Local Law Blogs

Standing to Negotiate Property Acquisitions

A redevelopment entity may authorize a redeveloper to negotiate directly with the owners of properties slated for condemnation under a redevelopment plan. This authorization may be granted by way of a redeveloper’s agreement with the condemning authority. The redeveloper should be aware, however, that it will be held to the same legal standards as the redevelopment entity. Additionally, a redeveloper must take care not to tie the hands of the condemning authority in making a good faith offer if, later, the redevelopment entity must institute formal condemn proceedings under the Eminent Domain Act of 1971.

For example, it would be unwise for a redeveloper to insert a provision in its redeveloper’s agreement with the redevelopment entity that allows the redeveloper to place a cap on just compensation or make settlement in excess of a specific purchase price contingent upon the redeveloper’s consent. Indeed, the trial court in City of Long Branch v. Brower (an unreported decision issued on June 22, 2006) spoke disapprovingly of such arrangements indicating that “[h]ad the offer for fair market value been stunted by this ‘ceiling’ the court would have no choice but to dismiss the action for failure to engage in bona fide negotiations.

Full post as published by New Jersey Law Blog on October 06, 2008 (boomark / email).