Society Hill at Piscataway Condominium Ass'n v. Township of Piscataway
Society Hill at Piscataway Condominium Ass'n v. Township of Piscataway
Opinion of the Court
1. Statement of the Case
In this action, plaintiffs Society Hill at Piscataway Condominium Association, Inc. (“Society Hill”) and five individual owners of real property at Society Hill (collectively, “plaintiffs”) filed this motion for summary judgment against defendant Township of Piscataway (“Piscataway”), claiming that its unilateral extension of existing thirty-year deed restrictions, which sought to regulate the resale and rental prices of low and moderate income units identified in and governed by a consent order in the Urban League litigation
2. Background Information
Society Hill is an inclusionary development that was constructed more than thirty years ago pursuant to Piscataway’s partial
Following the Supreme Court’s remand in the Urban League case, various properties were rezoned throughout Middlesex County. In particular, one of these sites, in Piscataway, was acquired by K. Hovnanian, which sought site plan approval to build an inclusionary development. As a condition of site plan approval, an Affordable Housing Plan was adopted which, in pertinent part, stated:
Covenants Running With Land. The provisions of this Affordable Housing Plan shall constitute covenants running with the land with respect to each Affordable Condominium affected hereby, and shall bind all purchasers of each such Unit, their heirs, assigns and all persons claiming by, through or under their heirs, executors, administrators and assigns. The terms, restrictions and covenants of this Plan shall, however, automatically expire and terminate at the earliest of the following: (1) thirty (30) years from the date hereof; and (2) the date upon which the event set forth in paragraph 13 hereinafter shall occur; and (3) the date upon which the association dissolves or ceases to exist for any period of time for any reason, in which ease, an instrument executed by the Association evidencing same must be duly recorded with the Office of the Clerk of Middlesex County.
That Affordable Housing Plan required that the Master Deed, and each of the individual deeds transferring ownership rights to any of the 109 affordable housing units, incorporate that same covenant, and required further that every prospective buyer be given a disclosure statement informing them of the specific terms, restrictions, provisions, and covenants referenced in the Plan and in the Master Deed.
Thereafter, the builder executed and recorded a Master Deed, which expressly incorporated by reference the thirty-year deed restriction and covenant limiting the resale and rental prices on those units so as to maintain their continued occupancy by low and moderate income persons:
The terms, restrictions, provisions and covenants of the Affordable Housing Plan, and the provisions of the Master Deed referring to and incorporating the Affordable Housing Plan, shall automatically expire and terminate at the earliest of the following: (1) — thirty (30) years from the date of the Affordable Housing Plan; and (2) the date upon which the right of redemption expires with respect to the foreclosure of the first mortgage lien upon an Affordable Condominium by the first mortgagee of the Affordable Condominium as the Plan applies to the specific unit which is subjected to a foreclosure pursuant to this provision; and (3) the date upon which the Society Hill at Piscataway Condominium Association, Inc. creases [sic] to exist or dissolve for any reason and for any period of time. Neither the Developer, the Owner, the Association nor the Agency shall amend or alter the provisions of this paragraph without first obtaining the approval of both the Agency and the Planning Board of the Township of Piscataway. Any such approved amendments or modifications of this plan shall be in writing and shall contain proof of Planning Board approval and shall not be effective unless and until recorded with the Middlesex County Clerk.
Consistent with these restrictions, each deed of conveyance, likewise referred to, incorporated by reference, and included that thirty-year deed restriction:
WHEREAS, certain specified condominium (hereinafter ‘Affordable Condominiums’) within Society Hill at Piscataway Condominiums are subject to the terms, provisions and restrictions contained in both the Master Deed and Declaration of Restrictive and Protective Covenants of Society Hill at Piscataway Condominiums, recorded on October 15,1985, in the Middlesex County Clerk’s Office in Deed Book*441 3468, Page 774 et seq. and the terms, provisions and restrictions contained in the Affordable Housing Plan for Society Hill at Piscataway (hereinafter ‘Plan’) recorded on Oct. 15, 1985, in the Middlesex County Clerk’s Office in Deed Book 3468, Page 891 et seq.
