## Facts

- Leo and Myra Tobin agreed to purchase a newly built home from Paparone Construction Co. in an upscale residential development.
- Paparone had previously sold the adjoining lot to the Shefters and, to facilitate their planned tennis court, encouraged a house placement leaving space for a court near the common boundary.
- The Shefters later sought and obtained a zoning variance allowing a tennis court and a 10-foot chain-link fence to be placed within about one foot of the Tobins’ property line.
- Neither the variance application nor the hearing was disclosed to the Tobins before they closed and moved in.
- After the Tobins purchased and occupied their home, the Shefters constructed the tennis court (about 106' by 50') and fence.
- Restrictive covenants in the development limited fences and certain structures, but Paparone did not disclose them to either the Tobins or the Shefters at purchase.
- The Tobins sued seeking damages and to invalidate the variance; they abandoned rescission and other equitable relief during the case.

## Issues

1. Whether a developer-seller breaches duties of fair dealing and disclosure by failing to reveal material information about an adjacent planned improvement the developer helped facilitate and used as a selling feature for the neighboring lot.
2. Whether the adjoining owners who obtained a variance and built the improvement could be held liable to the neighboring purchasers for the resulting harm.
3. Whether a zoning board’s grant of a variance is invalid because the approved use may conflict with private restrictive covenants, and whether the zoning board must consider or enforce those covenants.

## Decision

- The court entered judgment for the Tobins against Paparone for nondisclosure of material facts, awarding $5,000 in damages.
- The court dismissed all claims against the Shefters.
- The court sustained the zoning board’s variance and denied the request to set it aside.

## Legal Principles

- A developer-seller with superior knowledge may have a duty to disclose material facts affecting a purchaser’s use and value of property, including significant adjacent conditions the developer helped plan or encourage.
- Nondisclosure can constitute misrepresentation by omission and a constructive breach of the sales relationship when the silence creates a misleading impression on which the purchaser reasonably relies.
- Damages for such nondisclosure may be measured by diminution in value (“economic obsolescence”) and related, reliance-based expenditures.
- An adjoining owner who lawfully obtains a variance and acts without wrongdoing is not necessarily liable to a neighbor for the developer’s nondisclosure.
- Zoning boards administer public land-use law and are not responsible for enforcing private restrictive covenants; a valid variance is not void merely because it may conflict with private deed restrictions.

## Conclusion

The court held the developer liable in damages for failing to disclose the planned adjacent tennis court and relevant restrictions, while upholding the zoning variance and rejecting liability against the adjoining owners who built the court pursuant to that variance.


Tobin v. Paparone Constr. Co., 349 A.2d 574 (N.J. Super. Ct. Law Div. 1975)