This case represents one of the growing number of prerogative writs actions involving so-called isolated lots. In the typical scenario such lots have been rendered undersized by the upgrading of zoning requirements. No adjacent property is available to bring the lot into conformity with the ordinance. At one time, the value of these lots did not justify the investment involved in pursuing the required variances or engaging in the appeals so frequently necessitated by local resistance to such requests. However, as real estate values escalated pricing conforming parcels beyond the reach of many buyers, these formerly unwanted lots have taken on a new value. It has become worthwhile to apply for a variance.
Because there are so many lots of this type and local officials frequently perceive approval of these variance requests as downgrading the community, this court is constantly and increasingly being faced with appeals from denials of such applications. Despite even the best efforts of the board attorneys and a long line of Supreme Court decisions, zoning boards continue to insist that they are without adequate guidance concerning the applicant's burden of proof, the applicant's right to some effective use of the property and the board's obligation
to participate in the resolution of this special type of case. The purpose of this opinion is to provide guidance in this case and the many like it as to how these matters should be presented to the zoning board, how the board should evaluate the proofs, what the extent of the board's obligation is to explore the facts on its own and finally, what the limits are on the board's right to deny such applications.
Plaintiff, James Dallmeyer, is the contract purchaser of land in Lacey Township. The property is located in an R-75 zone, which requires a lot area of 7,500 square feet and a lot width of 75 feet. The lot is nonconforming because it has a lot area of 5,000 square feet and a width of 50 feet. Plaintiff made application to the defendant for a variance pursuant to N.J.S.A. 40:55D-70(c)(1) to construct a single family residence. The proposed house would comply with all side yard and set back requirements. The lots on either side of plaintiff's lot are conforming but a conveyance of any portion of them to the plaintiff would render them nonconforming.
Following a hearing on plaintiff's application the Board voted to deny the variance. In its memorializing resolution, the Board found that the failure to grant the requested variance would not create an undue hardship and that the relief requested could not be granted without substantial detriment to the public good and without substantially impairing the intent and purpose of the zone plan and the zoning ordinance. Plaintiff instituted this action seeking a reversal of the Board's decision.
This court's role in reviewing determinations of local planning or zoning boards is clearly defined by case law. Such boards are independent administrative bodies acting in a quasi-judicial manner. Dolan v. DeCapua, 16 N.J. 599, 612 (1954). Their powers stem directly from statutory authority. Duffcon Concrete Products, Inc. v. Cresskill Bor., 1 N.J. 509, 515-16 (1949). Accordingly, a trial court must view the board's actions as being presumptively correct. Rexon v. Haddonfield Bd. of Adj., 10 N.J. 1 (1952). Because of their peculiar knowledge of
local conditions, they must be allowed wide latitude in their delegated discretion. Ward v. Scott, 16 N.J. 16, 23 (1954). The burden of proof rests with the challenging party and the standard of review is whether or not the decision can be found to be arbitrary, capricious or unreasonable. Kramer v. Sea Girt Bd. of Adj., 45 N.J. 268 (1965). That decision must be made on the basis of what was before the board not on the basis of a trial de novo. To receive a variance under N.J.S.A. 40:55D-70(c)(1), an applicant must satisfy two criteria. First it must be shown that exceptional or undue hardship will result if the variance is not granted, the positive criteria. Additionally, it must be shown that the variance will not result in a substantial detriment to the public good or the zoning plan, the negative criteria.
Our Supreme Court has addressed, in a long line of decisions, the problems that are encountered in an isolated lot case. Harrington Glen, Inc. v. Leonia Bd. of Adj., 52 N.J. 22 (1968); Gougeon v. Stone Harbor Bor., 52 N.J. 212 (1968) (Gougeon I); Gougeon v. Stone Harbor Bd. of Adj., 54 N.J. 138 (1969) (Gougeon II); Chirichello v. Monmouth Beach Zoning Bd. Adj., 78 N.J. 544 (1979); Commons v. Westwood Zoning Bd., 81 N.J. 597 (1980); Nash v. Morris Bd. of Adj., 96 N.J. 97 (1984). These cases establish that the efforts the property owner has made to bring the property into compliance with the zoning ordinance either by sale of the property to an adjacent owner or by acquisition of property from an adjacent owner should be considered when evaluating undue hardship. If it is feasible to purchase property from an adjoining owner, or if the owner of the undersized lot refuses to sell the property to an adjoining owner at a "fair and reasonable" price, the owner might not suffer an "undue hardship". Gougeon I, 52 N.J. at 224. Conversely, if the adjacent property is not available or the applicant is willing to sell at a "fair and reasonable" price and an adjoining property owner refuses to make a reasonable offer, then "undue hardship" generally exists. Commons, 81 N.J. at 606. The Court in Nash determined that
"the proper standard of valuation in deciding the fair price to be offered to an owner to avoid hardship under N.J.S.A. 40:55D-70(c) is the fair market value of the property assuming that all necessary variances have been granted." 96 N.J. at 107. It is to be emphasized that the availability or unavailability of adjacent property or the willingness or unwillingness of the owner to buy or sell are factors the board must consider. They are not necessarily controlling. Gougeon I, 52 N.J. at 224; Gougeon II, 54 N.J. at 148-49.*fn1
In this case the Board gives two reasons to support its finding that undue hardship does not exist. It asserts that "[t]here is not sufficient evidence to show that a substantial good faith effort was made to contact one of the adjoining owners in the effort to sell them the subject property." However, the record demonstrates that the plaintiff's real estate agent contacted the adjoining property owners by certified mail on two occasions prior to the hearing. The agent advised the owners that they may purchase the subject property. He received no response to these inquiries. Additionally, plaintiff again offered the lot to an objector who appeared at the hearing.
The other reason the Board gives for finding that undue hardship does not exist is that "[t]he hardship is in fact self-created by the owner." Apparently, the Board believed that one who buys an undersized lot creates a hardship. However, it has long been established that if neither the person who owned the lot when the zoning ordinance making it undersized
was adopted nor a subsequent owner did anything to create the condition for which the variance is sought, a right to relief possessed by the original owner passes to the successor in title. Wilson v. Mountainside Bor., 42 N.J. 426, 452-53 (1964). That right is not lost simply because the succeeding owner bought or contracted to buy with knowledge of the lot size restriction. Harrington Glen, Inc., 52 N.J. ...