On July 17, 1989, the Council on Affordable Housing (COAH) adopted its first recapture regulation (the “95/5 Rule”) preventing the purchaser of an affordable housing unit from reaping a windfall after the expiration of their respective controls, and that recapture mechanism has remained in place through COAH’s adoption of the 2001 Uniform Housing Affordability Controls (UHAC) regulations and its 2004 amendments.
In an effort to ensure the continuing availability of these units to low and moderate income families, and desirous of retaining credits for them, the Township, on December 8, 2012, nearly thirty years after the first of these affordable housing units were constructed and sold, adopted an ordinance that purported to authorize the Township to “extend” the affordable housing resale controls for another thirty years, presumably pursuant to NJ.A.C.
To implement its goal of “recapturing” the “expiring” affordable units, on July 14, 2014, the Township filed and recorded a “Declaration of Restrictive Covenant,” which states:
NOW, THEREFORE, BE IT RESOLVED by the Declarant declares [sic] that the Units [at Society Hill] shall be held, transferred, conveyed, leased, occupied and used subject to the following restrictions and conditions:
1. Pursuant to N.J.A.C. 5:97-6.14(b)(2)(Extension of Expiring Controls), the Controls on the Units are extended until June 7, 20Jt5, in accordance with the Uniform Housing Ajfoi'dability Controls (“UHAC”);
2. During this period of Extended Contools no seller of any of the one hundred nine (109) Units may utilize the Repayment Option as permitted by N.J.A.C. 5:93-9.8[sic]; specifically, the Repayment Option shall not be permitted for any of the Units from the date of recordation of this instrument until June 7, 2045;
3. The Controls are extended until June 7, 2045, and during this period of extended Controls, no seller of any of the one hundred nine (109) Units may utilize the Repayment Option as permitted by N.J.A.C. 5:93-9.8.
4. The sale and use of the Units is governed by UHAC, found in the New Jersey Administrative Code at Title 5, Chapter 80, subchapter 26 (N.J.A.C. 6:80-26.1 et seq., the “Regulations”) and any amendment, changes or supplements thereto.
5. All of the restricted Units shall remain subject to the requirement of N.J.A.C. 5:80-26.25, as may be amended and supplemented from time to time, during the extended Control period until Piscataway Township elects to release the Units from such requirements.
Any conveyance of the Property or the individual Units named herein shall contain a disclosure setting forth the existence of this Declaration. Each Unit owner is required to fully comply with the Affordability Controls originally placed on the Units which were extended by Resolution No. 13-459. The restrictions set forth in this Declaration shall run with the land and be binding upon the owners of the Units, and then- successor, assigns and heirs, as set forth herein. Failure to comply with the extended Deed Restrictions shall subject the Owner(s) and/or Transferor(s) of any of the Units to any and all penalties permitted by law.
[Emphasis in original.]
If valid, Piscataway’s extension of the initial thirty-year deed restrictions would put a cloud on their titles and preclude all
3. Discussion
In their motion, plaintiffs argue that Piscataway’s extension of the deed restrictions for an additional 30 years violates their legal rights and constitutes a cloud on their respective titles. Piscata-way disagrees and contends instead that it was lawfully empowered to implement extended controls on those units in order to ensure an adequate supply of low- and moderate-income housing based on: (1) the UHAC, N.J.A.C. 5:80-26.1 to -26.26, which was enacted “to ensure that affordable housing units restricted to persons with low or moderate incomes (restricted units) would remain occupied by persons meeting those income levels,” In re Adoption of Uniform Hous. Affordability Controls, supra, 390 N.J.Super. at 96, 914 A.2d 402; and (2) this state’s strong constitutional and public policy imperatives, which compel municipalities to provide their respective fair share of affordable housing. See S. Burlington Cty. N.A.A.C.P. v. Twp. of Mount Laurel, 67 N.J. 151, 336 A.2d 713 (1975) (hereinafter “Mount Laurel I ”); S. Burlington Cty. N.A.A.C.P. v. Twp. of Mount Laurel, 92 N.J. 158, 456 A.2d 390 (1983) (hereinafter “Mount Laurel II ”); Hills Dev. Co. v. Twp. of Bernards, 103 N.J. 1, 20, 510 A.2d 621 (1986) (hereinafter “Mount Laurel III’’); and In re N.J.A.C. 5:96 & 5:97, 221 N.J. 1, 110 A.3d 31 (2015) (hereinafter “Mount Laurel TV”).
