On appeal from the Superior Court of New Jersey, Law Division, Middlesex County.
Judges Gaulkin, Havey and Skillman. Havey, J.A.D., concurring and dissenting.
Plaintiff appeals from a judgment affirming defendant Edison Township Board of Adjustment's (Board) denial of its application for a hardship variance. We reverse and remand to the Board for further proceedings.
Plaintiff is a builder and contract purchaser of an undersized 50' x 151' lot situated in the R-BB zone under Edison Township's zoning ordinance. The current owner, Judith Elliott, has owned the lot since 1935 when the lot conformed to the then existing bulk standards.
Plaintiff applied to the Board for the following bulk variances in order to construct a residential dwelling on the lot: 10,000 sq. ft. lot area required, 7,500 sq. ft. proposed; 85' lot width required, 50' proposed; 25' total side yard setback required, 22.33' proposed. At the hearing Elliott testified that her daughter attempted in 1970 to purchase an adjoining vacant lot from the township but was rebuffed because sewers were not yet available in the area. Eugene Kowitski, plaintiff's president, stated that he attempted to purchase the lot in January 1989 but did not receive a reply from the adjoining property
owner. He did not inquire about the availability of land on the other side of plaintiff's lot, owned by Carlton and Winsomb Barnes, because their house was only 10' to 18' from the property line.
Samuel Carroll, the owner of the vacant lot adjoining the subject property, testified that he purchased the lot from the township in 1973 and never wished to sell it, but that at some time prior to plaintiff's variance application, he offered to buy the property for $20,000 and was told that the asking price was $68,000. Carroll was unwilling to buy the property at that price. Mr. and Mrs. Barnes, who built their residence on the lot on the other side of plaintiff's lot, stated that they were offered the property for $60,000, but were not interested in buying it, at least "not for that price."
Plaintiff's expert, Ronald Yaros, a licensed real estate broker, stated that residences in the neighborhood vary in size and value, "ranging from anywhere to about $350,000." He noted that the area was "probably one of the most sought after sections of Edison Township." He also testified that a 6,400 sq. ft. lot in the neighborhood had recently been "approved for a building." It was his view that the subject lot could be developed as proposed without being a detriment to property values in the area. However, several objectors testified that a small house on the substandard lot would be inconsistent with existing dwellings in the area and would reduce property values.
In denying the application, the Board found that plaintiff had failed to show hardship. Specifically, it determined that plaintiff's effort to sell the subject property was "insufficient" and that any offers plaintiff or Elliott had made were "unreasonable." The Board also concluded that there was "adjoining land available . . . since both adjoining parcels were purchased from the Township . . . and although a recent attempt was made by the contract purchaser there were insufficient attempts made by the present owner." As to the negative criteria, the Board concluded that the requested variances
would have an adverse impact on surrounding property values and would substantially impair the intent and purpose of the zone plan and zoning ordinance. Specifically, the Board noted that the grant of the variances would allow the owners of other vacant 50' lots in the neighborhood to argue that they were entitled to variances based on the grant of the variances in this case.
The trial court agreed with the Board that plaintiff had failed to show undue hardship because it had not made good faith efforts to either acquire adjoining property or sell the subject property. The court also found that the negative criteria were not satisfied because the variance would set a bad precedent with respect to other undersized lots in the area.
To receive a variance under N.J.S.A. 40:55D-70c(1), an applicant must first establish that "exceptional and undue hardship" will result if the variance is not granted (the positive criteria), and that the variance will not result in a substantial detriment to the public good or the zone plan (the negative criteria). Underlying the request for a hardship variance, particularly in an isolated lot case, "is the premise that without such relief the property will be zoned into inutility." Davis Enters. v. Karpf, 105 N.J. 476, 481 (1987). If it is feasible for the owner of the lot to purchase property from adjoining landowners, or if the owner refuses to sell the lot at a "fair and reasonable" price, the owner might not suffer "undue hardship." Gougeon v. Board of Adjustment of Borough of Stone Harbor, 52 N.J. 212, 224 (1968).
We recognize the presumption of validity accorded the Board's denial of plaintiff's variance application. See Kramer v. Board of Adjustment, Sea Girt, 45 N.J. 268, 285 (1965). We also recognize that it is the applicant who bears the burden of proving both the positive and negative criteria under N.J.S.A. 40:55D-70c(1). See Nash v. Board of Adjustment of Township of Morris, 96 N.J. 97, 102 (1984). However, the proofs adduced by the parties, and the
findings made by the Board as to both the positive and negative criteria are, in our view, lacking in several material respects. Thus, a remand for a new hearing is necessary.
As to the negative criteria, the testimony presented by plaintiff and the objectors was at best conclusory. The record does not indicate whether the proposed dwelling would adversely affect the aesthetics and character of the neighborhood, since plaintiff did not submit detailed plans demonstrating the dwelling's compliance with the building code and adequately describing its appearance. See Commons v. Westwood Zoning Bd. of Adjustment, 81 N.J. 597, 611 (1980). "If the size and layout of the proposed house would have adversely affected the character of the neighborhood, both with respect to a 'desirable visual environment,' N.J.S.A. 40:55D-2(i), and the value of the neighborhood properties, a board may justly conclude that a variance should not be granted." Id. at 610.
As to the positive criteria, the record does not indicate whether the sale of the lot to plaintiff is conditioned upon plaintiff obtaining all necessary variances. Indeed, the agreement between Elliott and plaintiff was never entered into evidence, and thus the record does not disclose the contract price for the property. If the contract is conditional, it is Elliott and not the plaintiff who would suffer the hardship if the variances were not granted, and if Barnes or Carroll offered to purchase the lot for an amount equal to or in excess of the contract price, Elliott would not suffer a hardship. As we noted in Allen v. Hopewell Tp. Zoning Bd. of Adjustment, 227 N.J. Super. 574, 592 (App. Div.), certif. denied, 113 N.J. 655 (1988):
It appears to us that the market value of an isolated undersized lot, under contract of sale on condition that the necessary variances are obtained, is the purchase price contained in that contract so that an offer by an adjoining property owner to pay an amount in excess of that contract price should be considered by the board in determining whether the owner will suffer a confiscatory loss if the variances are denied.
Thus, the terms of the agreement between Elliott and plaintiff may be relevant to the Board's resolution of the hardship issue.*fn1
Furthermore, neither the applicant nor the objectors presented any evidence regarding the fair market value of the property. Consequently, the Board made no findings on this issue but rather simply concluded that there had been "insufficient attempts to sell the subject property to adjoining land owners" and that any "offer to sell to the adjoining property owners was unreasonable and apparently not negotiable." Absent evidence of the fair market value of the property and a comparison of that value with any offers made by adjoining property owners, the Board could not determine whether plaintiff suffered a hardship. The matter must therefore be remanded so that proof of value may be offered. See Gougeon v. Board of Adjustment of Borough of Stone Harbor, supra, 52 N.J. at 224.
However, the members of the panel disagree with respect to the approach the Board should follow in determining the fair market value of the property in order to decide whether "exceptional and undue hardship" will result if the variance is denied. Therefore, ...