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Melrose Hall Equity Partners, LP v. Saoud

A-4308-09T3 (N.J. Super. App. Div. 2010) (Unpublished)

LANDLORD-TENANT; RENT — A rent increase of even 317% need not be unconscionable where a rent control board had previously approved the rent, the landlord presented evidence that its monthly costs approximate the new rent, and there was expert testimony establishing that the rent is comparable to other rents in the area.

A landlord served its residential tenant with a notice to quit and a notice of new rent. The tenant did not vacate or pay the new rent. Therefore, the landlord sued to evict the tenant on the non-payment. The rent increase in question was 317%. The local rent control board had approved the amount of the new rent. The tenant sued the rent control board, but a court affirmed the board’s decision and the landlord-tenant dispute continued in landlord-tenant court. In the eviction proceeding, the landlord “presented evidence that its monthly costs for the apartment [were] about $950 and [presented] expert testimony establishing a fair market rent value based on rent for comparable apartments in the area well in excess of the rent approved by the Board.” The lower court recognized the landlord’s obligation to prove that the rent increase [was] ‘not unconscionable and complie[d] with any and all other laws or municipal ordinances governing rent increases.’” The lower court also looked at the factors that “a court should consider to determine whether an increase is unconscionable.” After doing so, the lower court did not reject the rent increase as unconscionable and, on further appeal by the tenant, the Appellate Division agreed.

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