Urging traditional notions of deference, the Township insists that the UHAC regulations permit it to override and extend, retroactively, the thirty-year limitations contained in plaintiffs’ original deeds.
a. The Township’s Purported Reservation of a Unilateral Right to Amend or Modify the Covenants
As a preliminary matter, Piscataway contends that it “reserved” the right to amend or modify the covenants unilaterally, reasoning that the relevant documents, when read as a whole, allow for such an interpretation, and thus, sanction its actions. In
Addressing each contention in order, the Township posits that its Affordable Housing Plan makes all deed restricted units, including those of the plaintiffs, subject not only to the rules and regulations of the Township’s Affordable Housing Agency, but also to those of COAH and HMFA. I cannot agree.
That plan provides, in pertinent part:
In addition to the foregoing restrictions, the resale of Affordable Condominiums shall be subject to the rules and regulations of the Affordable Housing Agency which shall be established by the Township of Piscataway. This Agency shall monitor and approve resales of Affordable Condominiums to assure that purchasers of same shall be Lower Income Purchasers as defined by the Agency’s Income criteria in effect at the time of the proposed sale.
Contrary to the Township’s urging, the phrase “Affordable Housing Agency” is unquestionably limited to the Township’s agency, and not to any agency of the State, since it refers only to an agency “established by the Township of Piscataway.” Nor does that document include any express grant or reservation of authority, which might permit the Township to unilaterally extend the deed restrictions whose genesis was the Urban League litigation.
The Township next references the Master Deed, which states:
Neither the Developer, the Owner, the Association nor the Agency shall amend or alter the provisions of this paragraph without first obtaining the approval of both the Agency and the Planning Board of the Township of Piscataway. Any such approved amendments or modifications of this plan shall be in writing and shall contain proof of Planning Board approval and shall not be effective unless and until recorded with the Middlesex County Clerk.
That provision, likewise, does not explicitly authorize any amendment to the restrictive covenants. Instead, it simply acknowledges, rather unremarkably, the Township’s right to pursue amendments to the Affordable Housing Plan as distinct from and unrelated to the terms of the Master Deed and individual deeds, which contain the resale controls.
Piscataway shall serve notice upon the Urban League plaintiffs in the event that an application to amend or revise the approvals or the Affordable Housing Plan for Society Hill at Piscataway is submitted to the Planning Board ... within ten (10) business days of the filing of such applications.
At best, the provisions cited by Piscataway are silent on whether the Township specifically reserved the authority to unilaterally extend the resale and rental controls. I am, therefore, unwilling to rewrite the documents to include such a reservation.
b. The UHAC Regulations Do Not Permit Piscataway to Extend the Resale and Rental Controls Of Plaintiffs’ Units
In 1985, the Legislature enacted the Fair Housing Act (“FHA”), N.J.S.A. 52:27D-301 to -329, to confer responsibility for the administration and enforcement of the Mount Laurel doctrine upon a state administrative agency. This obligation requires municipalities to provide a realistic opportunity, through their land use regulations, for the construction of their respective fair share of affordable housing for lower and moderate income households. See Mount Laurel I, supra, 67 N.J. at 151, 336 A.2d 713; Mount Laurel II, supra, 92 N.J. at 158, 456 A.2d 390; Mount Laurel III, supra, 103 N.J. at 20, 510 A.2d 621; and Mount Laurel IV, supra, 221 N.J. at 1, 110 A.3d 31.
The FHA vests COAH with primary jurisdiction over the implementation and administration of the Mount Laurel doctrine. See Mount Laurel III, supra, 103 N.J. at 32, 510 A.2d 621; Holmdel Builders Ass’n v. Twp. of Holmdel, 121 N.J. 550, 576, 583 A.2d 277 (1990) (“It cannot be overstressed that the Legislature, through the FHA, intended to leave the specific methods of compliance with Mt. Laurel in the hands of COAH and the
Prior to 2001, three separate state agencies — COAH, the HMFA, and the Department of Community Affairs (“DCA”)— “adopted distinct sets of rules establishing controls on the continuing affordability of housing constructed pursuant to the FHA,” which, predictably, resulted in confusion and inconsistent results. In re Adoption of Uniform Hous. Affordability Controls, supra, 390 N.J.Super. at 95-96, 914 A.2d 402. To avoid inconsistent and/or overlapping regulations, the HMFA repealed its original set of regulations and, in 2001, promulgated the UHAC regulations, thus specifically amending and superseding any contrary rules promulgated by either COAH or the DCA.
