.  See Id. (citing, Caterpillar Inc. v. Williams, 482 U.S. 386, 393, 107 S. Ct. 2425, 96 L. Ed. 2d 318 [1987]).
   

Whether you are a commercial or residential landlord, it is important to address frivolous lawsuits - especially where a tenant tries to make their matter a “federal case”.  If not dealt with properly and immediately, such tactics can cause unnecessary delay and drive up expenses. If presented with such a complaint, it is imperative for a landlord to address the matter “head-on” and attempt to have the case dismissed or, in the removal context, remanded back to state court as quickly and efficiently as possible.  Having counsel that knows how to handle such issues is crucial for any residential or commercial landlord.
 

For my information on commercial/residential landlord’s rights and how to address disgruntled tenant disputes like this or other issues, please contact Thomas Onder at Stark & Stark in the Bankruptcy & Creditor’s Rights Group at (609) 219-7458 or tonder@stark-stark.com.

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Will the natural gas industry save America? Perhaps, but not so fast and hence the question mark added to the title. Some would argue that natural gas vehicles are far more efficient and environmentally friendly than electric and petroleum gas vehicles, but not as sexy as electric and the availability is certainly not as convenient as gasoline.

 

For instance, electric cars are defined as "zero emissions" vehicles, however, that doesn't account for the environmental impact of battery production and replacement, or the generation of the power at its source. Needless to say, with some 100,000 gasoline stations throughout the country they are readily accessible. As of now, according to a recent article, there are in excess of 1,000 natural gas fueling stations, but those are primarily associated with public transportation (e.g., city buses and fleet vehicles) and are not accessible to most of the driving public.

 

The technology for natural gas vehicles has been around for well over 20 years, but the technology has not caught on as of yet. A sustained spread of several dollars a gallon (or its equivalent in natural gas) would certainly incentivize the public and investors to pursue the technology. The unresolved environmental and political controversies involving Marcellus Shale and fracking continue to cloud the discussion involving natural gas, albeit much of the natural gas supply does not involve Marcellus Shale or fracking. Moreover, the existing spread is apparently not sufficient enough to overcome lack of inertia to widely introduce the technology to the traveling public.

 

So what would it take to create that inertia?
Perhaps tax or other financial incentives, including the substantial differences in price between gasoline and natural gas. The article posits that we will have that opportunity in the future and will need to seek approval for and start building thousands of natural gas fueling stations.

 

So what will that take?
The most obvious location for natural gas fueling stations would be to add a natural gas pump as an element of existing gasoline stations, assuming the existing stations had sufficient room to accommodate them. Perhaps one day we will also see standalone natural gas refueling stations.

 

What local approvals would be required?
That depends largely on the local ordinance and the interpretation or application of the ordinances by local officials. Are the existing ordinances for service stations broad enough to accommodate natural gas fueling? If not, a use variance would be required. Many gas stations already accommodate propane fueling tanks. Would an expansion or retrofitting of the gas station necessitate a site plan approval? In many cases, yes. Indeed, given the nature of land use in New Jersey, notably with each of the 566 municipalities having its own zoning ordinances, each with various zoning districts, permitted and prohibited uses, bulk requirements and design standards, as well as the unique zoning history applicable to each site, careful review of the zoning ordinances and zoning history is critical should this technology have the opportunity to take off in New Jersey.

Many more questions remain as to deployment of the technology, but much like the industry the conversation is in its infancy.

Gary Forshner is a Shareholder in Stark & Stark’s Real Estate, Zoning & Land Use Group in the  Lawrenceville, New Jersey office. For questions, please contact Mr. Forshner.

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Gary S. Forshner, Shareholder in Stark & Stark’s Real Estate, Zoning & Land Use Group will present several seminars at the New Jersey Builders Association’s the 64th Annual Atlantic Builders Convention:

1. Ethics in Land Use Law - Wednesday March 28, 2012 from 9:00 - 10:30 AM
2. New Developments in Affordable Housing – Wednesday March 28, 2012 from 11:00 AM - 12:30PM
3. New Requirements in Condominium Financing - Thursday March 29, 2012 from 11:00 AM -12:30 PM

The seminars will take place during the 3-day convention which will be held Wednesday March 28, 2012 through Friday March 30, 2012 in Atlantic City New Jersey. Additional information on other seminars which will be held during the convention can be found online here.

