There’s No Conservation Restriction in My Title: So Why Can’t I Build?

September 4, 2019 | No Comments
Posted by Steven M. Dalton

A title search is a vital component of the real property acquisition process. It would be hard to criticize a buyer who proceeds with a transaction, intending to develop or redevelop a parcel, after reviewing title and finding no evidence of a recorded conservation restriction. However, the absence of a conservation restriction instrument recorded in the chain of title may not necessarily mean that the subject parcel is free of restrictions. Conservation restrictions may be applicable by operation of law regardless of whether a deed restriction instrument has been recorded.

This issue was discussed in a recent unpublished Appellate Division decision. In Barry v. NJDEP, App. Div. No. A-2428-17T2, the court affirmed an Office of Administrative Law decision holding that notwithstanding the absence of a recorded instrument, the conservation restriction was applicable by operation of law based on the property owner’s having availed itself of the benefits of a permit issued by NJDEP. The applicable permit required the recording of a conservation restriction for regulated dune areas as a precondition to commencement of construction. The permit provided that commencement of construction constituted acceptance of all the terms and conditions of the permit. Although the conservation restriction instrument was not recorded, construction took place and, as a result, the court agreed that the restriction was accepted by the permittee and applicable as if it had been recorded.

The ability to modify or release a conservation restriction, while not insurmountable, is often a difficult undertaking requiring governmental agency support and approval. NJDEP Commissioner approval is required following a public hearing process and a determination that the release will not jeopardize the public’s interest in protection of the regulated resource. Successful releases typically involve some type of demonstration of a “net benefit” in the form of mitigation compensation.

Persons acquiring property for development purposes should thoroughly review the history of approvals for the subject parcel and include a careful condition compliance investigation as part of the pre-acquisition due diligence to protect themselves against the negative consequences of unrecorded, yet applicable, conservation restrictions prohibiting development.

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