In construing New Jersey regulations, the courts must do so “in the same manner that [they] would interpret a statute.” U.S. Bank, N.A. v. Hough, 210 N.J. 187, 199, 42 A.3d 870 (2012); see Bedford v. Riello, 195 N.J. 210, 221-222, 948 A.2d 1272 (2008). The paramount goal is to ascertain the intent of the drafter. DiProspero v. Penn, 183 N.J. 477, 492, 874 A.2d 1039 (2005). To
While no court has yet construed the reach of N.J.AC. 5:80-26.1 to -26.26 in the context of extending resale and rental controls, it is plain that the UHAC regulations were “designed to implement the [FHA] by assuring that low- and moderate-income units created under the Act are occupied by low- and moderate-income households for an appropriate period of time.” N.J.AC. 5:80-26.1 (emphasis added); see also In re Adoption of Uniform Hous. Affordability Controls, supra, 390 N.J.Super. at 95-96, 914 A.2d 402 (prior to 2001, the three state agencies each promulgated a distinct set of regulations “establishing controls on the continuing affordability of housing constructed pursuant to the FHA”).
In the matter before me, none of plaintiffs’ units were constructed or approved by COAH after July 17, 1989, which is when the recapture regulation was first adopted, nor were any of those units constructed pursuant to a housing plan approved by COAH after that date. Instead, each of the affordable housing units at issue in this case was constructed much earlier, pursuant to the Urban League litigation. Likewise, all of the relevant documents relating to the deed restrictions pre-date the enactment of the FHA and its implementing regulations. Inasmuch as none of the Society Hill units were constructed pursuant to, or under the auspices of, COAH or the FHA, the UHAC regulations do not apply to them as a matter of law.
Even if the UHAC regulations did control, however, their application would not yield a contrary result. The evolution of
In developing housing elements, municipalities shall determine measures to assure that newly constructed low and moderate income sales units remain affordable to low and moderate income households for an appropriate period of not less than 30 years. The administrative entity shall do so by requiring all conveyances of newly constructed low and moderate income sales units subject to the Act, to contain the deed restriction and mortgage lien adopted by the Council.
[N.J.A.C. 5:93-9.2(a) (emphasis added) ].
As contemplated by COAH, municipalities were clearly empowered to impose deed restrictions, but only on newly constructed low and moderate income units subject to the FHA. The imposition of affordability controls on homes constructed 'prior to the enactment of the FHA itself, were not encompassed within the regulation and would, therefore, have been excluded from its reach. See 21 N.J.R. 2021 (July 17, 1989) (stating that the deed restrictions were intended to apply to “newly constructed” low and moderate income units); see also 36 N.J.R. 5096(a) (November 15, 2004) (stating that the 2004 UHAC regulations “provide mechanisms for the 30-year deed restrictions to be continued for new units. The Council cannot, however, retroactively change an existing deed restriction ”) (emphasis added).
However, even though the COAH and UHAC regulations are not expressly limited to newly constructed units, any such unit that was deed restricted pursuant to COAH’s grant of substantive certification, or any court judgment, grant agreement or contract prior to December 20, 2004, would, in any event, still be exempt under N.J.A.C. 5:80-26.5(a)(2). That regulation provides:
(a) Each restricted ownership unit shall remain subject to the requirements of this subchapter until the municipality in which the unit is located elects to release the unit from such requirements pursuant to action taken in compliance with (g) below. Prior to such a municipal election, a restricted ownership unit must remain subject to the requirements of this subchapter for a period of at least 30 years; provided, however, that
*449 2. Any unit that, prior to December SO, SOOi, received substantive certification from COAH, was part of a judgment of compliance from a court of competent jurisdiction or became subject to a grant agreement or other contract with either the State or a political subdivision thereof, shall have its control period governed by said grant of substantive certification, judgment or grant agreement or contract
[Emphasis added.]