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Compliance with New Jersey’s procedural law for the filing of a property tax appeal is critical. In fact, filing an untimely appeal (even if only a few days late) will lead to dismissal. The Tax Court recently affirmed this well-settled principle and reiterated that a tax appeal for the current year must be filed on or before April 1st, or 45 days from the date the bulk mailing of the notices of assessment are completed, whichever is later. See Romero v. North Plainfield Borough, Docket No. 012383-2011, New Jersey Tax Court, January 20, 2012. The only exception to this is where a municipal-wide revaluation or municipal-wide reassessment has been implemented. In those instances, the appeal deadline is May 1st.
 

In Romero, the property owner merely filed his property tax appeal three days after the April 1st deadline. The property owner filed a motion with the Board of Taxation to allow the late filing of the appeal. The Board granted the motion over the opposition of the municipality. Subsequently, the Board entered a judgment affirming the property tax assessment, without prejudice, and the property owner appealed to the Tax Court.
 

The court ruled that because the property tax appeal was not filed by the April 1st deadline, neither the Tax Board nor the Tax Court had jurisdiction to hear the matter. The court stated that “it is well-settled law of this state that taxpayers must strictly comply with the statutory time limitations for filing an appeal, and that failure to do so is a fatal jurisdictional defect.”
 

The case demonstrates the importance of complying with filing deadlines and shows how strictly the courts follow New Jersey’s statutory framework in the context of tax appeals.

Marshall Kizner is an Associate in Stark & Stark's Lawrenceville, New Jersey office concentrating in Property Tax Appeals. For questions, or additional information, please contact Mr. Kizner.

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Gary S. Forshner, Shareholder in Stark & Stark’s Real Estate, Zoning & Land Use Group, will be honored at the 2012 New Jersey Builder’s Association’s (NJBA) 63rd Annual Atlantic Builders Convention.

Mr. Forshner will receive the Chairman’s Award for his exemplary service on the Resolution & By-Laws Committee, and will also receive the Chairman’s Award for his exemplary service on the Builders Political Action Committee (BPAC). 

The Chairman’s Award recipient is chosen by each State Committee Chair and is given to a committee member who has made significant contributions to their respective committee over the past year. The NJBA recognizes each recipient’s assistance by presenting them with an award at the Annual Board of Directors meeting which will be held during this year’s Convention.

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Renewable energy opportunities continue to exist and will likely increase drastically in the future. One of the concerns here in New Jersey is the need to extend, accelerate or expand the Solar Renewable Energy Credit (SREC) opportunities.
 

SRECs are those credits purchased by power companies for the production of solar energy. Given that solar energy facility production has exceeded expectations, creating a glut of SRECs available for purchase, the value of the SRECs have dropped to less than half of the pre-glut value.
 

The newly adopted New Jersey Energy Master Plan proposes to accelerate the purchasing obligation of utilities, or take other actions to stabilize the SREC market, and therefore may improve the value of SRECs and increase the ability to finance solar energy facilities. That, along with ongoing federal tax credits, create the opportunity for New Jersey to continue to be one of the national leaders in solar energy production, currently second only to California.
 

However, one significant component of solar energy facilities is the cost of the solar panels themselves. A recent report conducted by Science Daily concludes that the cost of solar panels has dropped by 70% since 2009, significantly enhancing opportunities to make solar energy production a more attractive investment for those producing and selling energy as well as those building net-metered energy facilities, providing energy for on-site use.
 

For the foregoing reasons, opportunities and profitability of solar energy continues to increase and should be considered by most property owners, including those that might have declined to pursue solar energy as recently as a few months ago. Below is the link to the Science Daily article discussing the huge drop is the cost of solar panels.

