New Jersey Realtors v. Township of Berkeley ( 2024 )

NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-1384-22
NEW JERSEY REALTORS, APPROVED FOR PUBLICATION
July 31, 2024
Plaintiff-Respondent, APPELLATE DIVISION
v.
TOWNSHIP OF BERKELEY,
Defendant-Appellant.
_________________________
Argued November 8, 2023 – Decided July 31, 2024
Before Judges Haas, Gooden Brown, and Natali.
On appeal from the Superior Court of New Jersey,
Law Division, Ocean County, Docket No. L-0991-22.
Christopher J. Dasti argued the cause for appellant
(Dasti & Associates, PC, attorneys; Christopher J.
Dasti, of counsel and on the briefs; Jeffrey D. Cheney,
on the briefs).
Barry S. Goodman argued the cause for respondent
(Greenbaum, Rowe, Smith & Davis LLP, attorneys;
Barry S. Goodman and Conor J. Hennessey, of
counsel and on the brief).
The opinion of the court was delivered by
GOODEN BROWN, P.J.A.D.
This appeal requires us to determine the validity of a local ordinance
restricting ownership at certain senior housing communities. Defendant
Township of Berkeley (Township) appeals from the December 2, 2022, Law
Division order granting summary judgment to plaintiff New Jersey Realtors
(NJR). The order effectively invalidated Berkeley Township Ordinance No.
22-13-OA (the Ordinance), which amended certain land use provisions to limit
property ownership in certain senior housing communities to persons aged
fifty-five and older. NJR sued the Township after the Ordinance was enacted,
arguing that such a restriction violated the Fair Housing Act (FHA), 42 U.S.C.
§ 3604(a), and the New Jersey Law Against Discrimination (NJLAD), N.J.S.A.
10:5-12(h), because both statutes prohibit discrimination based on familial
status. According to NJR, by setting a minimum age for property ownership in
retirement communities, the ordinance was discriminatory, and the restriction
did not fall within the limited housing for older persons exemption. Finding
that the ordinance violated the FHA and the NJLAD, the judge invalidated the
ordinance. We agree and affirm.
I.
The facts are undisputed. On March 29, 2022, the Township amended
and supplemented multiple sections of Chapter 35, the "Land Development"
section of the Township's municipal code, by enacting the Ordinance. The
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Ordinance changed existing land use provisions that required occupancy of
age-restricted units by persons aged fifty-five years or older, to now require
ownership of such units by persons aged fifty-five or older within certain
retirement communities.
Specifically, the Ordinance amended the definition of "Planned
Residential Retirement Community" (PRRC) under Section 35-101.1 to read as
follows:
"PRRC[]" shall mean a community having one . . . or
more parcels of land with a contiguous total acreage of
at least one hundred . . . acres except within the RGR
Zone which must have a continuous total acreage of at
least forty . . . acres, forming a land block to be
dedicated to the use of a planned retirement
community; through its corporation, association or
owners, the land shall be restricted by bylaws, rules,
regulations and restrictions of record, and services for
the benefit of permanent residents of communities
which mandate that in accordance with
24 [C.F.R. §] 100.306[(a)(4)], 24 [C.F.R. §] 100.[306(
a)(5)] and 24 [C.F.R. §] 100.[306(a)(6)] only persons
fifty-five . . . years of age and older, along with either
their respective spouse or domestic partner, or
otherwise if expressly authorized by the PRRC's
bylaws, rules, regulations and restrictions of record,
shall purchase a Lot or Living Unit in a PRRC to
assure that the PRRC does not have its age-restricted
status pursuant to 42 U.S.C. [§§ 3601 to 3631]
revoked and otherwise which require that residents
comply with the provisions, stipulations and
restrictions regarding senior communities allowing
occupancy of units by persons fifty-five . . . years of
age or older, as contained in the Federal Fair Housing
Act, as amended in 1988. Ownership of the
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residential units and the area comprising a PRRC may
be in accordance with the provisions of N.J.S.A.
45:22A-21[ to -56], or the ownership may be as is
commonly referred to as "fee simple" with open space
to be maintained through assessment against property
owners within the confines of the community.
[(Emphasis added).]
