An Application for Development Must Include All Checklist Items for Protection of “Time of Application” Rule to Apply, New Jersey Supreme Court Says

The New Jersey Supreme Court ruled today, in a unanimous opinion in a case of first impression captioned Dunbar Homes, Inc. v. Zoning Board of Adjustment of the Township of Franklin, et al., that to receive the protection of the “time of application” rule, an application must comply with the definition of “application for development” in the Municipal Land Use Law (“MLUL”), meaning that it must include all of the items required by the submission checklist which the municipality has adopted by ordinance. This case constitutes the first time the Supreme Court has interpreted the “time of application” rule, and its decision will impact the review of development applications throughout the state.

The MLUL’s “time of application” rule provides that the ordinances and regulations in effect “on the date of submission of an application for development” govern review of that application. This reversed the longstanding “time of decision” rule whereby municipalities could change the zoning regulations at any time prior to the approval of an application for development, even where the change was enacted during a public hearing process specifically for the purpose of derailing a pending application. Under the “time of application” rule, the date upon which “an application for development” was submitted for review is key to determining what ordinances apply to it if the relevant municipal ordinances change.

In Dunbar Homes, plaintiff filed an application seeking a conditional use variance pursuant to N.J.S.A. 40:55D-70(d)(3) to construct garden apartments. A conditional use variance was required because the applicant could not meet the minimum lot size requirement. Plaintiff’s initial submission was missing documents explicitly required by the Township’s Zoning and Subdivision Ordinance which sets forth the application requirements for such an application (the “Ordinance”). The day after submission of the application, the Township adopted an ordinance (which had been previously introduced, following a comprehensive Township-wide review of the Ordinance) which deleted garden apartments as a conditional use and rendered them a non-permitted use in plaintiff’s zone (the “Ordinance Amendment”). In fact, it was the introduction of this ordinance which caused plaintiff Dunbar Homes to quickly prepare an application for development in order to file it before the Ordinance Amendment was enacted, and thereby avail itself of the protection afforded by the “time of application” rule and proceed under the zoning regulations as they existed prior to the Ordinance Amendment.

The Township’s Zoning Officer determined that (i) plaintiff’s application was not complete, and (ii) pursuant to the Ordinance Amendment, plaintiff’s project no longer required merely a conditional use variance, but a d(1) use variance, governed by the more stringent standard set forth in N.J.S.A. 40:55D-70(d)(1). Plaintiff appealed the Zoning Officer’s determination to the Zoning Board of Adjustment pursuant to N.J.S.A. 40:55D-70(a), which affirmed the Zoning Officer’s determination.

Trial Court Decision

Plaintiff filed a complaint in lieu of prerogative writ challenging the Zoning Board of Adjustment’s review of the Zoning Officer’s decision, and the trial court reversed the Zoning Board’s determination. Finding that the application checklists had not been adopted by ordinance, the trial judge applied a standard whereby the “time of application” rule would apply when the materials submitted were sufficient to allow the board to commence a “meaningful review.” The trial judge concluded that the applicant’s submission was sufficient to meet this standard, and ruled that the “time of application” rule applied.

Appellate Division Decision

The Township appealed, arguing that the trial court erred by applying the “time of application” rule to plaintiff’s submission because it failed to include all documents required by the Ordinance, and erred in finding that the application checklists were not adopted by ordinance. The Appellate Division reversed the trial court’s decision, finding the trial court’s proposed “meaningful review” standard to be “fatally imprecise.” It declared in a published decision that the definition of “application for development” in N.J.S.A. 40:55D-3 is the benchmark for this inquiry, and dictates that submission of “the application form and all accompanying documents required by ordinance for approval” – i.e., the “documents . . . [which] are specifically required by the” applicable Ordinance – are what must be submitted to trigger the “time of application” rule. The court stressed that a municipal zoning officer’s determination that a submission falls short of an “application for development,” as defined in N.J.S.A. 40:55D-3, remains subject to review under the arbitrary, capricious, and unreasonable standard. Here, because Plaintiff’s application omitted documents explicitly required by the Ordinance, the Zoning Board’s determination that the “time of application” rule did not apply to the application was not arbitrary, capricious, or unreasonable. Finally, the Appellate Division did not find it necessary to decide whether the application checklists were adopted by ordinance. Our prior blog describing the Appellate Division’s decision in more detail is available here.

