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New Jersey's Eminent Domain Laws and Property Rights

Property Rights in the State of New Jersey

New Jersey’s property right protections are comparable in many ways to those found in other states and in other state constitutions. All exercises of eminent domain in New Jersey are to be instituted pursuant to the New Jersey Eminent Domain Act, N.J.S.A. 20:3-1, et seq. (“NJEDA”). The NJEDA permits condemning authorities to utilize quick take powers by depositing estimated compensation into the Trust Fund of the Superior Court of New Jersey and making those funds available to all parties named in the litigation. New Jersey also has a Relocation Assistance Act, N.J.S.A. 20:4-1, et seq. which provides occupants of properties seized by eminent domain with relocation assistance in general compliance with the provisions of the Uniform Relocation Assistance Act and federal law.

New Jersey law does not permit “economic development” takings but, as a practical matter, many municipal agencies in New Jersey use eminent domain to take properties under New Jersey’s Local Redevelopment and Housing Law, N.J.S.A. 40A:12A-1, et seq. (“NJLRHL”). While many states enacted eminent domain reform legislation to restrict such takings following the U.S. Supreme Court’s 2005 decision in Kelo v. New London, New Jersey had no such reform until late 2013, when the State enacted P.L. 2014, C. 159, which (a) codified some property rights protections created by New Jersey case law after Kelo was decided; and (b) for the first time gave local government agencies the right to undertake redevelopment projects under the NJLRHL, without having the power of eminent domain. This change in the law has spurred redevelopment projects without condemnation in recent years.

Finally, unlike several other states, New Jersey does not provide for the recovery of a landowner’s attorneys’ fees, expert witness fees and costs in defending the condemnation action and in advocating for full just compensation, except for inverse condemnation matters. The fact that landowners must pay for these expenses themselves can result in less than full compensation being paid for the taking of property.

Meet OCA's New Jersey Attorney

Anthony F. DellaPelle, CRE

Anthony F. DellaPelle is a shareholder in the law firm of McKirdy, Riskin, Olson & DellaPelle, P.C., in Morris Plains, New Jersey. He is a Certified Civil Trial Attorney by the New Jersey Supreme Court. He has represented property owners in eminent domain and redevelopment for more than 30 years. Tony is a former member of the Board of Directors of Owners Counsel of America. He is also a member of the Executive Committee of the Board of Directors of the Counselors of Real Estate®, www.cre.org, an international organization of real estate professionals limited to approximately 1,000 worldwide members. He has long been recognized by his peers as a “New Jersey Super Lawyer” in the New Jersey Monthly Magazine, being selected by that publication as one of New Jersey’s Top 10 attorneys for 2012, and as one of New Jersey’s Top 100 attorneys every year since 2009.

A SUMMARY OF NEW JERSEY'S EMINENT DOMAIN LAWS

The following responses are intended to provide general information about eminent domain laws in the featured state. Such information does not constitute legal advice. Anyone interested in learning more about eminent domain law and the impact it may have on a given set of facts should consult with an OCA attorney or another attorney experienced in handling eminent domain cases.

  • Who Can Exercise Eminent Domain Laws?

    The exercise of eminent domain power in New Jersey is delegated by the State Legislature under Articles I and IV of the New Jersey Constitution to a broad range of State, county and municipal local agencies, public authorities and boards, and also to public utilities. The enabling legislation for any government agency specifies the extent (and possible limits) of each agency’s eminent domain powers. Consequently, it is important to confirm at the outset of any case whether the entity seeking to exercise the power of eminent domain has received a lawful delegation from the State to do so, and whether that entity is properly exercising its eminent domain powers. All entities which have the power of eminent domain in New Jersey must follow the provisions of the NJEDA, except for bodies organized and administered as a result of or under compacts between New Jersey and other states.

  • What Are the Legal Requirements for Exercising the Power?

    Under New Jersey law, property can only be condemned for a lawful public use or public purpose. There is a four-step process for condemnation in New Jersey: (1) an attempt to resolve the acquisition through bona fide negotiations before condemnation litigation is commenced; (2) determination by final judgment by a court that the condemning agency has the power of eminent domain and has properly exercised that power; (3) a non-bonding arbitration of the issue of just compensation by a panel of commissioners appointed by the court; and (4) trial by jury on the issue of just compensation.

