A builder's remedy is a court-imposed judgment in favor of a litigant in which the court requires a municipality to rezone the developer's property to allow for high-density development provided that a substantial portion of the units to be constructed is reserved for, or set aside for low- and moderate-income households. The additional market units that are allowed through the higher-density development are intended to create an additional profit for the developer who will use some of those profits to subsidize the low- and moderate-income units that the developer must now construct as part of its development and either sell or rent the units at below market amounts. A developer is entitled to a builder's remedy if:
- It succeeds in proving that the municipality has not satisfied its constitutional affordable housing obligation (Mount Laurel obligation).
- It proposes a project with a substantial amount of affordable housing and
- Tthe site is suitable, i.e., the municipality fails to meet its burden of proving that the site is environmentally constrained or that construction of the project would represent bad planning.
Toll Bros. v. Township Of West Windsor, 334 NJ Super. 109 (App.Div.2000) established the principle that a successful developer in a builder's remedy suit is entitled to a court-ordered zoning designation, including all aspects of zoning such as density, setbacks, building heights, lot coverage, green area, etc. Municipalities in builder's remedy lawsuits may be held liable for developers' attorney's fees and costs of suit, the fees of a special master appointed by the court to assist in developing the zoning scheme on the affected property, the costs of any infrastructure improvements, such as sewer and water system upgrades and road improvements. When a builder's remedy is granted against a municipality, the town, and its planning and zoning boards lose all control over the zoning of the subject property, which is left to the special master, who only reports to the court or just to the courts.