Ah, the joys of summer, which include trips to the Jersey shore, relaxing on the sandy beach while the tide comes in, goes out and comes in again. Many people consider proximity to the ocean to be one of the best things about living in New Jersey. However, this very proximity gives rise to a legal regime under which oblivious owners of real estate can be deprived of all or a substantial part of the value of their property. If your property is located in Hunterdon, Morris, Sussex or Warren Counties, you don’t have to worry.
Everyone else, read on.
NEW JERSEY TIDELANDS CLAIMS – BACKGROUND
In English common law, all land “flowed by the tides” belong to the Crown. Traditionally, such lands have been available for public use by fishing, clamming, harvesting salt and seaweed and similar endeavors, as well as for navigation. When the original thirteen colonies became independent, the new state governments inherited the Crown’s rights, each state according to its own legislation. In New Jersey, the state owns all lands “now or formerly flowed by the tides,” up to the current or previous mean high water line. The “now” part doesn’t seem so bad – after all, a person can see the tide going in and out on the beach, and most people are familiar with the dry sand/wet sand distinction. However, tidelands also include those under or adjacent to rivers and streams whose flow is affectedby the tides. The Delaware River, for example, is considered tidal up to Trenton.
The real trap for the unwary is the “formerly” part of “now or formerly flowed”. A particular parcel of land may give no apparent indication today that it was formerly flowed by the tides – it may have been filled in generations ago, or the flow of water may have been redirected to, for example, a man-made canal or lagoon. (To add to the confusion, the state does not claim man-made waters.) Nonetheless, based on old maps or land records, or even the presence of remnants of tidal plants, the State of New Jersey may claim ownership of all or part of that previously-flowed parcel. The state asserts its claim by filing a map on which its claim is delineated – it has no obligation to provide notice to the property owner. Thanks in part to the development of technology which facilitates the creation of cohesive digital maps from old maps, old property descriptions, aerial photography and modern surveying techniques, the state of New Jersey has become much more aggressive in recent years in asserting its tidelands claims.
WHAT SHOULD PROPERTY OWNERS DO?
Typically, a property owner becomes aware of a tidelands claim when he enters into a contract of sale for the property and the buyer has a tidelands search done by his title company. Horror stories abound – the elderly retirees selling their seaside cottage to finance their move to an assisted living facility, only to find out that the state of New Jersey is entitled to all or a substantial portion of the proceeds – the heirs in California who inherit a New Jersey property encumbered by a mortgage and a tidelands claim which together greatly exceed the value of the property.
If a buyer’s search reveals a tidelands claim, he will want to cancel the contract or demand that the seller purchase a riparian grant from the Tidelands Resource Council. This amounts to a sale of the claimed land to the person who thought he already owned it. The state’s claim is generally valued at the fair market value of the parcel or portion claimed at the time of the grant. Except in the four counties where there are no tidelands, a search for tidelands claims has recently become the norm for title companies, along with the traditional lien and upper court searches. To protect against unpleasant surprises, many lawyers advise their seller clients to have their own tidelands search done before putting the property on the market. That way, the seller can disclose any claim to a potential buyer and avoid cancellation of the contract on those grounds, as well as planning the application for a riparian grant. Two or three years may elapse between filing the application and receiving a decision on it.
In the case of houses built on pilings over tide flowed land, known as “homes over water,” no grants will be issued. Instead, a homeowner may apply for a tidelands lease, which permits him to rent the tidelands beneath his house on a long-term basis. The lease term is usually twenty years and, of course, rent has to be paid to the state.
If land has been dry for 40 years and has never been claimed by the state, there is a rebuttable presumption that it is “safe.” In such a case, a property owner can apply to the Tidelands Resource Council for a Statement of no Interest, a recordable document stating that the state does not claim the property in question. The fee is about $1000 and the process takes less than a year.
WHAT SHOULD PROPERTY BUYERS DO?
Buyers should be alert to the possibility of tidelands claims on any property outside the four counties, even if it does not appear to be near the ocean. A buyer should insist that the contract of sale include a provision that if the property or any portion of it is claimed, the buyer can cancel the contract. Once the contract has been finalized, the buyer should immediately proceed to title searches, including a tidelands claim search. If the property has been claimed, the buyer can cancel and move on, or negotiate with the seller to account for the value of the claim. It is important to remember that the state is not required to issue a grant or a lease, even to the person occupying the property – the issuance must be found to be in the public interest. The public interest component of the decision is facilitated by the fact that funds obtained from the sale and lease of tidelands are earmarked for the public schools.
This is a general introduction to a complex, little-known and rapidly evolving area of law which will affect many property owners who are unaware of it. Stay tuned.
DISCLAIMER – This article is for general information only and is not intended to provide legal advice or to address specific legal problems. This article does not create an attorney-client relationship. For legal advice concerning real estate transactions and all other legal matters, consult an attorney.
