On February 14, 2017, the Appellate Division in Dunbar Homes v. Zoning Board of Adjustment of the Township of Franklin (), reversed the trial court's holding that a landowner was entitled to the benefit of the time of application rule.

In a question of first impression, the Dunbar court was tasked with deciding what must be submitted to a municipal land use board to be considered an application for development that triggers the time of application rule. The court held that the time of application rule is triggered when a developer's submission includes the application form and all accompanying documents specifically required by the applicable ordinance governing applications for development (N.J.S.A. 40:55D–10.5 and 40:55D–3). An official finding by the land use board that the application is deemed complete for review is not a requirement (N.J.S.A. 40:55D-10.3).

This decision also clarifies that municipal land use boards must determine whether a developer's submission package includes all items required by the applicable ordinance, and that the courts will only interfere with that determination if it is arbitrary, capricious, and unreasonable.

Dunbar Homes was seeking a conditional use variance (also known as a d(3) variance) to construct garden apartments on its property. One day after its submission to the Planning Board seeking site plan approval and the conditional use variance, the Township adopted an amendment to the zoning ordinance eliminating garden apartments as permitted conditional uses in that zone.

After the amendment to the ordinance became effective, the Township's zoning officer identified items needed for completeness of Dunbar's application. The zoning officer advised further that, under the newly adopted ordinance, Dunbar was now required to seek a use variance (also known as a d(1) variance) and not a conditional use variance.

Dunbar submitted the additional materials and argued that garden apartments should still be permitted as a conditional use because it submitted its application before the effective date of the amendment to the ordinance. The Board determined the application was not complete until after the adoption of the ordinance and Dunbar was required to obtain a use variance to comply with the amended ordinance.

In the past, New Jersey courts applied a time of decision rule in which a municipal land use board's decision was based on the local ordinance in effect at the time the application or appeal was being decided. Under the time of decision rule, a municipality could legally change its zoning ordinance during the pendency of a land use application even if the ordinance is amended in direct response to a particular application.

To protect developers from the inequity that occurred when applications were denied due to subsequent changes to an ordinance, New Jersey enacted the time of application rule within the MLUL. The time of application rule provides that regulations in effect on the date of submission of an application for development govern the review of that application (N.J.S.A. 40:55D–10.5). The triggering event for the time of application rule is the date of submitting an "application for development", defined as the application form and all accompanying documents required by ordinance for approval (N.J.S.A. 40:55D–3).

At the trial court, the Township argued the time of application rule does not apply until the application for development is deemed complete under the applicable ordinance (N.J.S.A. 40:55D–10.3). Dunbar argued that the submission of a substantial, bona-fide application which does not constitute a sham, and one that gives the Township sufficient notice of the application and an understanding of the development being proposed by the applicant, is sufficient for the protection of the time of application rule.

The trial judge found that the time of application rule applies if the applicant provides enough information to the land use board so that a meaningful review of the application can begin. The trial judge also found that an application for development does not need to be deemed complete for the time of application rule to apply and reversed the Board's decision. The Township appealed.

The Appellate Division reversed the holding of the trial court and held that:

The Dunbar court concluded that Dunbar's initial submission package did not include all the documents and fees specifically required by the applicable ordinance at the time it was filed. The documents necessary to satisfy the MLUL definition of application for development were not submitted until after the amendment to the ordinance became effective. The court further found that the Board’s conclusion that Dunbar was not entitled to the benefit of the time of application rule was not arbitrary, capricious, or unreasonable and the trial court erred in reversing that determination.

This decision may make it more difficult for developers to gain the benefit of the time of application rule. Developers may find this case problematic in some situations, such as:

Counsel for developers must carefully review all relevant ordinances and checklists before submitting an application for development to ensure their initial application includes everything required by the applicable ordinance.