On appeal from Superior Court of New Jersey, Law Division, Warren County.
Gaulkin, Shebell and Skillman. The opinion of the court was delivered by Skillman, J.A.D.
[244 NJSuper Page 515] The issue presented by this appeal is whether the Municipal Land Use Law authorizes a municipality to adopt an ordinance which requires a developer to install site improvements before its application for final subdivision approval will be considered.
Plaintiff Toll Bros., Inc. contracted to purchase approximately 100 acres of land in Greenwich Township, Warren County, contingent upon its receipt of final subdivision approval. Defendant Greenwich Planning Board (the Board) granted plaintiff's application for preliminary major subdivision approval, but conditioned its approval upon plaintiff constructing, subject to any exceptions allowed by the township engineer, "all improvements on the site including, but not limited to proposed roadways, stormwater management basins, structures and appurtenant facilities, utilities, curbs and sidewalks." This condition was based upon a Greenwich ordinance which requires a developer to install all improvements, except for sidewalks, the final pavement course of streets, monuments, street signs, shade trees and "any other improvements . . . the planning board shall, in its discretion, deem to be appropriately the subject of a performance guarantee to insure later installation," before its application for final subdivision approval will be considered.
Plaintiff applied for a waiver of the requirement that it install site improvements before the Board would consider its application for final subdivision approval, which the Board denied. Plaintiff then filed a prerogative writ action against the Board, Greenwich Township and its Mayor and Township Committee, challenging the validity of the Greenwich ordinance. The trial court granted plaintiff's motion for summary judgment, concluding that the requirement that a developer install improvements before the Board will consider its application for final subdivision approval violates the Municipal Land Use Law (MLUL), N.J.S.A. 40:55D-1 to -129. Accordingly, the court entered final judgment invalidating the ordinance and requiring the Board to accept a performance guarantee for the improvements plaintiff is required to install.
The Mayor and Township Committee and the Board filed separate appeals from the judgment, which we consolidated on our own motion. After we denied the Board's motion for a stay pending appeal, it approved plaintiff's application for final
subdivision approval. Plaintiff then filed a motion to dismiss the appeal on the ground of mootness, which we denied.
The section of the MLUL governing a developer's obligation to provide for the installation of improvements is N.J.S.A. 40:55D-53(a)(1), which provides in pertinent part:
Before recording of final subdivision plats . . . the approving authority may require and shall accept in accordance with the standards adopted by ordinance for the purpose of assuring the installation and maintenance of on-tract improvements:
(1) The furnishing of a performance guarantee in favor of the municipality in an amount not to exceed 120% of the cost of installation for improvements it may deem necessary or appropriate. . . . [emphasis added].
We interpret the underscored language of N.J.S.A. 40:55D-53(a)(1), providing that a municipal land use agency not only may require but "shall accept" the furnishing of a performance guarantee "for the purpose of assuring the installation . . . of on-tract improvements," as a legislative directive that a municipality must accept a performance guarantee as a developer's assurance of the fulfillment of its obligation to construct the improvements required as a condition of subdivision approval. We reject the Board's view that N.J.S.A. 40:55D-53(a)(1) simply confers an option upon a municipality to allow developers to furnish performance guarantees for improvements, because this interpretation would effectively read the words "shall accept" out of the statute, contrary to the well established principle that "full effect should be given, if possible, to every word of a statute." Gabin v. Skyline Cabana Club, 54 N.J. 550, 555, 258 A.2d 6 (1969). We also consider it highly improbable that the Legislature intended to authorize a municipality to require a developer to install costly improvements before the developer had received final subdivision approval and thereby had been assured of the feasibility of proceeding with its entire project.
This interpretation of N.J.S.A. 40:55D-53(a)(1) is supported by a leading treatise in the land use ...