Earlier today, the Appellate Division released its decision in Oceanport Holding, L.L.C. v. Borough of Oceanport, et al., docket no. A-6127-05T3. The issue on appeal was whether the trial court properly granted summary judgment to the municipality on the grounds that the plaintiff-developer did not engage in sufficient negotiations before filing the Mount Laurel litigation and seeking a builder’s remedy. The trial court granted summary judgment and dismissed the entire lawsuit before determining whether the municipality complied with its affordable housing obligations.

The Appellate Division reversed and remanded to the trial court. While on the surface the Appellate Division ruled in favor of the plaintiff-developer, the Oceanport decision restricts a plaintiff-developer’s entitlement to a builder’s remedy by breathing life into the once-thought dead requirement that a plaintiff-developer must engage in pre-suit negotiations in order to obtain a builder’s remedy. As stated on page 10 of the decision, “the requirement set forth in Mount Laurel II that a plaintiff-developer must attempt to obtain relief without litigation is relevant only to a developer’s entitlement to a builder’s remedy.”

The Oceanport decision makes clear that Mount Laurel litigation is to be divided into two phases. In the first phase, the trial court determines whether the municipality has complied with its affordable housing obligations. If the municipality has not complied, the municipality has a period of time to revise its land use regulations and bring itself into compliance. In the second phase, the trial court assesses whether the municipality’s revised regulations comply with the Mount Laurel doctrine and determines whether the plaintiff-developer is entitled to a builder’s remedy.

In Oceanport, the Appellate Division determined that the trial court erred in dismissing the entire Mount Laurel litigation early in the proceedings. Instead, the trial court should have first determined whether the municipality complied with its affordable housing obligations. If the municipality did not, the trial court could then decide whether the plaintiff-developer engaged in sufficient pre-suit negotiations while assessing the merits of a builder’s remedy during the remedial phase.

In Oceanport, the Appellate Division does not reference the numerous unpublished trial court decisions, which determined that pre-suit negotiations are no longer required due to the adoption of the Fair Housing Act, N.J.S.A. 52:27D-301, et seq., in 1985. Those decisions generally reasoned that the FHA creates an administrative procedure for municipalities to voluntarily address their affordable housing obligations and obtain substantive certification, which provides protection from Mount Laurel litigation. Therefore, those municipalities that want to address their affordable housing obligations have a means to do so and avoid Mount Laurel litigation.

In the Oceanport decision, the Appellate Division does not offer any insights as to what a plaintiff-developer must do to satisfy the pre-suit negotiation requirement.