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In previous blogs, I discussed the scope of Chapter 91, whether an owner-occupied property is subject to a Chapter 91 request, and the problems associated with requesting a reasonableness hearing when a Chapter 91 motion is granted. Now we move to what happens when the property owner mails its response to the Chapter 91 request, but the municipality denies receipt of the response?
 

The New Jersey Tax Court recently answered this question in a case where the court sided with the property owner and denied the municipality’s motion to dismiss a tax appeal.  See Cam Gar v. Verona Township, Docket No. 004838-2011, NJ Tax Court, Nov. 9, 2011 [link]. 
 

Verona Township sought to dismiss a tax appeal alleging the property owner failed to respond to a Chapter 91 request.  The property owner admitted it received the request, but argued it responded to the request in a timely manner by mailing the completed response to the assessor.  To support its position, the property owner offered the testimony of its bookkeeper, a 16-year employee whose job responsibilities include responding to Chapter 91 requests sent for the numerous properties managed by her employer. The bookkeeper went through in detail the procedures she implemented to handle Chapter 91 requests and produced a copy of the Chapter 91 response which had her hand written note “mailed w/rent roll 9/24/10.”  Although she admitted that she did not have a specific recollection of completing or mailing the form, “she testified that she would have followed all of the above procedures as to the handling of the Chapter 91 request.”
 

The municipality argued that without a specific recollection of completing and mailing the Chapter 91 response, the property owner cannot take advantage of the “presumption of receipt” arising under New Jersey case law. In addition, the municipality argued that vague testimony would lower the standard for other property owners who could merely argue “the check is in the mail” and avoid having its complaint dismissed. The court disagreed with the municipality and denied the motion.
 

It is important to note that the court’s decision turned on the credibility of the witness and the corroborating evidence produced at the hearing. It is not enough for a property owner to allege “I believed I mailed it”, or “since I responded every  year, I believe I responded this year”, without providing a thorough description of the procedures implemented to handle Chapter 91 requests and producing documentation that supports the testimony. Prudent property owners should adopt specific procedures for responding to Chapter 91 requests, including:

1. stamping the request with the date it is received;
2. having the information assembled immediately for a timely response;
3. mailing the response by certified mail; and
4. keeping a copy of the response with some record of when it was mailed

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As a general rule, a property owner must be current with its property taxes when it files a complaint with the New Jersey Tax Court to appeal a property tax assessment. If the taxes are not current, the municipality can move to dismiss the complaint.

Is there an exception to this rule? Yes, but it is very limited.

 

The New Jersey Tax Court can “relax the tax payment requirement and fix such terms of payments as the interests of justice may require.”  N.J.S.A. 54:51A-1(b).  Recently, the New Jersey Tax Court reviewed a case where a property owner asked the court to relax the payment requirement because the municipality was partially to blame for the financial problems arising from the development of the property being appealed.  Evans-Francis Estates Associates, LP v. Township of Cherry Hill, Docket No. 012386-2011, New Jersey Tax Court, Nov. 9, 2011.   The owner alleged the municipality’s reluctance to allow affordable housing units to be constructed on the property contributed to the financing obstacles.  However, the owner conceded that the collapse in the tax credit equity market contributed to delays in starting construction.

 

The Court applied the following three part test when reviewing the request to relax the tax payment requirement:

At a minimum, it would seem that such circumstances must be (1) beyond the control of the property owner, not self-imposed, (2) unatributted to poor judgment, a bad investment or a failed business venture, and (3) reasonably unforseable.
 

The Court found the property owner failed to meet any part of the test because the “obstacles encountered by the plaintiff in securing the approvals and financing necessary to construct its project are commonplace and reasonably foreseeable.”   The Court was not persuaded that the municipality’s conduct was a mitigating factor or that the severe economic times excuse the obligation to pay property taxes.
 

The case demonstrates the challenges facing property owners in these tough economic times when it comes to appealing a distressed property. To appeal, a property owner must find a way to be current through the first quarter of the year or risk having its appeal dismissed, good times or bad. 

