Recently, the Superior Court of New Jersey affirmed a trial court’s decision finding that New Jersey School Construction Corporation (“NJSCC”) negotiated in good faith prior to filing a condemnation action. New Jersey School Construction Corporation v. Guppy Holdings, LLC, Docket No. A-2831-04T32831-04T3 (App. Div. Oct. 6, 2005). In Guppy Holdings, an individual acquired title to real estate through a tax foreclosure after negotiations for the purchase of the property had begun. The initial offer of $40,000 was based upon an appraisal prepared by the NJSCC. The property owner rejected the offer and questioned the appraisal in light of the fact that the property’s current tax assessment was $179,600. The NJSCC made a final offer which was ignored by the property owner. After the NJSCC filed a complaint to take the property, the property owner filed a motion to dismiss the complaint arguing that the NJSCC failed to negotiate in good faith for the purchase of the property as required by New Jersey law (N.J.S.A. 20:3-6). Under this law, a condemning authority must enter into bonafide negotiations for the purchase of property before filing a lawsuit to condemn property. In denying the motion to dismiss the case, the court held that (1) a tax assessment is not conclusive evidence of valuation in a condemnation proceeding, and (2) the property owner failed to even suggest an amount that would address the deficiencies in the appraisal. The court also noted that a state’s “duty to negotiate in good faith can be tempered by a property owner’s failure to cooperate.” If a property owner intends to challenge a condemnation based upon the condemning authority’s failure to enter into bonafide negotiations prior to filing the complaint, the property owner must not only reply to the initial offer within 14 days, but produce concrete and credible evidence that casts a doubt on the condemning authority’s valuation. Such evidence includes a bank appraisal, offer to purchase the property, and comparable sales that challenges the validity of the appraisal. Technorati Tags: