march 2008
Due process issue in condemnation actions puts municipalities on notice; arms property owners with new defense.
BACKGROUND
The New Jersey Appellate Division, in its February 2008 decision in Harrison Redevelopment Agency v. DeRose, has ruled that the notice requirements contained in the Local Redevelopment and Housing Law (LRHL) concerning the designation of redevelopment areas and the adoption of municipal redevelopment plans do not sufficiently comply with the constitutional guarantees of due process.
The Court held that due process requires a municipality to provide a property owner with contemporaneous written notice specifically informing the owner that:
The property has been designated for redevelopment The redevelopment designation triggers the power of condemnation and authorizes the municipality to acquire the property against the owner’s will The owner may take legal action to contest the redevelopment designation within 45 days of the municipality adopting the designation
The Court ruled that in the absence of such adequate notice, the property owner’s right to challenge the redevelopment designation in a years later condemnation is preserved.
HARRISON V. DeROSE
In the condemnation action by Harrison to acquire the DeRose property for redevelopment purposes, the property owners sought to challenge the taking on the basis that the LRHL notice provisions did not meet the requirements of due process and were therefore unconstitutional. In addition, the owners argued that their property did not meet the necessary criteria to be in a redevelopment area.
The LRHL, as written, requires only public notice of municipal redevelopment actions, except for the initial planning board hearing on the preliminary investigation as to whether the board should recommend that the area be declared in need of redevelopment, and in instances where a property owner has filed a written objection before the planning board. The Town of Harrison complied with these requirements.
The trial court had agreed with the municipality that the property owners’ challenge was time-barred and should have been raised years earlier, within 45 days of designation of the redevelopment area and adoption of the redevelopment plan. The Appellate Division, while acknowledging the substantial passage of time and monetary investment associated with the redevelopment, was nonetheless constrained by the constitutional mandates of due process.
The Court accordingly reversed the trial court’s decision and remanded the matter for a hearing on the merits of the property owner’s contention that the proposed taking of his property for redevelopment violates both the LRHL and the criteria for redevelopment as construed by the New Jersey Supreme Court in the 2007 landmark Gallenthin v. Paulsboro decision.
WHAT YOU SHOULD KNOW
The DeRose decision has armed property owners with the defense to a proposed condemnation action by reason of deficient notice, despite municipalities having complied with the literal notice provision requirements of the LRHL. The decision opens the door for property owners to challenge the validity of redevelopment designations years down the road.
Developers, municipal officials and property owners should note that this decision will likely render pending redevelopment projects requiring the power of condemnation uncertain. At particular risk are redevelopment designations in instances where the municipality may not be able to sustain the position that a property’s blight declaration or inclusion in a redevelopment area is necessary for overall redevelopment and supported by substantial evidence.
If you have any questions concerning the exercise of municipal redevelopment power and condemnation for redevelopment purposes, please contact John J. Reilly.