Next, the Ordinance amended Section 35-101.12 to state that:
The maintenance of the green areas, private
roadways, driveways, common courtyards,
recreational areas, lakes and other improvements not
intended to be individually owned shall be provided
by an association organized under the Nonprofit
Corporation Statute of the State of New Jersey (Title
15) and formed for that purpose. The applicant shall,
in the form restrictions and covenants to be recorded,
provided that title to the aforesaid enumerated areas
shall be conveyed to the association, whose members
shall be owners of lots who are only persons fifty-
five . . . years of age or older, along with either their
respective spouse or domestic partner, or other
interests, or to such other persons as a majority of the
members shall designate from time to time by duly
adopted bylaws. Such restrictions and covenants shall
mandate that in accordance with 24 [C.F.R. §]
100.306[(a)(4)], 24 [C.F.R. §] 100.306[(a)(5)] and
24 [C.F.R. §] 100.306[(a)(6)] only persons fifty-
five . . . years of age or older, along with either their
respective spouse or domestic partner, or otherwise if
expressly authorized by the PRRC's bylaws, rules,
regulations and restrictions of record, shall purchase a
Lot or Living Unit in a PRRC to assure that the PRRC
does not have its age-restricted status pursuant to
42 U.S.C. [§ 3601 to 3631] revoked and further
provide that the same shall not be altered, amended,
voided or released, in whole or in part, without the
written consent of the Township of Berkeley by
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resolution duly adopted at a regular meeting of the
Township Council and except upon proper notice
being given by the applicant or any other party in
interest to all owners of lots in the PRRC.
[(Emphasis added).]
Finally, Section 35-101.14(c) was amended as follows:
The documents shall be forwarded to the Board
and shall be subject to the review of the Board and of
the Township Council as to their adequacy in ensuring
that the community shall be constituted so as to be
consistent with the purposes and requirements of this
section, including the mandate that in accordance with
24 [C.F.R. §] 100.306[(a)(4)], 24 [C.F.R. §] 100.306[(
a)(5)] and 24 [C.F.R. §] 100.306[(a)(6)] only persons
fifty-five . . . of age or older, along with either their
respective spouse or domestic partner, or otherwise if
expressly authorized by the PRRC's bylaws, rules,
regulations and restrictions of record shall purchase a
Lot or Living Unit in a PRRC to assure that the PRRC
does not have its age-restricted status pursuant to
42 U.S.C. [§ 3601 to 3631] revoked. The proposed
documents and restrictions shall indicate a
comprehensive and equitable program for the orderly
transition of control over the homeowners' association
from the applicant or the developer to the actual
homeowners in the community.
[(Emphasis added).]
On May 11, 2022, NJR filed a complaint in lieu of prerogative writs
against the Township seeking an order declaring the Ordinance "invalid and
unenforceable" on the grounds that limiting property ownership, rather than
occupancy, violated federal and state law. In the complaint, NJR asserted that
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the Ordinance violates the FHA and the NJLAD because both statutes prohibit
familial status discrimination, which the Ordinance violates by setting a
minimum age for property ownership in PRRCs, and the restriction does not
fall within the statutory exemption. See 42 U.S.C. § 3604(a); N.J.S.A. 10:5-
12.5(a). According to the complaint, the Ordinance is preempted by the FHA
and the NJLAD, is arbitrary, capricious, and unreasonable, and violates the
State Constitution, N.J. Const. art. 1, ¶ 1.1
On August 12, 2022, NJR moved for summary judgment. In support,
NJR relied on a July 5, 2017, letter from the Commissioner of the Department
of Community Affairs (DCA) responding to NJR's inquiries on the legality of
restricting home ownership in age-restricted communities. The letter stated:
[DCA] has received your correspondence regarding
age-restricted communities limiting the ownership of
homes to those over the age of [fifty-five] or [sixty-
two]. At my direction, staff reviewed the current
federal and state law regarding age-restricted
communities with regards to ownership and
occupancy.
Our research yielded the results you expected.
Both the federal and state laws limit the age of the
1
Article I, Paragraph 1 of the New Jersey Constitution provides that "[a]ll
persons are by nature free and independent, and have certain natural and
unalienable rights, among which are those of enjoying and defending life and
liberty, of acquiring, possessing, and protecting property, and of pursuing and
obtaining safety and happiness."
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occupants of the home in age-restricted communities,
not the age of the owner of the home. Therefore, age-
restricted communities cannot prohibit the sale of a
home based on the owner's age. However, they may
require the owner or purchaser to certify that the units
will be occupied by a person that meets the age
restriction.
Additionally, in response to a request from the Township's Administrator
for clarification of the July 5, 2017, letter, in an October 26, 2017, letter, the
DCA Commissioner informed the Township in pertinent part:
I am writing in response to your letter
requesting clarification, and additional information,
regarding my letter dated July 5, 2017, which dealt
with the ownership of housing units in age-restricted
communities. That letter was written in response to a
question from [NJR]. In that letter, I indicated that
while federal and State law permit, in certain
instances, a community to restrict occupancy to
persons based on age, those laws do not include
similar language regarding the owners of units in such
communities. That conclusion was based on a review
of the applicable statutes.
In your letter, you raise several questions. First,
you inquire as to whether my letter was meant to
suggest that a community could, in fact, restrict the
age of owners, but that communities are not currently
doing so. That is not what my letter was stating;
rather, as noted above, age-restricted communities
may restrict the occupants, but not the owners of units,
based on age.
