On April 9, 2009, the New Jersey Supreme Court reversed the decision of the Appellate Division in a case analyzing a condemning authority’s obligation to reimburse a property owner for legal fees and expenses in a condemnation case. Township of West Orange v. 769 Associates, LLC, ___, N.J. __ WL. 962687 (2009). The New Jersey Supreme Court held that a property owner is entitled to reimbursement of his or her attorney fees and expenses as a matter of right once a condemnation complaint is filed and later abandoned by the condemning authority. More importantly, New Jersey Supreme Court held that the property owner may recover attorney fees and other professional fees incurred prior to the complaint being filed providing the attorney fees and expenses are directly related to the government’s efforts to acquire the property. In this particular case, the Court found that the date of the accrual of the right to recover attorney fees and expenses was the date the Township adopted an ordinance authorizing the municipality to acquire the property by eminent domain. The New Jersey Supreme Court also discussed the criteria to be used by a court in evaluating the amount of attorney fees and expenses to be awarded.
This is a very important case for property owners since it makes it clear that attorney fees and expenses can be recovered in the event the government files a condemnation action and later abandons the taking. However, if a property owner spends a substantial amount of time and money negotiating with the condemning authority and the complaint is never filed, there is no right to recover attorney fees and expenses. A complaint must be filed. In addition, property owners may now look to recover attorney fees and expenses incurred prior to the filing of the complaint providing the attorney fees and expenses are directly related to the taking of the property and are incurred after the property is targeted for condemnation.