    New Jersey’s legal process for eminent domain is set forth in the NJEDA, N.J.S.A. 20:3- 1, et seq., and implemented in special court eminent domain court rules at N.J.R. &:73- 1, et seq.

  • What Limitations or Defenses Exist?

    Once a condemning agency has made the decision to proceed with a public project which requires the acquisition of property necessary for the project, governmental entity, the grounds to challenge the condemnation are limited under New Jersey law. Defenses can, however, be raised as to whether a proper public use exists for the condemnation or whether the prerequisite legal authority to condemn is present. In such situations the Court will review the submitted evidence and rule on the defenses. But in other matters deference is generally given to the condemning authority in its decision to condemn. For instance, the court will not review and substitute its opinion as to whether there is a need to take the property or whether the public project is feasible, unless it can be shown that the decision is so oppressive, arbitrary or unreasonable as to suggest bad faith. However, if the proposed taking is for local redevelopment purposes under the NJLRHL and there is a challenge that the taking is unnecessary, the court may schedule a trial to confirm whether the taking is, in fact necessary to achieve a valid public purpose.

  • What Constitutes a Public Purpose?

    Like the U.S. Constitution, New Jersey’s Constitution limits the use of eminent domain to “public use,” a term which over time has come to include public purpose as well. Typical uses that satisfy a public use or purpose can include roads, parks, schools, other public buildings, or other projects or undertakings that serve a public good or need. For takings under the NJLRHL, the remediation of blighted conditions is also considered to be a valid public purpose under New Jersey’s Constitution, even though such takings are typically paid for by one private party who ultimately benefits as the designated “redeveloper” for a local redevelopment project.

  • How is Just Compensation Determined?

    The definition of just compensation under New Jersey law constitutionally requires that payment be made in an amount which will make the owner whole for the loss of the property. This amount is usually measured by the fair market value of the property being taken from the landowner as of the date of taking. In partial takings, just compensation also includes any diminution in value to the landowner’s remaining property. Both the condemning agency and the owner are required to consider ways to mitigate the damages or impact to the landowner’s remaining property in partial takings cases – this concept is known as a “cure” for the impacts caused by a partial taking.

    Just compensation is first determined in New Jersey through a non-binding arbitration hearing, known as a condemnation commissioners’ hearing. The commissioners are three court-appointed arbitrators in the county where the property is located. After the commissioners’ award is entered, either or both parties can then appeal the award and request that just compensation be determined in a trial by jury in the Superior Court of New Jersey in the county where the property is located. In the event of such appeal to a trial, the award of the commissioners will not be considered by the court or disclosed to the jury.

  • How Is Fair Market Value Defined?

    New Jersey law defines “fair market value” in a condemnation case as the “the price that would be mutually agreeable to a willing buyer and a willing seller, neither being under compulsion to act”, as of the valuation date. The valuation date is set by statute and is usually measured as of the date upon which the condemnation complaint is filed in the Superior Court of New Jersey. In making a determination of fair market value in eminent domain proceedings, the owner is entitled to received the value for the highest and best use of the property as of the valuation date, which can be its current use or any other use(s) for which the property has value, including future uses that may be reasonably probable to occur.

    Generally, the property’s fair market value is the subject of opinion testimony by expert real estate appraisers, who will often use different valuation approaches to determine the value of the property, the most common being the comparable sales, income and cost approaches.

  • What About Recovering Damages to Remaining Property?

    For partial takings, just compensation does include any diminution in value (i.e. damages) to an owner’s remaining property. Thus, when a condemning authority takes a portion of a landowner's property, it is obligated to pay compensation not only for the part taken, but also for any loss in value to the property not being taken. To be compensated for damages to remaining property, such damages must result from loss of the portion of the original property condemned, rather than from the condemnor’s use of other land, or from another person’s use of that land. Unfortunately, in New Jersey a landowner is not entitled to claim damages for business loss caused by the public project on the theory that the business itself can be relocated, except in cases of temporary takings where business losses and damages may be compensable.

