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Wildwood Storage Center Inc. v. Mayor and Council

Decided: December 1, 1992.


On appeal from the Superior Court of New Jersey, Law Division, Cape May County.

King, Landau and Thomas. The opinion of the court was delivered by King, P.J.A.D.


This case concerns the right of a municipality to condition the issuance of a mercantile license, issued to property owners for the business purpose of renting properties, upon payment of their delinquent real estate taxes. We conclude that N.J.S.A. 40:52-1.2 permits the municipality to insist on payment of delinquent taxes before issuing property owners a license to rent their properties. We reverse the ruling of the Law Division.

This is the statute we are called upon to interpret:

Except as provided herein, the governing body of a municipality may, by ordinance, as a condition for the issuance or renewal of any license or permit issued by, or requiring the approval of, the municipality, require that the applicant, if he is the owner thereof, pay any delinquent property taxes or assessments on the property wherein the business or activity for which the license or permit is sought or wherein the business or activity is to be conducted. The ordinance may also provide for the revocation or suspension of a license or permit when any licensee, who is an owner of the property upon which the licensed business or activity is conducted, has failed to pay the taxes due on the property for at least three consecutive quarters. Upon payment of the delinquent taxes or assessments, the license or permit shall be restored. The provisions of this section shall not apply to or include any alcoholic beverage license or permit issued pursuant to the "Alcoholic Beverage Control Act," R.S. 33:1-1 et seq. [ N.J.S.A. 40:52-1.2; L. 1987, c. 174 § 1; emphasis supplied.]

The italicized language is at the core of this dispute. As the Senate, County and Municipal Government Committee Statement accompanying the statute states, the statute "permits a municipality to require that an applicant for certain licenses or permits pay any property taxes and assessments due on the property if the applicant is the owner of the property whereon the licensed or permitted business or activity is to be conducted." Committee Statement, N.J. Assembly Bill No. 577, L. 1987, c. 174. The ordinance may also provide for revocation or suspension of licenses or permits upon delinquencies of at least nine months. Id. The statute does not apply to alcoholic beverage licenses. The Committee Statement also alludes to cognate provisions in the Municipal Land Use Law, N.J.S.A. 40:55D-1 to -129, which authorize municipalities to adopt local

ordinances which condition the issuance of planning and zoning board approvals on payment of delinquent taxes or assessments.

The pertinent local legislation is the City of Wildwood's Ordinance 55-84, enacted on September 5, 1984, recorded at Wildwood, N.J.Rev.Gen.Ordinances § 2-28.2 which says in relevant part:

No Mercantile License, . . . shall be issued to any person, persons or corporation seeking to operate any business which requires the issuance of such license . . . unless the Applicant therefor has first submitted sufficient proof . . . that there are no delinquent local real property taxes outstanding upon the land and/or premises upon which the business applying for such . . . License shall be proposed to operate within the City of Wildwood.

The City's ordinances prohibit conducting any business without a mercantile license. Rev.Gen.Ordinance § 7-1.1. The definition of "conducting a business" within the City of Wildwood specifically includes "the rental of sleeping accommodations, and the rental of all other real property." Id. at § 7.7-2a. The "rental of real property" is thus a "classified business" requiring a mercantile license in the City of Wildwood. We see no impediment to the City's decision here to license the rental of all real property under N.J.S.A. 40:52-1's general licensing powers which specifically include many enumerated businesses such as living facilities, various types of stores, places of public accommodation and generically "all other kinds of business conducted in the municipality other than herein mentioned, and the places and premises in or at which the business is conducted or carried on . . . ." N.J.S.A. 40:52-1(g). This enabling language is all embracing.

The plaintiffs here are three corporations and one partnership which own commercial properties in Wildwood. Plaintiffs rent their properties to tenants which operate businesses at the leased premises. The tenants include: the Old Philadelphia Pretzel Co., a pretzel manufacturer; the New Jersey Transit Corp., a bus station operator; and Regatta Motel, Inc., and Thomas DiDonato, parking lot ...

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