On December 2, 2022, following oral argument, the judge entered an
order granting NJR's motion and invalidating the Ordinance. In an oral
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decision, the judge determined that the Ordinance could not survive the
challenge because it conflicted with the FHA and the NJLAD by "restrict[ing]
ownership," not occupancy, "of people who are over [fifty-five]." The judge
acknowledged the DCA letters, noting that "the [DCA] made a specific finding
that . . . the exception . . . under the [FHA] and the [NJLAD] . . . relates to
occupancy and [not] ownership." The judge also ruled that the Ordinance
concerned an "area that has been preempted by . . . design on the federal and
state level . . . [and] . . . conflicts with the housing regulations and the scheme
to provide . . . age-restricted housing." Finally, the judge commented on the
"unintended consequences" of the Ordinance, which included preventing an
older owner from transferring title to the property to a non-qualifying younger
person "for purposes of estate planning." This appeal followed.
On appeal, the Township argues the judge "improperly granted [NJR's]
motion for summary judgment as the Ordinance is constitutional and neither
invalidated nor preempted" by the FHA or the NJLAD.
II.
"[W]e review the trial court's grant of summary judgment de novo under
the same standard as the trial court." Templo Fuente De Vida Corp. v. Nat'l
Union Fire Ins. Co. of Pittsburgh, 224 N.J. 189, 199 (2016). That standard is
well-settled.
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[I]f the evidence of record—the pleadings,
depositions, answers to interrogatories, and
affidavits—"together with all legitimate inferences
therefrom favoring the non-moving party, would
require submission of the issue to the trier of fact,"
then the trial court must deny the motion. R. 4:46-
2(c); see Brill v. Guardian Life Ins. Co. of Am., 142
N.J. 520, 540 (1995). On the other hand, when no
genuine issue of material fact is at issue and the
moving party is entitled to a judgment as a matter of
law, summary judgment must be granted. R. 4:46-
2(c); see Brill, 142 N.J. at 540.
[Steinberg v. Sahara Sam's Oasis, LLC, 226 N.J. 344,
366 (2016).]
Where there is no material fact in dispute, as here, "we must then 'decide
whether the trial court correctly interpreted the law.'" DepoLink Ct. Reporting
& Litig. Support Servs. v. Rochman, 430 N.J. Super. 325, 333 (App. Div.
2013) (quoting Massachi v. AHL Servs., Inc., 396 N.J. Super. 486, 494 (App.
Div. 2007)). "We review issues of law de novo and accord no deference to the
trial judge's [legal] conclusions . . . ." MTK Food Servs., Inc. v. Sirius Am.
Ins. Co., 455 N.J. Super. 307, 312 (App. Div. 2018).
The issue before us involves the interpretation of the FHA and the
NJLAD. Issues of "statutory construction" are also subject to "de novo"
review. Cashin v. Bello, 223 N.J. 328, 335 (2015). In interpreting a statute,
our Supreme Court recently provided the following guidance:
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Our role when interpreting a statute "is to determine
and give effect to the Legislature's intent." DYFS v.
A.L., 213 N.J. 1, 20 (2013).
To achieve that goal, "we look first to the plain
language of the statute," ibid., attributing to statutory
words "their ordinary meaning and significance and
read[ing] them in context with related provisions so as
to give sense to the legislation as a whole,"
DiProspero v. Penn, 183 N.J. 477, 492 (2005)
(citations omitted). If the statutory text has a clear
meaning, that meaning controls, but if the plain
language is ambiguous or leads "to an absurd result or
to a result at odds with the objective of the overall
legislative scheme," then we will analyze extrinsic
sources such as legislative history to best determine
legislative intent. DCPP v. Y.N., 220 N.J. 165, 178
(2014).
[N.J. Div. of Child. Prot. & Permanency v. B.P., 257
N.J. 361, 374 (2024) (alteration in original).]
"'[W]e interpret a regulation in the same manner that we would interpret a
statute.'" In re Eastwick Coll. LPN-to-RN Bridge Program, 225 N.J. 533, 542
(2016) (quoting US Bank, N.A. v. Hough, 210 N.J. 187, 199 (2012)).
Under the FHA, 42 U.S.C. § 3604, discrimination in the sale or rental of
housing on the basis of familial status is strictly prohibited. See Seniors Civ.
Liberties Ass'n v. Kemp, 761 F. Supp. 1528, 1541 (M.D. Fla. 1991) ("[T]he
Fair Housing Amendments Act of 1988 applies to both rental and ownership
housing."). To that end, subject to certain exemptions, 42 U.S.C. § 3604makes it unlawful to "refuse to sell or rent[,] . . . or otherwise make
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unavailable or deny, a dwelling to any person;" "[t]o discriminate against any
person in the terms, conditions, or privileges of sale or rental[,] . . . or in the
provision or services or facilities in connection therewith;" and "[t]o make,
print, or publish . . . any notice, statement, or advertisement, with respect to
the sale or rental . . . that indicates any preference, limitation, or
discrimination" based upon familial status. "The Act defines the term 'familial
status' as 'one or more individuals (who have not attained the age of [eighteen]
years)' living with a parent or legal guardian." Massaro v. Mainlands Section
1 & 2 Civic Ass'n, 3 F.3d 1472, 1476 (11th Cir. 1993) (quoting 42 U.S.C. §
3602(k)).