  • Is the Landowner Entitled to Recover Reasonable Attorney Fees? Expert Fees? Litigation Costs?

    Unlike the law in several other states, attorney’s fees, expert witness fees, and other litigation expenses and costs incurred by an owner in defending a condemnation action are generally not recoverable. There are three exceptions to this rule, however. Such fees and costs fees may be recoverable if it is determined that the state does not have the right to condemn the property, N.J.S.A. 20:3-26, or if the condemning authority abandons the proceeding, N.J.S.A. 20:3-35, or in the event of an inverse condemnation.

REFERENCES AND LINKS

New Jersey

McKirdy, Riskin, Olson and DellaPelle
201 Littleton Road, Suite 135
Morristown, NJ 07950
Tel:(973) 539-8900 | Fax:(973) 984-5529
adellapelle@mckirdyriskin.com | www.mckirdyriskin.com

Anthony DellaPelle has tried dozens of contested condemnation jury trials and handled several hundred condemnation hearings before commissioners. In recent years Mr. Della Pelle has represented property owners across New Jersey in significant condemnations against various State government agencies, including the New Jersey Department of Transportation, New Jersey Transit Corporation, New Jersey Turnpike Authority, New Jersey Schools Development Authority, New Jersey Economic Development Authority, the Port Authority of New York and New Jersey, and U.S. Army Corps of Engineers as well as various local and County agencies.

Tony has been appointed by the Superior Court of New Jersey as an expert in real estate valuation matters, has published several articles and lectures regularly, both in New Jersey and nationally,on eminent domain and real estate valuation issues. He appears often on national television, where he provides commentary on eminent domain and property rights issues around the country. He is also the author of the New Jersey Condemnation Law Blog, www.njcondemnationlaw.com, and the New Jersey Property Tax Law Blog, www.realestatetaxappealsnj.com.

Active in civic affairs, Tony serves as a Trustee of the Great Swamp Watershed Association, a land preservation trust. He recently competed a term as the President of the Franklin & Marshall College Alumni Association Board of Directors. He also has served as Trustee of Franklin & Marshall College, served for several years as Vice President and Trustee of the New Jersey Hall of Fame Foundation. He served as a member of New Jersey Governor Chris Christie’s Transition Team, and was appointed by Governor Christie to serve as a Commissioner of the New Jersey Public Broadcasting Authority, where he was Vice Chair and Treasurer for nearly all 7 years of his term.

Significant Eminent Domain and Property Rights Representations and Reported Decisions

  • In the condemnation of an underground sewer easement in Hudson County, a jury awarded Mr. DellaPelle’s client just compensation totaling $5,058,900, which was nearly 10 times the amount of $523,200 originally offered for the taking by the regional sewerage authority.
  • In a redevelopment taking involving commercial property near a PATH station, the redeveloper’s offer of compensation was $8,900,000. Mr. DellaPelle was able to obtain a settlement of this matter, before a condemnation complaint was even filed, in which his client was paid $16,800,000 as just compensation.
  • In a redevelopment case involving oceanfront land in Monmouth County, New Jersey, the City and its designated redeveloper offered his client $422,500. Prior to trial, Mr. DellaPelle was able to obtain a settlement prior to trial whereby his client received $2,040,000 as just compensation.
  • In a condemnation by the New Jersey Department of Transportation for highway widening purposes in Monmouth County, the State offered his clients $1,400 for a partial taking of their commercial property. A jury awarded his clients $63,500, more than 45 times the amount of the original offer.
  • In a condemnation involving the preservation of open space of land by a County Park Commission, the County offered compensation to his client in the amount of $320,000. Prior to trial, Mr. DellaPelle obtained a settlement requiring the County to pay $1,150,000 as just compensation.

