## Facts

- The United States owned a dwelling and approximately two acres within the Delaware Water Gap National Recreation Area.
- Paul Angerman and his wife entered a written agreement with the U.S. Department of the Interior/National Park Service covering September 15, 1971 to September 1, 1976.
- The agreement authorized Angerman to use the dwelling and land as a residence; the dwelling was in poor condition.
- In lieu of cash rent, Angerman agreed to restore and maintain the premises and perform services for park personnel (including fire detection and monitoring nearby federal property).
- The government retained inspection rights and discretion to terminate the agreement.
- The Angermans continuously occupied the premises as their private residence.
- The Township sought to tax Angerman’s interest as a private leasehold in otherwise tax-exempt federal property under the Leasehold Taxing Act, N.J.S.A. 54:4-2.3.
- Angerman argued the agreement created only a license, not a taxable leasehold.

## Issues

1. Whether the agreement created a leasehold interest (landlord–tenant relationship) or merely a license.
2. If a leasehold existed, whether Angerman’s private residential use made the interest taxable under N.J.S.A. 54:4-2.3.

## Decision

- The Appellate Division reversed the trial court.
- The court held the agreement created a lease, not a license, because it granted Angerman exclusive possession for a multi-year term.
- The court held the lease was for private purposes and therefore the leasehold interest was taxable under N.J.S.A. 54:4-2.3.

## Legal Principles

- Classification as a lease or license turns on the legal effect of the agreement’s provisions, not the label used by the parties.
- A lease is characterized by a grant of exclusive possession for lawful use, subject only to owner reservations not inconsistent with the tenant’s possessory rights.
- A license is a personal privilege to use land for a limited purpose, lacking the possessory security associated with tenancy.
- Owner rights of inspection and termination may be collateral provisions that do not negate a lease where exclusive possession is otherwise granted.
- Consideration in services or improvements, rather than cash rent, can support a leasehold relationship.
- Under N.J.S.A. 54:4-2.3, a private leasehold interest in otherwise tax-exempt property is taxable when held for private purposes.

## Conclusion

Because the agreement granted Angerman exclusive residential possession for a defined term in exchange for non-cash consideration, it created a private, taxable leasehold interest under New Jersey’s Leasehold Taxing Act rather than a non-taxable license.


Twp. of Sandyston v. Angerman, 134 N.J. Super. 448, 341 A.2d 682 (N.J. Super. Ct. App. Div. 1975)