A February 14, 2017 decision of the Appellate Division of New Jersey Superior Court may make it more difficult for developers to gain the benefit of the “time of application” rule enacted by the Legislature in 2011. Prior to that, courts in New Jersey applied the “time of decision” rule, under which a decision concerning a municipal land use application was based on the municipal ordinance as it existed at the time the application or appeal was decided. The time of decision rule allowed municipalities to block proposed developments by changing the applicable zoning ordinance while development applications were pending. Then the Legislature put an end to this unfair practice by amending the Municipal Land Use Law (MLUL) to provide that “those development regulations which are in effect on the date of submission of an application for development shall govern the review of that application for development and any decision made with regard to that application …” N.J.S.A. 40:55D-10.5. This time of application rule has been of considerable assistance to property owners and developers by preventing municipalities from blocking development with eleventh hour changes to zoning ordinances after the developer has spent time and money pursuing a lengthy and costly application process.

In Dunbar Homes, Inc. v. Franklin Township Zoning Board, the Appellate Division addressed what must be submitted to a land use board to qualify as an “application for development” that triggers the time of application rule. In that case, the Franklin Township Zoning Board contended that the time of application statute does not apply until the land use board formally determines that an application is complete, leaving the developer subject to changes in the zoning ordinance that might occur after the application is submitted but before the board formally determines the application is complete, a process that often takes some time.

The Appellate Division rejected that interpretation of the law. Instead, it decided that the time of application rules is triggered when the applicant submits to the board “the application form and all accompanying documents required by ordinance for approval.” The court also decided that it is up to local land use boards to determine whether an application includes all items required by the local ordinance, and that the courts will only upset that determination if it is arbitrary, capricious and unreasonable. This standard, while perhaps more favorable to developers than the position advocated by the Franklin Township Zoning Board, nonetheless may enable municipalities to deny developers the benefit of the time of application rule in some cases.

Dunbar Homes had submitted 18 items as part of its application, including, among other things, site plans, architectural plans, an engineer’s report, a traffic report, an environmental impact statement, application fees, and escrow fees. Despite this extensive submission, the Zoning Board determined that the application did not include everything required by the ordinance since Dunbar Homes miscalculated the required fees, did not included a letter to the Department of Transportation, left information off its W-9 form, and failed to include “datum to which contour elevations refer” on the site plan application. The court determined that this was sufficient reason for the Zoning Board to conclude that Dunbar Homes had failed to submit an “application for development” that would trigger the time of application statute.

This decision could prove problematic for developers in many situations. As with Dunbar Homes, seemingly minor oversights could result in a local board deciding that an application does not trigger time of application rule protection. Submission waivers could be another problem. Municipal ordinances typically include “checklists,” which list the items to be submitted with an application. Applicants commonly request waivers from submitting items on the checklist that may not be pertinent to their particular application. Such “submission waivers” are often granted by land use boards. Depending on how the municipal ordinance is worded, however, a board could determine that an application that does not include every checklist item is insufficient to trigger time of application rule protection.

Developers seeking the benefit of the time of application rule must carefully review municipal ordinances and make sure their application includes everything called for by the ordinance.