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Vincent J. Mangini, Shareholder in Stark & Stark’s Real Estate, Zoning & Land Use Group, authored the article, Builders and Contractors Take Note: The Move to Make Buildings Healthier is Upon Us, for the October 2011 edition of Mercer Business Magazine.

When construction a new building, contractors should ensure that the facility is sturdy, functional and safe. However, some materials and products used in building design and construction are not. Due to this fact, government agencies and non-profit organizations have recently expressed concerns over the chemicals used in construction and their impact upon the public health.

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In New Jersey, solar energy facilities have become very popular, especially among businesses and residential property owners, making our State second only to California on the national stage for total solar installations. According to the 2011 Draft Energy Master Plan released by the Christie Administration this past June, there are approximately 9,000 solar photovoltaic projects within the State and most of these are located on commercial and residential sites. Specifically, as of February 28, 2011, in terms of installed capacity, commercial and residential solar projects produced approximately 240 megawatts of power and accounted for 82% of all projects statewide (with most of the remaining 51 megawatts being installed on government sites, school properties and farmland).
 

The drive by commercial establishments and property owners to offset conventional power sources with solar energy certainly comports with current State and federal energy policies.  However, the construction and operation of a solar energy facility may involve a myriad of legal issues for which the advice and counsel of a knowledgeable attorney is essential.
 

Broadly speaking, businesses and individuals interested in hosting a solar energy facility on their premises may do so either by purchasing the solar panels and related equipment outright from a solar developer pursuant to an engineering, procurement and construction contract (EPC) or by leasing the facility long-term (usually 15 to 20 years) pursuant to a power purchase agreement (PPA).  Under both types of agreements, the solar developer may offer to design, build and maintain the solar facility.
 

One threshold matter that applies equally to EPC and PPA contracts is whether to obtain a solar feasibility study for the subject property and the proposed system equipment from an independent technical professional in consultation with an attorney. A solar developer will often perform a property and equipment analysis prior to installing the facility. However, the solar developer’s feasibility study may not include everything that a commercial enterprise or property owner may want to know before committing to the purchase or rental of a solar energy facility. For example, in order for a solar energy facility to operate efficiently and productively the owner or lessee of the system may need to prune or remove trees on site or may need to secure a solar easement from a neighboring property owner to restrict the location and/or height of a building addition, landscaping or other improvements (which might otherwise block access to sunlight).
 

A solar feasibility study should also gauge whether the proposed system size will adequately serve current energy needs (as well as any anticipated change thereto that might occur in the future) and whether the roof of the existing building where the proposed facility is to be constructed and all other structural components and the electrical system can handle the load of the proposed facility. In this regard, by way of further due diligence following receipt of a solar feasibility study, a prospective owner or lessee of a solar energy system should (1) verify with its insurance agent that the proposed facility will not require an insurance upgrade; and (2) contact all companies that have supplied warranties for the roof or other building components that the proposed facility will not require any special inspections to avoid invalidation of any such warranties.
 

Another consideration integral to both EPC and PPA contracts is the procurement of land development approvals and permits for the solar installation.  Indeed, it should not be assumed that the solar developer will obtain any required land development approvals, such as site plan or variance relief (although often they will secure the building permit) or that any failure to acquire such approvals will operate to terminate an agreement with a solar developer.  Therefore, during contract negotiations, a prospective purchaser or lessee should discuss with the solar developer and resolve such matters as which party will be responsible to make application and pay for approvals or permits and whether a failure to obtain any such approvals or permits after making a good faith effort shall operate to terminate the contract.
 

The foregoing represents just a handful of the issues that may come into play when considering whether to install and operate a solar energy system.  If you are interested in learning more about EPC or PPA contracts or have a legal issue relating to solar installations that you would like to discuss, do not hesitate to contact Vincent J. Mangini, Shareholder and LEED Accredited Professional BD+C, here in our Lawrenceville, New Jersey office.

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