Recent New Jersey court decisions have indicated a trend that the New Jersey courts will take a narrow view of the limited powers of the local land use authorities as set forth in the Municipal Land Use Law (“MLUL”) and reaffirm the basic standard of fairness under which developers cannot be responsible for paying more than their fair share of off-site improvements. It is important for New Jersey developers and builders to find out if the New Jersey Supreme Court will continue this trend when it renders its decision in the consolidated appeals of New Jersey Shore Builders Association v. Township of Jackson and Builders League of South Jersey v. Egg Harbor Township , 401 N.J. Super. 152 (App. Div. 2008), which revisits the issue of whether municipalities can require developers to set aside land for open space or recreational facilities, or to make payments in lieu of those set-asides, as a condition of development approval. The New Jersey Supreme Court granted certification on November 14, 2008, and the consolidated appeals were argued before the New Jersey Supreme Court on March 9.

In New Jersey Shore Builders Association and Builders League of South Jersey , the Appellate Division invalidated a longstanding municipal practice of requiring developers to set aside land for open space as a condition of development approval or to make payments in lieu of those set-asides as conditions of approval. In unanimously striking down ordinances in two municipalities that required such exactions, the Appellate Division held that the MLUL (i) only permits municipalities to condition development approvals on contribution to open space and recreational facilities in the specific context of planned developments, but not general subdivision or site plan review, and (ii) limits off-site contributions to water, sewer, drainage and street improvements.

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