Speaking Engagements

  • American Law Institute, Eminent Domain and Land Valuation Litigation, “,” January 2016, Austin, Texas.
  • American Law Institute, Eminent Domain and Land Valuation Litigation, “Severance Damages in Partial Takings Cases: Lessons Learned and Future Considerations,” February 2015, San Francisco, California.
  • American Law Institute, Condemnation 101, “Tips and Traps for the Beginning Eminent Domain Trial Lawyer,” February 2015, San Francisco, California.
  • American Law Institute, Eminent Domain and Land Valuation Litigation, “Condemnation Issues in the Aftermath of Natural Disasters: Case Studies in Louisiana and New Jersey,” January 2014, New Orleans, Louisiana.
  • American Law Institute, Condemnation 101, “Damages and Benefits in Partial Taking Cases: Legal Standards and Practical Considerations,” January 2014, New Orleans, Louisiana.
  • American Law Institute, Eminent Domain and Land Valuation Litigation,”How to Develop and Implement a Business Plan for an Eminent Domain Practice,” January 2013, Miami Beach, Florida.
  • American Law Institute, Condemnation 101, “Strategic Motion Practice: A Foundation for Winning Your Trial,” January 2012, San Diego, California.
  • American Law Institute, Eminent Domain and Land Valuation Litigation, “Diamonds in the Rough: Ways To Handle the Valuation of Difficult Properties,” February 2011, Coral Gables, Florida.

Publications

A selection of Tony’s most recent written work is highlighted below. To view a complete list of his published articles, please visit here.

Professional Affiliations

  • Member, American Bar Association, Section of Litigation’s Condemnation, Zoning and Land Use Committee
  • Co-Chair, Inverse Condemnation Subcommittee
  • Member, Community Builders’ and Remodelers’ Association
  • Member, New Jersey State Builders’ Association, Member
  • Member, Redevelopment Committee
  • Faculty, New Jersey Association of Realtor’s Graduate Realtor Institute, faculty member since 1989
  • Member, Urban Land Institute
  • Designated Member, The Counselors of Real Estate®, www.cre.org, an international organization of real estate professionals recognized as the leading advisors in complex real property matters. Tony is among the fewer than 50 practicing attorneys who hold a CRE® designation; Member, Board of Directors; Co-Chair, Education Subcommittee; Vice-Chair, New Jersey Chapter
  • Board of Directors, Owners’ Counsel of America (2015-2018)

Education

  • Franklin & Marshall College, Bachelor of Arts degree in Economics and English, 1984
  • Seton Hall University School of Law, Juris Doctor,1987

Bar Admissions and Memberships

  • New Jersey, State and Federal courts, 1987
  • New York, State and Federal courta, 1988
  • American Bar Association
  • New Jersey State Bar Association
  • Morris County Bar Association

Honors and Awards

  • AV® Preeminent™ Peer Review Rated by Martindale-Hubbell®
  • Selected as a New Jersey Super Lawyer as published in New Jersey Monthly Magazine
  • Recognized by New Jersey Monthly Magazine as one of New Jersey’s Top 100 attorneys annually since 2009
  • Selected as one of New Jersey’s Top 10 attorneys, 2012
  • Recognized as one of New Jersey’s top real estate attorneys by Real Estate New Jersey Magazine, 2009

Anthony DellaPelle has tried dozens of contested condemnation jury trials and handled several hundred condemnation hearings before commissioners. In recent years Mr. Della Pelle has represented property owners across New Jersey in significant condemnations against various State government agencies, including the New Jersey Department of Transportation, New Jersey Transit Corporation, New Jersey Turnpike Authority, New Jersey Schools Development Authority, New Jersey Economic Development Authority, the Port Authority of New York and New Jersey, and U.S. Army Corps of Engineers as well as various local and County agencies.

Tony has been appointed by the Superior Court of New Jersey as an expert in real estate valuation matters, has published several articles and lectures regularly, both in New Jersey and nationally,on eminent domain and real estate valuation issues. He appears often on national television, where he provides commentary on eminent domain and property rights issues around the country. He is also the author of the New Jersey Condemnation Law Blog, www.njcondemnationlaw.com, and the New Jersey Property Tax Law Blog, www.realestatetaxappealsnj.com.

