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Rosen v. Hoboken Rent Leveling and Stabilization Board

A-3188-06T2 and A-3764-06T2 (N.J. Super. App. Div. 2008) (Unpublished)

LANDLORD-TENANT; RENT CONTROL — Where a municipality’s method of rent calculation is intended to stabilize rents and maintain affordability despite market rent levels, its ordinance is to be liberally construed in favor of its intended objectives.

A landlord purchased an apartment building that was subject to a municipal rent control ordinance. According to the ordinance, property owners collecting rent were required to file an annual registration statement by October 1. The statement calls for information about tenants, rental units, and the amount of rent being collected along with any increases. The ordinance also limited rent increases, but allowed the rent for registered properties to be increased by twenty-five percent upon a vacancy. A six-year tenant sought a calculation of her rent under the ordinance. At the time of her request, she was paying $1,600. The rent leveling officer calculated her 2005 rent to be $1,056, which was lower than the $1,400 rent she paid when she first moved in six years earlier. The calculation included a vacancy allowance of twenty-five percent for 1994. The landlord appealed to the rent leveling board, but the board upheld the officer’s determination on the grounds that no registration statements or vacancy certificates had been filed by the landlord.

The landlord challenged the board’s decision in court. While the matter was pending, the rent leveling officer discovered a registration statement from 1982, and in keeping with the ordinance’s requirement that the oldest registration on file be used, recalculated the tenant’s rent, excluding the twenty-five percent 1994 vacancy allowance, and set the 2005 legal rent at $607. As a result of the revised calculation, the matter was remanded back to the board and it then returned to the lower court after the officer’s recalculation of the tenant’s rent was upheld. The lower court affirmed the board’s decision and allowed damages in favor of the tenant under consumer fraud statutes inclusive of punitive damages. The matter was appealed and combined with another pending appeal by actions by two other tenants against the same landlord. The landlord then settled the matter with the original tenant while the remaining appeals continued.

On the landlord’s appeal, the Appellate Division rejected the landlord’s reliance on out-of-state court decisions where vacancy increases were granted despite improper filings. It found that relying on such decisions would contradict the language and intent of the municipality’s rent control ordinance, the objectives of which were found to be advanced by the timely filing of the registration statements and vacancy certificates. The Court also found that the statutory language was clear and unambiguous regarding the deadline for filing registration statements and that vacancy certificates were to be filed whenever a rental unit is vacated. Additionally it pointed out that neither document was properly filed for any of the rental units in question.

The landlord argued that the board’s use of the earliest registration was incorrect and deprived it of the opportunity to charge fair market rent for its apartments. This argument was rejected. The Court pointed out that the municipality’s method of rent calculation was intended to stabilize rents and maintain affordability despite market levels and that, according to the ordinance’s text, it was to be liberally construed in favor of its intended objectives. As a result of its findings and conclusions, the Court upheld the board’s calculation of the tenant’s rents.

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