Appeals Court Gives Property Owners Greater Protection From Eminent Domain Abuses

Public Advocate Ronald K. Chen today praised the Appellate Division's landmark eminent domain ruling that guarantees property owners greater protections when their property is targeted for condemnation so it can be redeveloped by another private party.

In a published opinion, the appeals panel held that the "government has an overriding obligation to deal forthrightly and fairly with property owners."  The Public Advocate participated in the case as amicus curiae, or "friend of the court," and Chen personally presented oral argument to the court on February 4.

Under the New Jersey Constitution, a municipality may take private property from one owner and transfer it to another for redevelopment only if it is in a "blighted area."  The "public purpose" of such a taking is to stop the spread of the deterioration and clear up the blight.

The decision today in Harrison Redevelopment Agency v. DeRose makes clear that a property owner retains the right to challenge a blight designation until the last stages of the redevelopment process when the municipality exercises its power to condemn the property through eminent domain.  The Township of Harrison, like many other municipalities around the State, had argued that property owners lose the right to make such a challenge years earlier, around the time when the area is declared to be blighted or "in need of redevelopment."

The ruling applies to any challenge to eminent domain that is still active in the court system, and could lead to reopening disputes over blight designations in other pending cases.

The court held that, if a municipality wants to settle the legality of a blight designation earlier in the redevelopment process, it must go beyond the requirements of the current statute governing redevelopment and provide individualized written notice to all owners in the targeted area.  That notice must inform the owner (1) that his or her property has been designated for redevelopment, (2) that this designation authorizes the municipality to take the property against the owner's will, and (3) that the owner has 45 days to challenge the designation in Superior Court.  Only owners who receive such notice may lose the right to challenge a blight designation later in the process, and even in such cases, the courts may exercise their discretion to extend the time "in the interest of justice."

"The ruling essentially requires local officials to be up front and honest with property owners when they target an area for private redevelopment.  The appeals panel recognized that it needed to level the playing field.  Current law is flawed because it does not require clear notice to property owners that the town could take their property against their will," Chen said.

The rulings in the Harrison appeals reverse the trial court and give three business owners the opportunity to contest the taking of their property for a private redevelopment project.  The decision also resolves conflicting unpublished opinions by appeals panels and trial courts as to what due process protections property owners have when their property is targeted for redevelopment.

The appeals panel found that the notice provisions contained in the Local Redevelopment and Housing Law (LRHL), the state's redevelopment statute, are "spotty and incomplete" and lack "any individualized mechanism to assure that property owners are fairly informed that the blight designation . . . will authorize the government to condemn their properties."  The LRHL currently requires direct notice to property owners only of the planning board's initial public hearing on whether to designate the area as in need of redevelopment.
 
The court therefore rejected Harrison's argument that simply citing the LRHL is sufficient to give notice to ordinary citizens that their land may be taken by eminent domain.  The court noted that "Laypersons who receive such a notice cannot reasonably be expected to understand the drastic and permanent consequences of a municipality including their property within an area designated for redevelopment."  The court also found that "the euphemistic term 'redevelopment' itself has the capacity to lull an uninformed citizen into presuming that such activity will be personally beneficial, without realizing that the concept also signifies that he or she may be ousted from home or business at the government's pleasure."

In its June ruling in Gallenthin v. Paulsboro, the New Jersey Supreme Court narrowed the overly broad definition of an "area in need of redevelopment" under the LRHL.  "Today's decision builds upon the Supreme Court's ruling in Gallenthin by ensuring that property owners have a meaningful opportunity to challenge a blight designation," Chen said.

The appeals panel found that the facts in the Harrison cases were "an apt illustration of the dangers of a municipality withholding from the public the bad news that at times may accompany the potential good news promised by redevelopment" and held that "in dealing with the public, the government must turn square corners."

In addition to the Paulsboro and Harrison cases, the Public Advocate has participated in litigation involving the use of eminent domain in two other communities, Long Branch and Lodi.  In Lodi, an appeals panel ruled in favor of property owners who were seeking to save their homes.  The Long Branch case involves residents of a beachfront neighborhood.  Like the business owners in Harrison, the Long Branch homeowners allege that the town did not provide clear notice to them that their homes might be seized through eminent domain and instead misled them about plans for their neighborhood.  The Appellate Division has not yet scheduled oral argument in the Long Branch appeal.

The Department also is engaged in an ongoing investigation into redevelopment efforts in the Mount Holly Gardens neighborhood in Mount Holly.  In that community, residents and an advocacy group called Citizens in Action sued the township claiming, among other things, that their neighborhood is not blighted, the redevelopment plan would have a discriminatory impact, the township has not planned adequately for their relocation, and the plan will lead to the loss of a significant amount of the town's affordable housing in violation of the Mount Laurel doctrine.  The New Jersey Supreme Court has declined to hear the residents' appeal in that case, and demolitions are under way in Mount Holly Gardens.

Finally, the Department continues to work with leaders in the Legislature, including Senator Ronald Rice and Assemblyman John Burzichelli, to promote comprehensive reform of New Jersey's redevelopment law.

Click here for more information on the Department's efforts on eminent domain reform

Click here to read the Public Advocate's amicus brief

Read the Harrison Decision, 2/25/08


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