Active in civic affairs, Tony serves as a Trustee of the Great Swamp Watershed Association, a land preservation trust. He recently competed a term as the President of the Franklin & Marshall College Alumni Association Board of Directors. He also has served as Trustee of Franklin & Marshall College, served for several years as Vice President and Trustee of the New Jersey Hall of Fame Foundation. He served as a member of New Jersey Governor Chris Christie’s Transition Team, and was appointed by Governor Christie to serve as a Commissioner of the New Jersey Public Broadcasting Authority, where he was Vice Chair and Treasurer for nearly all 7 years of his term.

Significant Eminent Domain and Property Rights Representations and Reported Decisions

  • In the condemnation of an underground sewer easement in Hudson County, a jury awarded Mr. DellaPelle’s client just compensation totaling $5,058,900, which was nearly 10 times the amount of $523,200 originally offered for the taking by the regional sewerage authority.
  • In a redevelopment taking involving commercial property near a PATH station, the redeveloper’s offer of compensation was $8,900,000. Mr. DellaPelle was able to obtain a settlement of this matter, before a condemnation complaint was even filed, in which his client was paid $16,800,000 as just compensation.
  • In a redevelopment case involving oceanfront land in Monmouth County, New Jersey, the City and its designated redeveloper offered his client $422,500. Prior to trial, Mr. DellaPelle was able to obtain a settlement prior to trial whereby his client received $2,040,000 as just compensation.
  • In a condemnation by the New Jersey Department of Transportation for highway widening purposes in Monmouth County, the State offered his clients $1,400 for a partial taking of their commercial property. A jury awarded his clients $63,500, more than 45 times the amount of the original offer.
  • In a condemnation involving the preservation of open space of land by a County Park Commission, the County offered compensation to his client in the amount of $320,000. Prior to trial, Mr. DellaPelle obtained a settlement requiring the County to pay $1,150,000 as just compensation.

Speaking Engagements

  • American Law Institute, Eminent Domain and Land Valuation Litigation, “,” January 2016, Austin, Texas.
  • American Law Institute, Eminent Domain and Land Valuation Litigation, “Severance Damages in Partial Takings Cases: Lessons Learned and Future Considerations,” February 2015, San Francisco, California.
  • American Law Institute, Condemnation 101, “Tips and Traps for the Beginning Eminent Domain Trial Lawyer,” February 2015, San Francisco, California.
  • American Law Institute, Eminent Domain and Land Valuation Litigation, “Condemnation Issues in the Aftermath of Natural Disasters: Case Studies in Louisiana and New Jersey,” January 2014, New Orleans, Louisiana.
  • American Law Institute, Condemnation 101, “Damages and Benefits in Partial Taking Cases: Legal Standards and Practical Considerations,” January 2014, New Orleans, Louisiana.
  • American Law Institute, Eminent Domain and Land Valuation Litigation,”How to Develop and Implement a Business Plan for an Eminent Domain Practice,” January 2013, Miami Beach, Florida.
  • American Law Institute, Condemnation 101, “Strategic Motion Practice: A Foundation for Winning Your Trial,” January 2012, San Diego, California.
  • American Law Institute, Eminent Domain and Land Valuation Litigation, “Diamonds in the Rough: Ways To Handle the Valuation of Difficult Properties,” February 2011, Coral Gables, Florida.

Publications

A selection of Tony’s most recent written work is highlighted below. To view a complete list of his published articles, please visit here.

Professional Affiliations

  • Member, American Bar Association, Section of Litigation’s Condemnation, Zoning and Land Use Committee
  • Co-Chair, Inverse Condemnation Subcommittee
  • Member, Community Builders’ and Remodelers’ Association
  • Member, New Jersey State Builders’ Association, Member
  • Member, Redevelopment Committee
  • Faculty, New Jersey Association of Realtor’s Graduate Realtor Institute, faculty member since 1989
  • Member, Urban Land Institute
  • Designated Member, The Counselors of Real Estate®, www.cre.org, an international organization of real estate professionals recognized as the leading advisors in complex real property matters. Tony is among the fewer than 50 practicing attorneys who hold a CRE® designation; Member, Board of Directors; Co-Chair, Education Subcommittee; Vice-Chair, New Jersey Chapter
  • Board of Directors, Owners’ Counsel of America (2015-2018)
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