Indeed, the HMFA itself echoes and buttresses this conclusion as well: “units whose control periods are governed by substantive certification, agreement or contract, and 95/5 units,
The language of N.J.A.C. 5:80-26.5 is plain and unambiguous. Its drafters expressly intended to exclude any unit whose control period was created or governed by a “grant of substantive certification, judgment or grant agreement or contract” prior to December 20, 2004.
My conclusion that the Township’s actions are void as to all plaintiffs, does not, however, afford the Patels relief from their deed restriction. Unlike the other plaintiffs, (whose resale and rental controls were extended without their consent), the Patels, prior to the purchase of their unit in 2013, purportedly voluntarily agreed to, and their deed specifically reflects, an extension of resale and rental controls on their unit for an additional thirty years. That extension may, in fact, be legally and/or equitably enforceable, and places them in a different position from the other plaintiffs. Since the UHAC regulations do not preclude a voluntary extension of affordability controls through additional deed restrictions, I am unwilling to interfere with or invalidate them absent proof of duress, undue influence, or some other recognized basis upon which they would legally or equitably be relieved of this burden.
Inasmuch as the Patels’ complaint essentially seeks a reformation of their deed, relief from the specific price and occupying restrictions contained therein, and an order enjoining the Township from enforcing those deed restrictions, their claims require
4. Conclusion
After carefully examining the evolving regulatory framework leading to the ultimate adoption of the UHAC regulations, I am satisfied that the Township’s attempts to extend the thirty-year resale and rental restrictions in plaintiffs’ deeds for an additional thirty-year period was beyond its authority and was, accordingly, unlawful, of no effect, and ultra vires. The applicable resale controls established by the Urban League consent order and contained in: (1) Piseataway’s original affordable housing plan; (2) the project’s master deed; and (3) each unit deed, were not subject to unilateral modification. As such, the thirty-year deed restrictions extending resale and rental prices to those units affordable to low and moderate income persons expired as to all plaintiffs, except the Patels, and are of no further force and effect.
An order granting final judgment to this effect and incorporating this opinion by reference, will be entered simultaneously herewith.
Urban League of Greater New Brunswick v. Mayor and Council of the Borough of Carteret, 142 N.J.Super. 11, 359 A.2d 526 (Ch.Div. 1976) (Furman, J.S.C.), rav’d, 170 N.J.Super. 461, 406 A.2d 1322 (App.Div. 1979), rav’d and remanded sub nom., S. Burlington Cty. NAACP v. Twp. of Mount Laurel, 92 N.J. 158, 340, 456 A.2d 390 (1983) (trial judge’s opinion “rings with the true sound of the constitutional obligation").
Dushyant and Monika Patel acquired their unit in 2013.
As explained in more depth below, the UHAC regulations supplanted the COAH regulations in order to remedy inconsistent or conflicting regulatory schemes on the resale and rental controls. See In re Adoption of Uniform Hous. Affordability Controls, 390 N.J.Super. 89, 95-96, 914 A.2d 402 (App.Div. 2007).
The UHAC regulations were subsequently ratified and adopted by both COAH and the DCA. See In re Adoption of Unifonn Hous. Affordability Controls, supra, 390 N.J.Super. at 96-97, 914 A.2d 402; N.J.A.C. 5:93-9.17; and NJ.A.C. 5:43-4.10.
A "95/5 unit” is "a restricted ownership unit that is part of a housing element that received substantive certification from COAH pursuant to NJ.A.C. 5:93 before October 1, 2001." NJ.A.C. 5:80-26.2.
Additionally, plaintiffs' units were not constructed or approved by COAH prior to January 1, 2001 — the date set forth in the 2001 UHAC regulations, or even July 17, 1989 — the date that COAH first enacted regulations providing for a recapture of deed-restricted affordable units.
Because I have determined Piscataway's actions have been ultra vires and void as a matter of regulatory and statutory interpretation, I need not address whether retroactive application of the regulations is permitted or whether the Township has violated either the New Jersey or united States Constitutions.
Accordingly, a separate order directing a severance and transfer to the Chancery Division has been entered simultaneously with the issuance of this opinion.
Case-law data current through December 31, 2025. Source: CourtListener bulk data.