The Ebb and Flow of the Tides – It’s Not Just at the Shore
Ah, the joys of summer, which include trips to the Jersey shore, relaxing on the sandy beach while the tide comes in, goes out and comes in again. Many people consider proximity to the ocean to be one of the best things about living in New Jersey. However, this very proximity gives rise to a legal regime under which oblivious owners of real estate can be deprived of all or a substantial part of the value of their property. If your property is located in Hunterdon, Morris, Sussex or Warren Counties, you don’t have to worry.
Everyone else, read on.
NEW JERSEY TIDELANDS CLAIMS – BACKGROUND
In English common law, all land “flowed by the tides” belong to the Crown. Traditionally, such lands have been available for public use by fishing, clamming, harvesting salt and seaweed and similar endeavors, as well as for navigation. When the original thirteen colonies became independent, the new state governments inherited the Crown’s rights, each state according to its own legislation. In New Jersey, the state owns all lands “now or formerly flowed by the tides,” up to the current or previous mean high water line. The “now” part doesn’t seem so bad – after all, a person can see the tide going in and out on the beach, and most people are familiar with the dry sand/wet sand distinction. However, tidelands also include those under or adjacent to rivers and streams whose flow is affectedby the tides. The Delaware River, for example, is considered tidal up to Trenton.
The real trap for the unwary is the “formerly” part of “now or formerly flowed”. A particular parcel of land may give no apparent indication today that it was formerly flowed by the tides – it may have been filled in generations ago, or the flow of water may have been redirected to, for example, a man-made canal or lagoon. (To add to the confusion, the state does not claim man-made waters.) Nonetheless, based on old maps or land records, or even the presence of remnants of tidal plants, the State of New Jersey may claim ownership of all or part of that previously-flowed parcel. The state asserts its claim by filing a map on which its claim is delineated – it has no obligation to provide notice to the property owner. Thanks in part to the development of technology which facilitates the creation of cohesive digital maps from old maps, old property descriptions, aerial photography and modern surveying techniques, the state of New Jersey has become much more aggressive in recent years in asserting its tidelands claims.
WHAT SHOULD PROPERTY OWNERS DO?
Typically, a property owner becomes aware of a tidelands claim when he enters into a contract of sale for the property and the buyer has a tidelands search done by his title company. Horror stories abound – the elderly retirees selling their seaside cottage to finance their move to an assisted living facility, only to find out that the state of New Jersey is entitled to all or a substantial portion of the proceeds – the heirs in California who inherit a New Jersey property encumbered by a mortgage and a tidelands claim which together greatly exceed the value of the property.
If a buyer’s search reveals a tidelands claim, he will want to cancel the contract or demand that the seller purchase a riparian grant from the Tidelands Resource Council. This amounts to a sale of the claimed land to the person who thought he already owned it. The state’s claim is generally valued at the fair market value of the parcel or portion claimed at the time of the grant. Except in the four counties where there are no tidelands, a search for tidelands claims has recently become the norm for title companies, along with the traditional lien and upper court searches. To protect against unpleasant surprises, many lawyers advise their seller clients to have their own tidelands search done before putting the property on the market. That way, the seller can disclose any claim to a potential buyer and avoid cancellation of the contract on those grounds, as well as planning the application for a riparian grant. Two or three years may elapse between filing the application and receiving a decision on it.
In the case of houses built on pilings over tide flowed land, known as “homes over water,” no grants will be issued. Instead, a homeowner may apply for a tidelands lease, which permits him to rent the tidelands beneath his house on a long-term basis. The lease term is usually twenty years and, of course, rent has to be paid to the state.
If land has been dry for 40 years and has never been claimed by the state, there is a rebuttable presumption that it is “safe.” In such a case, a property owner can apply to the Tidelands Resource Council for a Statement of no Interest, a recordable document stating that the state does not claim the property in question. The fee is about $1000 and the process takes less than a year.
WHAT SHOULD PROPERTY BUYERS DO?
Buyers should be alert to the possibility of tidelands claims on any property outside the four counties, even if it does not appear to be near the ocean. A buyer should insist that the contract of sale include a provision that if the property or any portion of it is claimed, the buyer can cancel the contract. Once the contract has been finalized, the buyer should immediately proceed to title searches, including a tidelands claim search. If the property has been claimed, the buyer can cancel and move on, or negotiate with the seller to account for the value of the claim. It is important to remember that the state is not required to issue a grant or a lease, even to the person occupying the property – the issuance must be found to be in the public interest. The public interest component of the decision is facilitated by the fact that funds obtained from the sale and lease of tidelands are earmarked for the public schools.
This is a general introduction to a complex, little-known and rapidly evolving area of law which will affect many property owners who are unaware of it. Stay tuned.
DISCLAIMER – This article is for general information only and is not intended to provide legal advice or to address specific legal problems. This article does not create an attorney-client relationship. For legal advice concerning real estate transactions and all other legal matters, consult an attorney.