Francis Conversion, L.P. v. Town of West New York

A-521-96T2 (N.J. Super. App. Div. 1998) (Unpublished)
  • Opinion Date: August 7, 1998

LANDLORD-TENANT; RENT CONTROL—A rent control board must expressly relate its mandated rent reduction to a quantifiable measure of what it finds to be the reduction in services provided by a landlord, but a landlord is still entitled to collect the reasonable rental value of the leased unit.

In this landlord-tenant dispute, the tenants filed an application with the municipality’s rent control board alleging various violations and other complaints about the condition of their apartment building and requesting a reduction in rent. After a hearing, the board granted the tenants a 50% reduction in rent pending abatement of the violations. The landlord filed a complaint in lieu of prerogative writ, alleging that it had not received proper notice of the meeting of the board and that the board’s decision was arbitrary and capricious. The matter was brought before the Court by a motion for summary judgment.

The Court found the board’s resolution deficient because it “makes no findings of fact but simply decrees a 50 percent reduction in rentů nor does it explain how those factual findings were related to the fifty percent reduction that it ordered.” As a result, the Court remanded the matter for a de novo hearing to be completed within sixty days and retained jurisdiction. In response, the board conducted hearings in a desultory manner with many adjournments for lack of a quorum. At the conclusion of its final hearing, the board reaffirmed its earlier decision ordering a 50% reduction in rent. Once again, the board failed to provide any findings of fact related to its decision. At this point, the landlord returned the matter to the lower court. Six months after announcing its decision, the board adopted a resolution with findings of housing code violations and deficiencies in the building, but its resolution did not address why the rent was to be reduced by 50% rather than some lesser percentage. The lower court upheld the decision of the board, but the Appellate Division reversed.

The Appellate Division noted that no appellate decisions hold that a municipality may delegate authority to a rent control board to grant a rent reduction based on housing code violations or other deficiencies in rental housing. The Court also found that the 50% reduction in rent was not based on the record. It then remanded to the board for a redetermination of the amount of rent reduction. The board was directed to make this determination based on the principles set forth in case law. In making its determination, the board was directed to make a specific determination as to whether service had quantifiably decreased and then to make a finding of a specific reduction of rent directly related to the reduction of service. The board was also directed to bear in mind that, even where there is a violation, the landlord was still entitled to collect the reasonable rental value of the unit or units.