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Sudersan v. Royal

2005 WL 3500289 (N.J. Super. App. Div. 2005) (Unpublished)

LEASES; EVICTION; SECTION 8 - - If items of additional rent, when added to the basic rent payable by a Section 8 tenant, would bring the amount payable by that tenant above the percentage limit set forth by law, non-payment of that additional rent cannot be used as grounds to evict the tenant.

A tenant who received a federal housing subsidy moved into a rental property pursuant to a one-year lease agreement. “The lease was subsequently amended to include utility charges as ‘rent.’” The Section 8 subsidy enjoyed by the tenant was personal to her. If she moved from the unit, the subsidy would remain with her and not the property. In addition, her income was low enough to qualify for a full rent subsidy. Consequently, “even if actual rent were outstanding, [the tenant] would not be responsible for non-payment on the part of the Section 8 program. ... On the other hand, [the tenant] was responsible for utility charges that by virtue of the lease addendum were considered additional rent.” When she defaulted on paying water and sewer charges, the landlord filed a summary dispossess action. On the date of the hearing, the tenant “argued that notwithstanding the lease agreement, the utility charges, which she did not dispute, were not ‘rent’ in a Section 8 tenancy, and, therefore, under federal law she could not be evicted for non-payment of rent because her portion of the rent owed was fixed at zero.” The lower court disagreed and awarded judgment of possession in favor of the landlord. The tenant was locked out and subsequently relocated. On appeal, the Court made a special point to note why it was hearing the matter despite the rule that “where a tenant no longer resides in the property, an appeal challenging the propriety of an eviction is moot.” Here, the tenant was exposed to revocation of her federal subsidy if she had “been evicted from federally assisted housing in the last five years,” and she had already received a notice of the proposed termination. Consequently, “[i]n light of the risk to her Section 8 subsidy and the public importance of the issue generally, [the Appellate Division] decline[d] to dismiss the appeal as moot.”

Under New Jersey’s Anti-Eviction Act, a tenant may only be removed from leased property for specifically listed grounds. One of them is the failure to pay rent. Under that provision, “rent must be ‘due, unpaid and owing’ in order to be collectible in a non-payment case.” Under New Jersey law, a landlord and tenant in a residential lease may “define rent as they choose.” On the other hand, “the force of this type of provision may be limited by ... federal law [because of] [t]he Supremacy Clause of the United States Constitution.” Also, under prior case law, courts have “held that a ‘state law authoriz[ing] [a public housing authority] to designate certain charges such as attorneys’ fees and late charges, as ‘additional rent’ in a summary dispossess proceeding conflicted with and was preempted by [the Brooke Amendment] which limits the amount of rent that public housing tenants can be charged.” The reasoning is that to allow such charges “to be considered rent would increase that rent beyond the percentage of income limit established by the Brooke Amendment.” The Court saw no difference in the application of the preemption principles to a private landlord or to the particular program at issue in this case. Consequently, federal law prohibited the landlord from demanding rent in excess of the amount set under the program. Here, the landlord sought recovery of utility charges, which in effect would have increased [the tenant’s] portion of the rent from the zero sum fixed by the Section 8 subsidy program” to the amount sought to be collected. Because this was prohibited under federal law, the water and sewer charges could not be considered or treated as rent and therefore could not serve as the basis for a summary dispossess action for non-payment of rent. The Appellate Division vacated the judgment for possession and dismissed the summary dispossess action. It did not grant the tenant any further relief because she had already moved and the apartment was occupied by a new tenant.

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