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A grandfather clause is an exception that allows an old rule to continue to apply to some existing situations, when a new rule will apply to all future situations. It is often used as a verb: to grandfather means to grant such an exemption. For example, a grandfathered power plant might be exempt from newer and tougher pollution laws. This extends the idea of a rule not being retroactively applied.
This page briefly discusses the topic of grandfathered uses as it relates to zoning and land use in New Jersey.
One goal of Zoning is to separate property uses into distinct districts (residential, commercial, industrial, etc.) and to keep uses within each area or zone uniform. For example, if an area is zoned for residential use, no businesses will normally be permitted to open there. But, what happens to a business that existed and was operating prior to the time when its location was zoned residential? Or what happens to a 3 family house if new regulations only permit single family homes?
At this point, the constitutional prohibition against taking property without just compensation comes into play. If a use predates the zoning plan, it will be permitted to remain, because the government lacks the power to simply close a business in a zone that becomes residential, or require a home in an industrial zone to be torn down, unless it is willing to compensate the owner for the loss. Such exceptions are called non-conforming uses. Commonly, the portion of the zoning statue allowing prior non-conforming uses is called a grandfather clause and such a use is said to be grandfathered in.
Non-conforming uses, however, are not exempt from all zoning regulation. While they cannot be taken (without compensation), the government is not required to allow them to change or expand. The use is generally limited to what existed when the zoning ordinance was adopted. Also, if the non-conforming use is intentionally abandoned, the grandfather rights are lost, and the nonconforming use cannot be restarted at a later date.
However, the law also allows municipalities to require reasonable Site Plan review based on health and safety concerns. In other words, the municipality is not powerless to allow a dangerous condition to continue, and could require reasonable health and safety changes in association with the restoration. But that Review cannot strangle the restoration with technical issues unrelated to significant health and safety problems appurtenant to the site.
If a structure is completely destroyed by fire or Act of God, in most instances the pre-existing, non-conforming use can not be rebuilt.
The hope is that with these restrictions in place, non-conforming uses will decrease and cease over time.
Cherokee is very familiar with this area of the law, because the majority of our property renovation work is repairing existing properties, and returning them to safe productive use. We often acquire by foreclosure vacant properties in need of repair. Sometimes these repairs are merely cosmetic, and sometimes we're rebuilding half the structure that was destroyed by a fire, or simply rotted away over the years.
Occasionally we are questioned (or challenged) by well intentioned municipal officials who believe (or wish) that our use of an existing property should conform to the newest local zoning laws or redevelopment plans. To the extent that we can accommodate these requests, we do. Our goal is to be a good corporate neighbor, and to be a positive contributor to the communities within which we work.
However, we can't always accommodate these challenges, often because the result would substantially reduce the value of the property, or comprise or delay its use. This would impede its utility to our community development objectives, and would unfairly depress the value of the property.
One of our missions is to preserve safe, affordable housing, or restore commercial properties so they can create local jobs and generate taxes. In many instances we can do this, while still earning a profit, even without subsidizes, because we acquired the property by foreclosure, and because we don't have to incur the costs and delays of obtaining zoning or site plan approvals.
In many situations, current zoning would not permit us to recreate the same use or density. Consequently, affordable housing becomes impossible without receiving government subsidies and tax breaks. Further, by renovating what already exists, we preserve the character of a neighborhood.
If a property is occupied when Cherokee becomes the owner, we insure that it is safe, in conformity with all safety standards for electrical, plumbing, etc. If the property is vacant when we get it, we clean and repair it, and return it to productive use as a rental.
In addition to straight forward repairs, including roofs, we usually make cosmetic improvements, as well as upgrade the fixtures and cabinets, install high efficiency windows and doors, and make other improvements that protect the property, provide a more desirable residential or commercial premise for our tenants, and set an example for our neighbors. We take pride in our properties, and we want to demonstrate to local officials that Cherokee is a responsible property owner committed to improving the community.
We do everything we can to build a cordial, productive relationship with our neighbors, with our tenants, and with the local municipality. However this is a two-way street, and we ask that others treat us fairly, and in conformity with the law.
In those rare circumstances when a municipality refuses to allow us to continue a pre-existing non-conforming use, and if this refusal is not in conformity with the courts interpretation of New Jersey Statutes (New Jersey Statute 40:55D-68), we are forced to protect our property rights. If we are unable to reach an equitable arrangement with the municipality, our only alternative is to seek relief in Chancery Court. This is always our last resort, but we are prepared to seek this protection if we're left with no reasonable alternative.
Cherokee's property rehabilitation activities are agents for positive growth in a community.
For the benefit of municipalities who wish to better understand this area of the law, we offer the following material for you to review with your planning and zoning officials, and with your municipal attorneys.
We welcome your calls seeking to better understand this topic, and how Cherokee will help rejuvenate existing commercial and residential properties in your community.