"Members of Congress determined the need for such legislation based on
studies and hearings indicating that families with children were having
difficulty securing housing because of age limitations." Ibid. To address
concerns regarding the impact of prohibiting housing discrimination based on
familial status in retirement communities, "where elderly residents had bought
or rented homes with the expectation that they would be able to live without
the noise and hazards of children," ibid., Congress expressly exempted
qualified housing for older persons from compliance. Specifically, 42 U.S.C.
§ 3607(b) provides that "[n]othing in [the FHA] . . . . regarding familial status
appl[ies] with respect to housing for older persons." See Seniors Civ. Liberties
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Ass'n, 761 F. Supp. at 1541 ("In short, it was the legislature's intent to open up
all forms of housing to parents with children under [eighteen] except those that
are designed for older persons and qualify for an exemption." (Emphasis
omitted)). As such, "[t]he housing for older persons exemptions permit
communities satisfying certain requirements to discriminate on the basis of
familial status." Balvage v. Ryderwood Improvement & Serv. Ass'n, Inc., 642
F.3d 765, 769 (9th Cir. 2011).
The housing for older persons exemptions "apply to three types of
housing, including, as relevant here, housing for persons [fifty-five] years of
age or older." Ibid.2 To qualify for the exemption, the housing must be:
(C) intended and operated for occupancy by persons
[fifty-five] years of age or older, and—
(i) at least [eighty] percent of the occupied units
are occupied by at least one person who is
[fifty-five] years of age or older;
(ii) the housing facility or community publishes
and adheres to policies and procedures that
demonstrate the intent required under this
subparagraph; and
2
"Although not relevant here, the exemptions also include (1) housing
provided under certain state or federal programs specifically designed and
operated to assist elderly persons and (2) housing intended for, and solely
occupied by, persons [sixty-two] years of age or older." Balvage, 642 F.3d at
769 n.2 (citing 42 U.S.C. § 3607(b)(2)(A)-(B)).
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(iii) the housing facility or community complies
with rules issued by the Secretary for
verification of occupancy, which shall—
(I) provide for verification by reliable
surveys and affidavits; and
(II) include examples of the types of
policies and procedures relevant to a
determination of compliance with the
requirement of clause (ii). Such surveys
and affidavits shall be admissible in
administrative and judicial proceedings
for the purposes of such verification.
[42 U.S.C. § 3607(b)(2)(C).]
Noticeably, the exemption only addresses "occupancy" and is silent on
whether it is permissible to restrict ownership to persons fifty-five or older.
Ibid. The Code of Federal Regulations (CFR), which governs the application
of the exemption, also makes no mention of ownership, and instead explains
how the eighty percent occupancy requirement can be satisfied, 24 C.F.R.
§100.305, how a housing facility or community must demonstrate its intent to
operate as housing designed for occupancy for persons fifty-five years of age
or older, 24 C.F.R. § 100.306, and how to verify compliance with the eighty
percent occupancy requirement, 24 C.F.R. § 100.307.
To date, New Jersey courts have not expressly addressed whether age-
related ownership restrictions are permitted under the FHA. Other
jurisdictions have rendered tangential decisions without tackling the issue head
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on. Some courts appear to treat ownership and occupancy restrictions
synonymously, while other courts warn that ownership restrictions infringe
upon constitutionally protected property rights. For example, in Balvage,
where defendant homeowners' association restricted "ownership and residence
. . . to persons . . . [fifty-five] years of age or older," the "sole issue" in the
lawsuit filed by residents alleging discriminatory housing practices in violation
of the FHA was whether defendant was "exempt from the FHA's prohibitions
on familial status discrimination under . . . the housing for older persons
exemptions set out in § 3607(b)." 642 F.3d at 776.
In contrast, in Duvall v. Fair Lane Acres, Inc., 50 So. 3d 668, 671 (Fla.
Dist. Ct. App. 2010), a Florida appellate court reversed a trial court order that
an age restriction imposed on homeowners by a homeowners' association "was
a restriction on occupancy and not a restriction on 'property rights.'" In
determining that "the judgment constituted an unlawful taking of property
rights," id. at 669, the court reasoned:
To impose a limitation on who can use and
enjoy property is a direct restriction on the
Homeowners' ownership rights in their properties.
See Black's Law Dictionary 1215 (9th ed. 2009)
(defining "ownership" as "[t]he bundle of rights
allowing one to use, manage, and enjoy property,
including the right to convey it to others"). Similarly,
to restrict the ability to transfer property by imposing
an obligation to seek the approval of the Association
is an improper infringement on the Homeowners'
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property rights. These property rights are
constitutionally protected, and the trial court erred in
ordering the Homeowners to sign the Agreement by
which they would be required to surrender these
rights. See [Dep't of Law Enf't v. Real Prop., 588 So.
