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Hilton Acres v. Klein

Decided: October 23, 1961.


For modification -- Chief Justice Weintraub, and Justices Jacobs, Francis, Proctor, Hall, Schettino and Haneman. Opposed -- None. The opinion of the court was delivered by Hall, J.


This is a land subdivision regulation case. It is here on certification of the judgment of the Appellate Division, 64 N.J. Super. 281 (1960), granted on plaintiffs' petition. 34 N.J. 329 (1961).

Fundamentally involved are two abstract legal questions arising under the Municipal Planning Act of 1953. N.J.S.A. 40:55-1.1 et seq. Both are novel, but concern the same basic considerations in construing the statute which we set forth in Levin v. Township of Livingston, 35 N.J. 500 (1961), handed down after the Appellate Division had decided this case.

The first question is whether the minimum lot size required by the local zoning ordinance at the time of tentative approval of the subdivision is a "general term or condition" thereof. The act, N.J.S.A. 40:55-1.18, provides that such approval shall confer upon the developer the "right," for a three-year period, "that the general terms and conditions upon which the tentative approval was granted will not be changed." The Appellate Division answered the question in the affirmative, which was in plaintiffs' (the developers') favor.

The second is whether the three-year period may be extended by the municipality. The statute is silent. The local subdivision ordinance authorized the planning board to extend without limit of time, with consequent continued protection to the subdivider. It was held below that no

power to extend existed and that the ordinance provision was consequently void -- a result favoring the municipality, which plaintiffs claim was erroneous.

A third question is also present -- whether, by reason of the peculiar circumstances of the case, plaintiffs are entitled to any relief from the effect of ab initio invalidity of the extension of tentative approval here granted. This issue was decided essentially against the developers by the Appellate Division. A sketch of the factual setting is necessary to make the problem clear.

In June 1956 plaintiffs received tentative approval from the Roxbury Township Planning Board for a large residential development in a rural area. The board possessed full, and not merely recommendatory, power under the ordinance. Approval was expressly made subject to a rather obscure condition, which we will mention more fully later, relating to sanitary sewage disposal. The 254 lots on the plat conformed to the then zoning ordinance requirement of 15,000 square-foot minimum size. The zoning ordinance was amended in November 1956 to require a 30,000 square-foot minimum. Few, if any, of the lots met this minimum. The requirement has been further increased since the commencement of the litigation.

Progress of the development appears to have been slow. In November 1957 the board granted what amounted to final approval for three lots for the purpose of erecting model homes. These were located on the existing highway, which crossed a corner of the tract, at the intersection of a proposed new street leading into the interior. Two such houses were later built, but construction did not commence until September 1958. One of them has since been sold. In July 1958 final approval was voted with respect to some 17 lots fronting on the highway, referred to as Section 1, but plaintiffs never took the necessary perfecting steps and concede it never became effective.

In October 1958, when the original tentative approval still had eight months of its three-year life yet to run,

plaintiffs requested, and the board allowed, an extension thereof until October 1961. In May 1959 final approval was granted as to 25 more lots, called Section 2. These were located on proposed new streets running into the interior of the tract from the location of the model homes. Approval was made subject to plaintiffs' furnishing a bond guaranteeing the installation of improvements required by the subdivision ordinance (streets, street signs, monuments, culverts and storm sewers). The bond had not been fixed in amount or supplied, and so final approval was not complete when the planning board advised plaintiffs on June 7 that its action had been in error because the amended zoning ordinance required lots of a 30,000 square-foot minimum area. This date, purely coincidentally, was exactly three years after the grant of tentative approval, marking the expiration of the statutory period of guarantee against changes in "general terms or conditions." Until this action it does not appear that any question had ever been raised as to the right of plaintiffs to complete the development on the 15,000 square-foot lot size shown on the plat given tentative approval, despite the zoning ordinance upgrading in November 1956. All the applications referred to had been on the basis of lots of that area.

This revocation precipitated the litigation commenced very shortly thereafter. As of that time there had been no building on the tract except the two model homes and little physical preparation of the land beyond the clearing and grading of one of the proposed streets for a relatively short distance and rather minor commencement of some drainage work. Almost all of the 123-acre tract remained in its virgin state.

The pleadings really raised only the first question, i.e., whether a zoning ordinance requirement as to minimum lot size was a "general term or condition" not subject to change for the three-year period. Based on the affirmative of that proposition, the complaint sought, in effect, the setting aside of the revocation of final approval as to Section 2, the

issuance of building permits for those lots after the performance bond for improvements was furnished, and a declaration that plaintiffs were entitled to complete the development on the basis of lots of a 15,000 square-foot minimum despite the zoning ordinance amendment. Defendants' answer took the flat position that a developer is obliged to conform to all minimum lot size changes, no matter when made, i.e., that this is not "a general term or condition" within the meaning of the statute. Both sides moved for summary judgment in the Law Division. Defendants' motion was granted.

The validity of the extension of tentative approval was not questioned by anyone until the Appellate Division posed the issue on its own motion at the oral argument of plaintiffs' appeal. The matter was pertinent to the demand for declaratory relief with respect to the vast area of the development for which final approval had not yet been sought. It also bore on plaintiffs' status concerning Section 2 where final approval had been voted but not perfected prior to the expiration of the original three-year period. In the supplemental briefs submitted, the municipality took the position that the planning act did not empower any extension of tentative approval and so its ordinance permitting such was invalid. Plaintiffs not only urged the contrary on this legal question, but also alternatively contended that their deliberation in proceeding with the development was a result of their reliance on the extension, which they believed gave them until October 1961 to obtain final approval of the balance of the tract. Thus they sought to retain the benefit of the extension on the theory of estoppel, particularly since the township granted it in accordance with its own ordinance and never questioned its own ...

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