Township of Pemberton v. Berardi
This is an important decision since it sets a deadline for the filing of a declaration of taking. Under New Jersey law, a condemning authority is allowed to “test the waters” by filing a complaint in a condemnation action without filing a declaration of taking or depositing funds into court. The purpose for filing the declaration of taking at a later point is to allow the condemning authority to know how much it will cost to acquire the property before it commits itself to purchase the property. However, this creates a substantial hardship on property owners since they do not know whether the property will be ultimately taken while they litigate the case (which could take years).
In Berardi, the Township of Pemberton filed a complaint seeking to condemn property on September 30, 2002. After the complaint was filed, the parties proceeded forward with the litigation while continuing to negotiate a settlement. However, after two years elapsed without the filing of a declaration of taking, the Berardis filed a motion to compel Pemberton to either file a declaration of taking or abandon the proceedings. The court denied the motion, but ordered Pemberton to deposit the amount determined by the Commissioners into court. The Berardis waited three months and refiled their motion to compel the filing of a declaration of taking or that abandonment of the action, relying upon the following statute. (N.J.S.A. 20:3-25):
If within 6 months from the date of appointment of commissioners, the condemnor fails to file a declaration of taking, the court, upon application of any condemnee, and on notice to all parties in interest, may require the condemnor, at its election, to either file a declaration of taking and make the deposit hereinabove provided, or abandon the proceedings pursuant to section 35 hereof. For good cause and upon terms, the court may extend the time for the filing of such declaration of taking, but not more than 3 months after the commencement of the action.
Pemberton focused on the word “may” and argued that the trial court has discretion to extend the deadline to file a declaration of taking beyond the 6 month time period.
After reviewing the legislative history of the law, the Appellate Division noted that the purpose of this section of the condemnation law (N.J.S.A. 20:3-25) was to protect property owners. The court concluded that a fair reading of this section is that it was “enacted to ameliorate perceived hardships, inequality and unfairness to property owners.” Under Pemberton’s reading of the statute, a condemning authority would be permitted to try it’s case to conclusion and then make a determination of whether or not to acquire the property. Clearly, this would be an extreme hardship on the property owner since the property would be tied up during the litigation. For example, some cases take two to three years to try to conclusion. During this time period, a property owner would not be able to effectively rent his or her property or make any improvements because the owner may ultimately lose title to the property.
The Appellate Division held that once a condemnee files an application to compel the condemning authority to file its declaration of taking or abandon the proceedings, the condemning authority must either file its declaration of taking and deposit the funds with court, or abandon the action. The trial court has the discretion to extend the deadline to file the declaration of taking and to deposit the funds for an additional three months after the filing of the application. However, this is the deadline. In the event the condemning authority does not file its declaration of taking within six months of the filing of the complaint, a prudent condemnee should immediately file an application to compel the taking and deposit of funds (assuming it is not appealing or otherwise litigating the right to take). This would provide a property owner with more certainty as to the outcome in regards to the ownership of the property.