2d 957, 964 (Fla. 1991)] ("Property rights are among
the basic substantive rights expressly protected by the
Florida Constitution. Art. I, § 2, Fla. Const.").
[Duvall, 50 So. 3d at 671 (first alteration in original).]
Other than the ownership restriction, based on the FHA's plain language,
the Ordinance meets the requirements of the housing for older persons
exemption. See 42 U.S.C. § 3607(b)(2)(C). The Ordinance defines and
restricts PRRCs to the required level of occupancy by residents aged fifty -five
years or older, clearly expressing the intent to create housing for older persons.
In fact, NJR does not dispute that the PRRCs would otherwise comply with the
FHA's occupancy threshold requirements. Instead, NJR asserts the Ordinance
is "facially discriminatory" as a matter of law and "violative of the [FHA]."
NJR invites us to construe the FHA's silence on ownership as a prohibition
against it, reasoning that if the ability to regulate ownership is not explicitly
permissible, it is "inherently discriminatory" because of the "discriminatory
impact it would have on people who are protected under the [FHA] on the
basis of familial status."
"We have scrupulously required that state and municipal regulations
conform to the [FHA]." United Prop. Owners Ass'n of Belmar v. Borough of
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Belmar, 343 N.J. Super. 1, 48 (App. Div. 2001). On its face, 42 U.S.C. § 3604does not expressly permit or preclude an age-restricted community from
limiting home ownership to persons fifty-five years of age or older. However,
subject to certain exemptions, it does prohibit discriminatory acts, including
refusing to sell a dwelling to any person, discriminating against any person in
the terms or conditions of sale, or indicating any preference with respect to the
sale based upon familial status. See ibid.Discrimination on the basis of familial status does not violate the FHA if
the housing for older persons exemption applies. See 42 USC § 3607(b)(1).
Critically, the FHA's housing for older persons exemption permits restrictions
on occupancy, not ownership, to persons fifty-five years and older. Thus, the
exemption does not expressly permit the restriction on ownership embodied in
the Ordinance. "As a general matter, the primary goal of the [FHA] is to limit
discrimination in the housing arena." Putnam Fam. P'ship v. City of Yucaipa,
673 F.3d 920, 931 (9th Cir. 2012). Considering both the text and the
underlying purpose of the FHA, we can reach only one conclusion. Because
the exemption does not apply and the Ordinance's restriction on ownership in
age-restricted communities discriminates on the basis of familial status, we
conclude that the Ordinance violates 42 U.S.C. § 3604 and is therefore
unlawful.
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We reach a similar conclusion with respect to the NJLAD. Like the
FHA, the NJLAD prohibits housing discrimination on the basis of familial
status, with an exception for qualified housing for older persons. N.J.S.A.
10:5-12(h); 10:5-5(n) ("[No] provision under this act regarding discrimination
on the basis of familial status appl[ies] with respect to housing for older
persons.").
Pertinent here, the NJLAD defines housing for older persons 3 as housing
that is:
(3) intended and operated for occupancy by at least
one person [fifty-five] years of age or older per unit.
In determining whether housing qualifies as housing
for older persons under this paragraph, the Attorney
General shall adopt regulations which require at least
the following factors:
(a) the existence of significant facilities and
services specifically designed to meet the
physical or social needs of older persons, or
if the provision of such facilities and
services is not practicable, that such
housing is necessary to provide important
housing opportunities for older persons; and
3
Although not relevant here, the exemptions also include (1) housing
provided under certain State or federal programs "specifically designed and
operated to assist [elderly] persons;" and (2) housing "intended for, and solely
occupied by, persons [sixty-two] years of age or older." N.J.S.A. 10:5-
5(mm)(1), (2).
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(b) that at least [eighty] percent of the units are
occupied by at least one person [fifty-five]
years of age or older per unit; and
(c) the publication of, and adherence to,
policies and procedures which
demonstrate an intent by the owner or
manager to provide housing for
persons [fifty-five] years of age or
older.
[N.J.S.A. 10:5-5(mm)(3).]
Similar to the CFR, our State regulations provide more detailed guidance
on the qualifications for the housing for older persons exemption. N.J.A.C.
13:15-1.5. Still, both the NJLAD and its attendant regulations only delineate
occupancy restrictions and make no mention of ownership restrictions.
N.J.S.A. 10:5-5(mm); N.J.A.C. 13:15-1.5. However, in 2019, N.J.A.C. 13:15-
1.2(a) was amended to state that "[n]othing in the requirements of [the housing
for older persons regulations] shall be construed to restrict the age of any
purchaser or grantee of housing who does not reside in, or intend to reside in,
such housing."
