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Ottomano v. Aranov

A-5158-06T3 (N.J. Super. App. Div. 2008) (Unpublished)

CONDOMINIUMS; CONVERSION; RENT CONTROL — Even though the purchaser of a post-condominium conversion apartment may not own enough units so as to be governed by a municipality’s rent control law, renters in those apartments are protected from unreasonable rent increases in rent controlled municipalities to the same extent as would a rent controlled tenant.

A tenant lived in an apartment that was later converted to a condominium unit. The unit was sold and the buyer served the tenant with a three-year notice to quit as required under New Jersey’s anti-eviction statutes for rental units that have been converted. The buyer also served the tenant with notice of an eighty percent rent increase and a demand that the tenant quit the premises at the expiration of the lease term if he did not accept the rent increase. The tenant refused to pay the increase or quit the premises at the end of the lease term. The buyer brought an eviction action for non-payment of rent. The lower court found that the buyer was restrained by law from increasing the rent beyond the maximum set by the municipality’s rent control ordinance and dismissed the buyer’s claims

On appeal, the Appellate Division noted that while the tenant’s unit was not expressly protected by the municipality’s rent control laws because its owner owned less than five units, by statute, renters who are served with a three-year notice to quit a converted premises are protected from unreasonable rent increases to the same extent as would a rent controlled tenant if a rent control ordinance is “in effect.” The Court pointed out that in municipalities with rent-control provisions, all pre-conversion tenants are protected by the rent-control provisions whether their particular unit is subject to them or not. Further, it pointed out that if this buyer were allowed to increase this pre-conversion tenant’s rent by the requested amount, the anti-eviction statutes barring eviction for three years would be rendered meaningless and the legislature’s intent to protect pre-conversion tenants would be defeated. The Court based its decision on the statutory and precedential protections for pre-conversion tenants and not on whether the buyer would have been exempted from rent-control provisions. Thus, the lower court’s decisions to dismiss the buyer’s claims and to bar her proposed rent increase were affirmed.

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