Supreme Court Decision

Plaintiff Dunbar Homes petitioned the Supreme Court to reverse the Appellate Division’s decision. Due to the significance of the issue, six parties sought and were granted status as amicus curiae. Aligned with the plaintiff Dunbar Homes in seeking reversal of the Appellate Division’s decision were the New Jersey Builders Association, NAIOP New Jersey Chapter, the International Council of Shopping Centers, and the New Jersey State Bar Association (“NJSBA”). Gibbons drafted the brief for the NJSBA and argued the case on its behalf. Our prior blog following oral argument is available here, and a copy of the brief submitted on behalf of the NJSBA is available here. Aligned with defendants the Zoning Board of Adjustment of Franklin Township and Franklin Township itself in seeking affirmation of the Appellate Division’s decision were the New Jersey State League of Municipalities and the New Jersey Institute of Local Government Attorneys.

The Supreme Court concurred with the Appellate Division’s conclusion that the trial court’s “meaningful review” standard was “fatally imprecise.” It found that the application requirements for the type of application in question set forth in the Ordinance functioned as a checklist, and ruled that an application must submit all of the information and documents so set forth in order to be afforded protection under the “time of application” rule. In this instance, the applicant had not submitted certain of those items and did not request submission waivers. Although not addressed in detail in the Court’s opinion, Dunbar Homes contended that the Township relied on an administrative checklist, so there was a dispute as to whether there existed an applicable checklist adopted by ordinance. In any event, the Court ruled that the Zoning Officer properly determined the application to be “incomplete” and that the protection of the “time of application” rule therefore did not apply.

However, the Court added two caveats which it described as “important practical limits to Board determinations based on an applicant’s failure to include all required materials,” as follows:

(1) “[A]n application is not rendered ‘incomplete’ because a municipality requires ‘correction of any information found to be in error and submission of additional information not specified in the ordinance or any revisions in the accompanying documents’ pursuant to N.J.S.A. 40:55D-10.3. Presumably this means that the “time of application” rule would still apply, although the Court did not explicitly say so.

(2) The applicant may seek submission waivers from information or documents specified in the checklist adopted by ordinance, in which case “[t]he applicant’s submission will provisionally trigger the [“time of application” rule] if a waiver request for one or more items accompanies all other required materials.” If the waiver is granted, the application will be deemed complete (which should mean that the “time of application” rule will apply, although the Court did not explicitly say so), but if the waiver is denied, that decision will be subject to review under the arbitrary, capricious and unreasonable standard (and presumably the “time of application” rule will not apply, although the Court did not explicitly say that either).

The Court’s acknowledgment that requests for submission waivers will not preclude reliance on the “time of application” rule is important because the statute does not specifically address that situation. However, the practical result is that where an application for development seeks one or more submission waivers, the determination as to whether the “time of application” rule applies ends up being vested in the person or entity responsible for acting on waiver requests, which potentially allows denial of a waiver request as a means to block a project by depriving it of the protection afforded by the “time of application” rule. As the Court noted, such a denial is subject to review under the arbitrary, capricious and unreasonable standard.

Takeaways

The Supreme Court’s decision provides clarity concerning what must be submitted to receive the protection from changes in zoning requirements afforded by the “time of application” rule. Its opinion relies on Legislative intent that the MLUL provide for uniformity and predictability in land use decisions. In doing so, the Court gave much less weight to the Legislative intent of the “time of application” rule itself and the fact that the adopted version of the statute referenced an “application for development,” not a “complete application for development” as earlier version of the legislation had done. Thus, the ultimate solution may be legislative if the goal is to provide the protection of the “time of application” rule to applications for development which do not include all of the information and documents required by checklist. Meanwhile, applicants would be well served to carefully review the municipality’s ordinance and checklists and to submit all required items in the specified quantities. Where there is not clarity between the municipal ordinance and the checklists, applicants should comply with both the ordinance and the checklists as closely as possible, to avoid any issues regarding completeness. If any items cannot be submitted, waiver requests setting forth written justification in support of granting them should accompany the application. Finally, applicants may wish to return to the practice some employed prior to enactment of the “time of application” rule of watching public notices and meeting agendas to see if any zoning changes are in the works.