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Home Properties of New York, L.P. v. Township of Piscataway Rent Leveling Board

A-2540-01T5 (N.J. Super. App. Div. 2003) (Unpublished)

RENT CONTROL; ORDINANCES—Where a rent control ordinance allowing landlords to recoup tax increases states its purpose in broad, general terms, its effectiveness goes beyond an included schedule of “base years” that stops after the first ten years.

A municipality adopted an ordinance allowing a landlord, under rent control, to “seek a tax surcharge from a tenant because of an increase in municipality property taxes.” The ordinance presented a formula for the surcharge and then listed the equivalent base years for ten consecutive tax years. The ordinance was never repealed, but the municipality’s rent leveling board and township council each concluded that because the table showing the base years for corresponding tax years ended with 1995, the ordinance, itself, was no longer operative after the last listed year. The landlord successfully appealed that interpretation to the Appellate Division. It pointed out that the table of base years was “subordinate to the legislative determination set forth in the [very] first sentence of the ordinance,” reading “A landlord may seek a tax surcharge from a tenant because of an increase in municipal property taxes.” According to the Court, although the formula for determining the “base” year only extended through the 1995 tax year, it was clear that “the intent of the governing body” could be determined with respect to subsequent years based upon the pattern of the ten specific years listed in the ordinance. Further, the Court believed that if the governing body had intended the authorization for passing-through tax increases to expire after ten years, “it easily could have included such a provision in the ordinance” or it could have repealed the ordinance. As a result, the Court opined that “[i]n the absence of an express repeal of [the] ordinance ..., the Township Council’s decision in this case would create a serious danger of discriminatory application of the tax surcharge provision of the Township’s rent control ordinance.” Consequently, the pass-throughs were allowed notwithstanding the strenuous objections originally filed with the rent leveling board by an association of tenants.


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