Prior to 2011, courts in New Jersey applied the “time of decision” rule, under which a decision concerning a municipal land use application would be based on the municipal ordinance as it existed at the time the application or appeal was decided. The time of decision rule allowed municipalities to block proposed developments by changing the applicable zoning ordinance while development applications were pending. Then the Legislature put an end to this unfair practice by amending the Municipal Land Use Law to establish a “time of application” rule. This statute provides that “those development regulations which are in effect on the date of submission of an application for development shall govern the review of that application for development and any decision made with regard to that application …” N.J.S.A. 40:55D-10.5.

The time of application rule has been of considerable assistance to property owners and developers by preventing municipalities from blocking development with eleventh hour changes to zoning ordinances after the developer has spent time and money pursuing a lengthy and costly application process. Sometimes, however, objectors to development have sought to use the time of application rule in an effort to block or delay development. This arises in situations where, while an application is pending, the municipality amends its ordinance in a way that is favorable to the developer, such as eliminating the need for a requested variance. Objectors have contended that a developer may not take advantage of the new ordinance without submitting a new application and starting the public hearing process over.

In a precedential published decision, the Appellate Division of Superior Court rejected that reading of the time of application rule. In Jai Sai Ram, LLC v. South Toms River Planning/Zoning Board, the municipality amended its ordinance, after a use variance application was filed, to specifically permit the use that was the subject of the application. While the court acknowledged that “the literal terms of the statute could be construed to prevent a favorable land use amendment from applying to a pending application,” it found that such a reading “would produce an absurd result, at odds with the clear purpose of the legislation.” The bottom line: when an ordinance is amended during the pendency of an application in a manner that is more favorable to the developer, the developer gets the benefit of the amendment without having to start from scratch.