Cherokee LCP Land, LLC v. Linden Planning Bd., 234 N.J. 403 (2018). The Municipal Land Use Law, N.J.S.A. 40:55D-1 et seq. (“MLUL”) confers standing to actions of municipal land use agencies only on those who qualify as an “interested party.” N.J.S.A. 40:55D-4 defines “interested party” as “any person … whose right to use, acquire, or enjoy property is or may be affected by any action taken under [the MLUL].” The question in today’s case, which split the Court 5-2, was whether the holder of a tax sale certificate has standing to challenge a planning board’s approval of a development application on a neighboring property.
In an opinion by Justice Solomon, the majority, applying de novo review of this purely legal question, found standing, reversing the Law Division and Appellate Division’s decisions on the issue. Justice Timpone, joined by Chief Justice Rabner, disagreed and would have denied standing.
Citing prior Supreme Court cases, Justice Solomon explained that although a tax sale certificate does not convey title to its holder, it does give the holder “an inchoate interest” that consists of three rights, one of which is “the right to acquire title by foreclosing the equity of redemption of all outstanding interests, including that of the property owner.” That right, he said, is “significant in resolving standing under the MLUL.” Another right, “‘the right to use’ the property in a limited manner ‘in order to make repairs, or abate, remove or correct any condition harmful to the public health, safety and welfare, or any condition that is materially reducing the value of the property,” which arises from the Tax Sale Law, N.J.S.A. 54:5-86(c), also contributed to the conclusion that the holder of a tax sale certificate has the “right to use, acquire, or enjoy property,” as required for MLUL standing.
But that did not end the inquiry, as Justice Solomon observed. A tax sale certificate holder must also show that his, her, or its rights “[are] or may be affected by any action taken under [the MLUL].” Thus, “not every tax lienholder has standing to challenge a land use application.” Instead, determinations of their standing must proceed on a case-by-case basis. Plaintiffs here alleged that the proposed development on the neighboring property would (among other things) “interfere with an easement on the [lienholder’s] Property, and substantially modify stormwater management on the Property.” Thus, the lienholder here “may have standing” due to those effects on its rights.
The Court remanded the matter to the Law Division. Justice Solomon cautioned that the record was deficient in various respects, and that a fuller record would need to be made on remand to the extent that any issue requiring clarification is relevant to the standing question. But the Court’s ruling was that the decisions below that the lienholder could not have standing could not stand.