The amendment was added after the Division on Civil Rights (DCR)
received public comments concerning retirement communities restricting
occupancy:
Commenters [two] through [thirty-three] expressed
substantially similar concerns regarding the
requirements for an exemption to the [NJLAD's] ban
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on housing discrimination based on familial status.
The commenters assert that some entities operating
and managing housing communities restricted to
occupancy by persons [sixty-two] or over as defined
in N.J.A.C. 13:15-1.4, or restricted to occupancy by
persons [fifty-five] and over as defined in N.J.A.C.
13:15-1.5, are restricting the ages of the owners as
well as the occupants. These commenters note that
State law and [f]ederal law restrict the ages of the
occupants, but do not restrict the ages of non-occupant
owners of such properties. The commenters request
amendment of the rule to clarify that individuals under
the ages of [fifty-five] or [sixty-two] can purchase a
home in age-restricted communities "so long as they
certify the occupants of that home will be over the age
of [fifty-five] or [sixty-two]." One commenter
specifically requested adding clarifying language to
N.J.A.C. 13:15-1.4(a) and 1.5(d).
[51 N.J.R. 216(a).]
DCR responded as follows:
DCR agrees that the [NJLAD's] definitions of housing
for older persons address only the ages of the
occupants of any housing, and do not address the ages
of non-occupant owners of such housing.
Accordingly, as adopted, DCR has added clarifying
language to N.J.A.C. 13:15-1.2(a) to prevent any
inaccurate interpretation of the [NJLAD] or the rule.
DCR declines, however, to add the provision "so long
as they certify that the unit will be occupied by
persons [fifty-five or sixty-two] years of age or over"
to the rules. Such a certification is already required
by a New Jersey statute governing age-restricted
communities, which is administered by [DCA]. See
N.J.S.A. 45:22A-46.2. However, no such certification
is required by the [NJLAD]. To ensure consistency
with the relevant language in the [NJLAD], DCR has
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determined that N.J.A.C. 13:15-1.2, rather than
N.J.A.C. 13:15-1.4 and 1.5, should be changed.
[51 N.J.R. 216(a).]
A plain reading of N.J.A.C. 13:15-1.2(a) clarifies that the housing for
older persons exemption applies only to occupancy, not ownership. Thus,
considering the text and the underlying purpose of the NJLAD, we conclude
that any age restriction imposed on ownership in PRRCs is a discriminatory
housing practice that violates the NJLAD on the basis of familial status. As
such, we agree with the judge that the Ordinance violates the NJLAD and is
therefore unlawful.
Given our analysis, we are also convinced that the Ordinance is
preempted by the FHA and the NJLAD. "[A] court may declare an ordinance
invalid if it . . . is preempted by superior legal authority." Rumson Ests., Inc.
v. Mayor of Fair Haven, 177 N.J. 338, 351 (2003) (internal citation omitted);
see United Bldg. & Constr. Trades Council v. Mayor & Council of Camden, 88
N.J. 317, 343 (1982) (commenting that "[w]hen a state statute has preempted a
field by supplying a complete system of law on subject, an ordinance dealing
with the same subject is void"), rev'd on other grounds, 465 U.S. 208 (1984).
In Overlook Terrace Management Corp. v. Rent Control Board, our
Supreme Court explained that "[p]reemption is a judicially created principle
based on the proposition that a municipality, which is an agent of the State,
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cannot act contrary to the State." 71 N.J. 451, 461 (1976) (citing Summer v.
Teaneck, 53 N.J. 548, 554 (1969)).
Preemption analysis calls for the answer initially to
whether the field or subject matter in which the
ordinance operates, including its effects, is the same
as that in which the State has acted. If not, then
preemption is clearly inapplicable. An affirmative
answer calls for a further search for "[i]t is not enough
that the Legislature has legislated upon the
subject . . . ."
[Ibid. (alteration in original) (citations omitted)
(quoting Summer, 53 N.J. at 554).]
If the threshold question is answered affirmatively, then five questions
should be considered to determine whether a municipal ordinance is preempted
by state law:
1. Does the ordinance conflict with state law, either
because of conflicting policies or operational effect
(that is, does the ordinance forbid what the Legislature
has permitted or does the ordinance permit what the
Legislature has forbidden)?
2. Was the state law intended, expressly or impliedly,
to be exclusive in the field?
3. Does the subject matter reflect a need for
uniformity? . . . .
4. Is the state scheme so pervasive or comprehensive
that it precludes coexistence of municipal regulation?
5. Does the ordinance stand "as an obstacle to the
accomplishment and execution of the full purposes
and objectives" of the Legislature?
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[Id. at 461-62 (citations omitted).]
