On appeal from the Superior Court of New Jersey, Law Division, Cumberland County whose opinion is reported at N.J. Super. .
Bilder, Stern and Keefe. The opinion of the court was delivered by Keefe, J.A.D.
The issue to be decided is whether an ordinance requiring the seller of land containing a structure to obtain a certificate of occupancy prior to sale regardless of its intended use by the prospective buyer is invalid as applied to defendant Seabrook Housing Corporation (Seabrook). We hold that it is and affirm the dismissal of the municipal court complaint against Seabrook.
The facts are not disputed. On September 3, 1987 Upper Deerfield Township (the Township) adopted the "Boca National Existing Structures Code/1987, Second Edition," which was incorporated into Chapter 50 of the Township Code and known as the "Existing Structures Code." Upper Deerfield, N.J., Code ch. 50, art. I, § 1 (1989). On September 7, 1989 the
Township adopted an amendment to the Existing Structures Code which is the focal point of this proceeding. The amendment was designated as Chapter 50-7 (hereinafter referred to as § 7) and entitled "Certificate of Occupancy." The ordinance in relevant part provides:
a. No owner or agent thereof shall hereafter sell, rent, lease or let to any person or persons, whether or not for a consideration, any dwelling, dwelling unit, commercial, office, industrial, warehousing or storage, assembly or recreational space of facility within any structure or building, or premises, except vacant land for agricultural purposes, unless a Certificate of Occupancy shall first have been obtained from the Housing Officer. Said Certificate shall certify that the building or unit, premises or combination thereof is fit for human habitation and complies with the requirements of all ordinances of the Township of Upper Deerfield which relate to purposes of use thereof . . . .
Upper Deerfield, N.J., Code ch. 50, art. III, § 7 (1989).
On August 28, 1989, Seabrook entered into an agreement to sell a parcel of land it owned in the Township containing a house that had been vacant for 15 years. On November 15, 1989, Seabrook transferred title to this property to the purchaser without obtaining a certificate of occupancy as required by § 7 of the Township code. Instead, the purchaser by contract assumed the obligation of obtaining a certificate of occupancy and making any repairs required by the Township.
When the Housing Officer of the Township became aware of the sale, Seabrook was charged with a violation of the ordinance. Seabrook was found guilty in the Township Municipal Court. It was fined $100 and $25 court cost and ordered to comply with the ordinance within two weeks. On Seabrook's application for a de novo trial in the Law Division, the Judge raised the issue of the constitutionality of the ordinance and requested the parties to brief the issue. Subsequently, the Judge found that § 7 was invalid. He concluded that the ordinance was overbroad in its regulatory reach because in "requiring an occupancy permit before an abandoned vacant structure may be sold [the ordinance] does not bear a real and substantial relationship to a legitimate government purpose." 255 N.J. Super. 682, 689, 605 A.2d 1160, 1163 (Law Div.1991).
In Town of Phillipsburg v. Schultz, 244 N.J. Super. 715, 583 A.2d 419 (Law Div.1990), a case cited by the Law Division Judge in this matter, the court struck down a Phillipsburg ordinance similar to the one in question. The Judge in that case interpreted the Phillipsburg ordinance to prevent a sale of property without an occupancy permit. He noted that the literal application of the ordinance would prevent transfers of title in many situations in which the seller simply did not have the means available to make the repairs necessary to meet the standards of habitability.
Builders unable to complete construction of residences or apartments, due to financial or other problems, would be unable to unload -- to sell their interest to some other party. Heirs and devises would be unable to sell their interest in a property if it was not habitable. An owner's right to sell any but habitable buildings would be prohibited.
Id. at 717, 583 A.2d 419. In order to correct the evil perceived from the application of the ordinance in all cases, the Judge concluded that an ordinance which in any way regulated the sale of residential property was beyond the police power of the municipality. The court's Conclusion was based upon an interpretation of N.J.S.A. 40:48-2.12m which provides that a municipality may adopt an ordinance requiring the owner of residential rental property to obtain a certificate of "inspection or occupancy" for the property prior to rental or lease involving a new occupancy. The Judge reasoned that, because the Legislature did not specifically authorize a municipality to adopt an ordinance requiring a certificate of occupancy with respect to the sale of property containing a structure, there was a legislative intent not to grant such authority. He concluded that because "a municipality is but 'a creature of the State, capable of exercising only those powers granted to it by the Legislature' the municipality had no authority to regulate the sale of property by requiring pre-sale inspections." Id. (quoting Moyant v. Borough of Paramus, 30 N.J. 528, 154 A.2d 9 (1959)).
While we agree with the result in Town of Phillipsburg v. Schultz, supra, we disagree with its apparent Conclusion that a municipality lacks the power ...