In New Jersey, the state claims ownership of all lands that are currently flowed by the tide, or were formerly flowed by the tide. This concept, known as the "Public Trust Doctrine," can be a nightmare for developers of coastal or riverfront property.
The "Formerly Flowed" Trap
This is where most developers get caught. If a site was filled in 100 years ago to build a factory, the state still claims ownership of that filled land unless a "Riparian Grant" was previously issued. This cloud on title can stop a project dead in its tracks.
Riparian Grants vs. Licenses
If the state asserts a claim, you have two options:
- Riparian Grant: You buy the land from the state fee simple. This is a one-time payment, but it can be expensive (often based on the fair market value of the land as if it were unimproved).
- Riparian License: A renewable lease for structures like docks or piers. This is common for marinas but less desirable for permanent buildings.
The Tidelands Resource Council (TRC)
All grants and licenses must be approved by the TRC. This is a slow, bureaucratic process. You must submit a formal application, get an appraisal, and negotiate the price. It is not uncommon for this process to take 12-18 months.
Title Insurance Exceptions
Most title policies in NJ have a standard exception for riparian rights. You need to order a specific "Tidelands Search" to see if the state claims any part of your property. If they do, you cannot close financing until it is resolved.
Conclusion
Never assume you own the waterfront. A Tidelands search should be one of the first due diligence items on any property near a body of water.