Consideration of the Overlook factors leads us to conclude that the
Ordinance is preempted by the FHA and the NJLAD. Based on our earlier
analysis, it is apparent that the Ordinance conflicts with the FHA and the
NJLAD, the interpretation of which is the very issue before us. Application of
that factor alone weighs heavily in favor of preemption. The remaining factors
are met as well. "Local action is preempted when the Legislature intended 'its
own actions, whether it exhausts the field or touches only part of it, to be
exclusive.'" Essex Cnty. Corr. Officers PBA Loc. No. 382 v. Cnty. of Essex,
439 N.J. Super. 107, 121 (App. Div. 2014) (quoting Mack Paramus Co. v.
Mayor & Council of Paramus, 103 N.J. 564, 573 (1986)).
Finally, although not reached by the judge, we address whether the
Ordinance is a valid and reasonable exercise of police power or an arbitrary,
capricious, and unreasonable act that exceeds the scope of the Township's
authority. NJR maintains that the Ordinance is arbitrary and capricious
because it "has no justifiable purpose, does not address any alleged problem (it
instead creates problems), and goes well beyond any public need, in
contradiction of established [f]ederal and State laws." According to NJR, the
Ordinance would "harm existing unit owners within PRRCs by artificially
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suppressing the value of their property" because potential buyers would be
significantly limited by the age restriction.
The Township counters that the Ordinance is "reasonably calculated" to
address "a local concern: rampant house-flipping and speculation by non-
owner occupants, including corporations and persons under [fifty-five] years
of age, which is making communities unaffordable for the very persons they
are intended to serve – seniors on fixed incomes." The Township argues that
the Ordinance is well within the scope of its authority to address this problem
by "remov[ing] those unprotected classes of speculators from the classes of
persons eligible to own units within [PRRCs]."
"[W]hen reviewing a municipal action, we apply a presumption of
validity and reasonableness to adopted ordinances" and "do not 'pass on the
wisdom of the ordinance; that is exclusively a legislative function.'" Timber
Glen Phase III, LLC v. Twp. of Hamilton, 441 N.J. Super. 514, 523 (App. Div.
2015) (quoting Pheasant Bridge Corp. v. Twp. of Warren, 169 N.J. 282, 290
(2001)). The party challenging the ordinance bears the burden of showing that
"the ordinance, 'in whole or in application to any particular property,' is
arbitrary, capricious or unreasonable." Ibid. (quoting Pheasant Bridge, 169
N.J. at 289-90).
This presumption of validity is derived from our State Constitution:
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The provisions of this Constitution and of any
law concerning municipal corporations formed for
local government, or concerning counties, shall be
liberally construed in their favor. The powers of
counties and such municipal corporations shall include
not only those granted in express terms but also those
of necessary or fair implication, or incident to the
powers expressly conferred, or essential thereto, and
not inconsistent with or prohibited by this Constitution
or by law.
[N.J. Const., art. IV, § 7, ¶ 11.]
The presumption "embodies the principle that the police power of the
State may be invested in local government to enable local government to
discharge its role as an arm or agency of the State and to meet other needs of
the community." Inganamort v. Ft. Lee, 62 N.J. 521, 528 (1973). However,
the presumption is not without restraint.
On the other side of the coin is the postulate that a
local municipality is but a creature of the State,
capable of exercising only those powers granted to it
by the Legislature[, Wagner v. Mayor & Mun. Council
of City of Newark, 24 N.J. 467 (1957)], and the
equally important truism that the presumption of
validity referred to is only a presumption and may be
overcome or rebutted not only by clear evidence
aliunde, but also by a showing on its face or in the
light of facts of which judicial notice can be taken, of
transgression of constitutional limitation or the bounds
of reason. [Guill v. Mayor & Council of City of
Hoboken, 21 N.J. 574, 581 (1956); State v.
Wittenberg, 50 N.J. Super. 74, 78 (App. Div. 1957).]
[Moyant v. Borough of Paramus, 30 N.J. 528, 534-35
(1959) (emphasis omitted).]
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See also Dome Realty, Inc. v. Paterson, 83 N.J. 212, 225-26 (1980)
(establishing "a three-part analysis for determining the propriety of an exercise
of legislative authority by a municipality," including "whether any delegation
of power to municipalities has been preempted by other State statutes dealing
with the same subject matter").
In the area of land use, the Municipal Land Use Law (MLUL) authorizes
municipalities to regulate the use of land and buildings within its borders. See
N.J.S.A. 40:55D-1 to -163. Nonetheless, our courts have grappled with the
competing interests of municipalities and property owners and have recognized
that restrictions imposed by municipalities "must respect the constitutionally
protected right to own and alienate property." Ocean Cnty. Bd. of Realtors v.
Twp. of Long Beach, 252 N.J. Super. 443, 455 (Law Div. 1991).
On the one hand, our courts have recognized the right
of a municipality to "secure and maintain 'the
blessings of quiet seclusion' and to make available to
its inhabitants the refreshment of repose and the
tranquility of solitude." On the other hand, our courts
have consistently invalidated ordinances which
unnecessarily and excessively restrict the use of
private property.
