The New Jersey Appellate Division recently decided a case that addressed the extent to which a property owner can rebuild a structure that constituted part of a pre-existing, nonconforming use under the municipal zoning code. In Motley v. Borough of Seaside Park Zoning Board of Adjustment (decided March 4, 2013), the Appellate Division sided with the municipality, holding that because the property owner's demolition of his nonconforming residence exceeded "partial destruction," the stop-work order issued by the municipality was valid.
This case is noteworthy because New Jersey's Municipal Land Use Law, the statutory framework for real estate development in New Jersey, does not expressly define what constitutes a "partial destruction." N.J.S.A. 40:55D68 provides, in pertinent part: "Any nonconforming use or structure existing at the time of the passage of an ordinance may be continued upon the lot or in the structure so occupied and any such structure may be restored or repaired in the event of partial destruction thereof." The land development ordinances of most municipalities incorporate the statutory language when addressing the repair or maintenance of pre-existing, nonconformities. As such, cases like these are extremely fact-sensitive, but it is essential that the property owner be aware of the legal standards and work collaboratively with the local officials.
In Motley, the plaintiff owned a residential property located in the Borough of Seaside Park's R-3 (Residential) zone, which is restricted to single-family uses. The property contained two structures (a front home and a rear home) that were erected in the 1930s, well before the adoption of the Borough's current zoning ordinance. The front home was damaged after pipes in its hot water system burst and caused significant water damage. The owner applied for a use variance to construct a second floor addition to the home as an expansion of a non-conforming use. The Zoning Board of Adjustment denied the application, citing the numerous pre-existing bulk variances and the rationale that the proposed development would not further legitimate land use goals.
In response, the property owner shifted direction and planned to rehabilitate the home in disrepair. He sought and was issued a zoning permit to allow "repair [and] renovation of [the] existing dwelling" and to allow replacement of the air-conditioning unit. Construction plans were provided with the application. The zoning officer approved the zoning permit application, but noted that there was to be [n]o expansion of [the structure's] dimensions", and "[s]iding, shingles, additional [windows] only – no bumpouts." The owner began the rehabilitation. It became apparent that the water damage was much more significant than anticipated, which would have resulted in the need to replace rotted floor beams and removal of the exterior walls.
The Borough building inspector determined the entire structure was not habitable and determined it needed to be removed. Without involving the zoning officer for his opinion on the impact of a demolition on the protected pre-existing, nonconforming status, the owner proceeded with the demolition down to the original foundations and footings. The owner began new construction and had replaced some of the floor beams and installed new framing. The Borough's code enforcement officer discovered the extent of the demolition and issued a stop work order.
After three public hearings and extensive testimony, the Board denied the owner's request to have the stop-work order vacated on the basis that the extent of the removal exceeded the scope of the zoning approvals granted under the zoning permit. The Board cited the language of the zoning ordinance, which mirrored the statute, on partial demolition. In the Board's view, the demolition of the front building comprised "total destruction," not mere "partial destruction."
The owner challenged the Board's decision in the Superior Court and won, whereupon the trial court lifted the stop-work order and allowed the owner to reconstruct the walls and loft (provided the structure's dimensions were not expanded), but disallowed the expansion of the loft area to constitute a living space. The trial court's rationale centered on the policy considerations of promoting safety code compliance and the replacement of unsafe floor boards and walls. Essentially, the trial court determined that so long as the rehabilitation of the front building remained within the dimensions as existed before, the renovation did not constitute total destruction notwithstanding the demolition to the foundation.
The Appellate Division disagreed with a policy consideration of its own – the law disfavors the continuation of nonconforming uses and structures. As the court noted, "[i]n essence, the test of whether a nonconforming use or structure may be restored or repaired is whether there has been some quantity of destruction that surpasses mere partial destruction." There is no bright-line percentage test on how much of a structure needs to be destroyed in order to constitute partial versus total destruction (Note: It is commonplace to have such standards in a commercial or industrial lease, which is acceptable). The court also admonished the property owner for seemingly allowing the property to fall into a state of disrepair, and for the apparently lack of specificity and clarity in the construction drawings submitted to the zoning officer for review in conjunction with the issuance of the permit.
On a related note, the Appellate Division affirmed the trial court's refusal to lift the stop-work order based upon the owner's argument of "equitable estoppel." Under this theory, where a party properly relies in good faith on a governmental action (here, the issuance of zoning and construction permits), and the governmental official acted in good faith in the performance of his or her duty, but that the decision was ultimately incorrect, the government is estopped (i.e. barred) from reversing its decision to the detriment of the relying party. Here, the Appellate Division was unconvinced that the owner acted with good faith reliance on the issuance of the zoning and building permits and noted that the owner could have consulted the zoning officer before removing flooring, walls and beginning to erect new walls. The court further noted that equitable estoppel is rarely invoked against a governmental entity.
Of course, municipalities are empowered under the Municipal Land Use Law to adopt ordinances to specifically address the partial versus total destruction matter. The court's decision states in a footnote that the rear building of this property was damaged by Superstorm Sandy. As the shore communities continue to recover from the effects of Sandy, one should keep a watchful eye as to how the governing bodies address rebuilding efforts for pre-existing, nonconforming properties.
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