Housing Authority of New Brunswick v. Suydam Investors

The New Jersey Law Journal has recently reported that New Brunswick’s Housing Authority will pay $2.05 million to an Investment company that owns homes and commercial properties in the city. The properties have been condemned by the Authority so that they may be converted into low and moderate-cost housing.

The process through which the Housing Authority went through in order to proceed with condemnation began in 2000 when it offered $972,000 for the properties. The property owner, Suydam Investors did not accept the Authority’s offer, instead claiming that the properties were worth $2.5 million. Finally a compensation commission determined and awarded the investors $1.7 million.

As is the case with many condemnation proceedings in New Jersey, there was an environmental issue raised. It was alleged that there were contamination of certain properties with asbestos, oil, and lead paint. As such, the authority sued to amend its original valuation so that it could take into account the costs associated with remediation. The matter went to the State Supreme Court which held that contaminated property, when condemned, must be valued as if it has been remediated and the condemnor should reserve the right to maintain a separate action for remediation or cleanup costs.

This case is important since the reported decision confirms that the condemning authority is not allowed to withhold funds for estimated environmental problems, but must deposit the full compensation amount with the court. Secondly, this shows that often times the clean up costs are exaggerated by the condemning authority, and as such, individuals whose property is labeled as having environmental clean up concerns should retain an attorney with a knowledge of the applicable environmental clean up standards in New Jersey.