[Id. at 449-50 (citation omitted) (quoting Berger v.
State, 71 N.J. 206, 223 (1976)).]
As such, we have held that neither the express nor implied powers of
municipal regulation suggest "the power to . . . deny an owner a substantial
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attribute of ownership and possession of real estate," or allow "an
impermissible arrogation of governmental power." Repair Master, Inc. v.
Borough of Paulsboro, 352 N.J. Super. 1, 10-11 (App. Div. 2002). To that
end, restraints on the alienation of property are generally disfavored as a
matter of public policy:
It is firmly established that the policy of the law
is against the imposition of restrictions upon the use
and enjoyment of land and such restrictions are to be
strictly construed. Restrictions tend to protect
property, but they also impair alienability. Nor will
equity aid one man to restrict another in the use of
his[ or her] land unless the right to restrict is made
manifest and clear in the restrictive covenant.
[Hammett v. Rosensohn, 46 N.J. Super. 527, 535
(App. Div. 1957).]
Indeed, our case law has consistently supported "the fundamental, if not
immutable, principle that 'zoning enabling acts authorize local regulation of
"land use" and not regulation of the "identity or status" of owners or persons
who occupy the land.'" Tirpak v. Borough of Point Pleasant Beach Bd. of
Adjustment, 457 N.J. Super. 441, 443 (App. Div. 2019) (quoting 5 Edward H.
Ziegler, Jr., Rathkopf's The Law of Zoning and Planning § 81.7 (4th ed.
2005)); see also DeFelice v. Zoning Bd. of Adjustment, 216 N.J. Super. 377,
381 (App. Div. 1987) ("[A] zoning board is charged with the regulation of land
use and not with the person who owns or occupies the land.").
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This wariness of ownership restrictions stems from the constitutionally
protected right to "own and dispose of real property, a right that is within the
protective scope of the Fourteenth Amendment to the United States
Constitution and Article I, § 1 of the New Jersey Constitution." Upper
Deerfield Twp. v. Seabrook Hous. Corp., 255 N.J. Super. 218, 224 (App. Div.
1992). Although that right "is subject to the reasonable exercise of the police
power," id. at 224-25, where there are extreme limitations on the right of
ownership of private property, we have not hesitated to invalidate an
ordinance. See, e.g., United Prop. Owners Assoc. v. Borough of Belmar, 185
N.J. Super. 163, 170-71 (App. Div. 1982) (invalidating provisions of ordinance
precluding temporary or seasonal rentals on residential property as defined in
the ordinance as "impermissibly arbitrary" and constituting "an unreasonable
restraint on the use of private property"); see also Upper Deerfield Twp., 255
N.J. Super. at 219, 225 (invalidating ordinance "requiring the seller of land
containing a structure to obtain a certificate of occupancy prior to sale
regardless of its intended use by the prospective buyer" where "its literal
application to every sale of real estate containing a structure reaches beyond
the legitimate police power concerns of the municipality and becomes
confiscatory").
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In such situations, we have stressed that the appropriate inquiry in a case
involving ownership restrictions "is whether the Township ordinance enacted
under the police power, affecting private rights as it does, evidences a public
need that justifies governmental action and whether the restrictions imposed
unreasonably and irrationally exceed the public need." Id. at 225.
Applying that standard, we conclude the Ordinance unreasonably
infringes upon the well-established and constitutionally protected right to own
and sell property and the restriction unreasonably and irrationally exceeds the
public need. See United Prop. Owners Assoc., 185 N.J. Super. at 170(recognizing that "an extreme limitation on rights of ownership of private
property" will be found to be arbitrary). Although the Township posits that
enforcement of the restriction could accomplish a worthwhile purpose, the
persons to whom alienation is prohibited could be substantial and impactful.
As the judge pointed out, the restriction could impact to a significant degree
the very seniors the Township seeks to protect by preventing owners over the
age of fifty-five from transferring title to non-qualifying family members, a
common practice in estate planning. Additionally, the Ordinance would
adversely affect every owner's ability to sell by limiting the pool of eligible
buyers.
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On an alternative basis, we therefore invalidate the Ordinance on the
ground that it is arbitrary and unreasonable. We do not believe the Legislature
has imbued municipalities with the power to restrict ownership at senior
housing communities as contemplated in the Ordinance and, as we stated in
Repair Master, Inc.,
This is a power we simply will not infer in light of the
evidence and the history of our land use and
occupancy jurisprudence. If this power is conferred
on municipalities, we think it should be the result of
legislative deliberation and evaluation of all the
complex considerations, not from a judicially-created
attempt to accommodate a single, though doubtlessly
sincere, municipal effort. The problem could be
compounded if other municipalities were to take this
route and seek an arguably more desirable occupancy
mix. Specific legislative approval should be a
precondition to the exercise of a power we consider a
radical regulatory development.
[352 N.J. Super. at 14.]
Affirmed.
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