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Friday, January 2, 2009

Paradise Park Homeowners Association, Inc. et al. v. Riverdale Management Associates, et al.


The Mobile Home Protection Act, N.J.S.A. 46:8C-2 to -21, grants mobile home park residents a right of first refusal triggered by the sale of the property. N.J.S.A. 46:8C-11 and N.J.S.A. 46:8C-12. Plaintiffs are an association of mobile home owners formed under the Act. Defendants are the former and present owners of this mobile home park. Under N.J.S.A. 46:8C-13(a), any sale "not made in contemplation" of changing the property's use as a private mobile home community is exempt from the right of first refusal. Defendants invoked this exemption when the park was sold. Plaintiffs sued to enforce their right of first refusal. On cross-motions for summary judgment, the trial court dismissed the complaint finding the sale exempt under N.J.S.A. 46:8C- 13(a).

We now reverse and hold that the term "in contemplation" in N.J.S.A. 46:8C-13(a) denotes a state of mind involving less commitment to action than an "intent." A seller invoking such an exemption must have a rational, good faith basis to believe, under all of the attendant circumstances, that the sale was not made "in contemplation" of changing the use of the property. Here, plaintiffs presented sufficient evidence to survive summary judgment.