Bill Text: NJ A3592 | 2024-2025 | Regular Session | Introduced
Bill Title: Requires landlord to provide written explanation for rent increase.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced) 2024-02-08 - Introduced, Referred to Assembly Housing Committee [A3592 Detail]
Download: New_Jersey-2024-A3592-Introduced.html
Sponsored by:
Assemblyman CODY D. MILLER
District 4 (Atlantic, Camden and Gloucester)
SYNOPSIS
Requires landlord to provide written explanation for rent increase.
CURRENT VERSION OF TEXT
As introduced.
An Act requiring written explanation for rent increases, supplementing chapter 27D of Title 52 of the Revised Statutes, and amending P.L.1974, c.49..
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. (New section) The Legislature finds and declares that:
a. The cost of housing in New Jersey, including rental housing, constitutes one of the most substantial financial challenges faced by New Jersey residents;
b. Due to the housing shortage in this State, in addition to the disparity in bargaining power between residential tenants and their landlords, a significant number of New Jersey residents struggle to afford and dispute rent increases by their landlords;
c. New Jersey law requires a landlord to provide a written notice to the tenant whenever the landlord intends to increase rent, and a written notice to quit, or terminate, the tenancy at the end of the lease term;
d. State law has not set forth a precise limit on rent increases, but has instead required that a rent increase not be "unconscionable," which may be asserted as a defense to an eviction by a residential tenant pursuant to subsection f. of section 2 of P.L.1974, c.49 (C.2A:18-61.1);
e. The term "unconscionable" has been defined on a case-by-case basis by the courts using the multi-factor test set forth in case law, which requires, among the other factors, a court to look at a landlord's expenses and profitability, and determine whether the rent increase would "shock the conscience" of a reasonable person;
f. Due to the summary nature of landlord-tenant proceedings, limited discovery, case-by-case determinations of unconscionability, disparity of bargaining power, and limited precedent setting forth a bright line standard for unconscionable rent increases, residential tenants are limited in their ability to collect sufficient information in advance of the landlord's increase or, if necessary, eviction proceedings, to dispute a rent increase; and
g. Therefore, the Legislature finds and declares that to protect the health, housing stability, financial security, and well-being of residential tenants, it is in the public interest to require a landlord, when raising rent, to provide a tenant written explanation for the rent increase, and certain, critical information.
2. (New section) A landlord who violates paragraphs (1) or (2) of subsection f. of section 2 of P.L.1974, c.49 (C.2A:18-61.1) shall:
(1) be liable to a penalty of $500, which shall be collected and enforced by summary proceedings pursuant to the "Penalty Enforcement Law of 1999," P.L.1999, c.274 (C.2A:58-10 et seq.). The Superior Court, Law Division, Special Civil Part in the county in which the residential rental property is located shall have jurisdiction over the proceedings. Process shall be in the nature of a summons or warrant, and shall issue upon the complaint of the Commissioner of Community Affairs or the Attorney General; and
(2) at the discretion of the tenant, be subject to a separate cause of action by the tenant in the Superior Court, Law Division, Special Civil Part in the county in which the rental premises are located. The tenant may recover $500 for each offense by the landlord, in addition to reasonable attorney's fees or expenses.
3. Section 2 of P.L.1974, c.49 (C.2A:18-61.1) is amended to read as follows:
2. No lessee or tenant or the assigns, under-tenants or legal representatives of such lessee or tenant may be removed by the Superior Court from any house, building, mobile home or land in a mobile home park or tenement leased for residential purposes, other than (1) owner-occupied premises with not more than two rental units or a hotel, motel or other guest house or part thereof rented to a transient guest or seasonal tenant; (2) a dwelling unit which is held in trust on behalf of a member of the immediate family of the person or persons establishing the trust, provided that the member of the immediate family on whose behalf the trust is established permanently occupies the unit; and (3) a dwelling unit which is permanently occupied by a member of the immediate family of the owner of that unit, provided, however, that exception (2) or (3) shall apply only in cases in which the member of the immediate family has a developmental disability, except upon establishment of one of the following grounds as good cause:
a. The person fails to pay rent due and owing under the lease whether the same be oral or written; provided that, for the purposes of this section, any portion of rent unpaid by a tenant to a landlord but utilized by the tenant to continue utility service to the rental premises after receiving notice from an electric, gas, water or sewer public utility that such service was in danger of discontinuance based on nonpayment by the landlord, shall not be deemed to be unpaid rent.
b. The person has continued to be, after written notice to cease, so disorderly as to destroy the peace and quiet of the occupants or other tenants living in said house or neighborhood.
c. The person has willfully or by reason of gross negligence caused or allowed destruction, damage or injury to the premises.
d. The person has continued, after written notice to cease, to substantially violate or breach any of the landlord's rules and regulations governing said premises, provided such rules and regulations are reasonable and have been accepted in writing by the tenant or made a part of the lease at the beginning of the lease term.
e. (1) The person has continued, after written notice to cease, to substantially violate or breach any of the covenants or agreements contained in the lease for the premises where a right of reentry is reserved to the landlord in the lease for a violation of such covenant or agreement, provided that such covenant or agreement is reasonable and was contained in the lease at the beginning of the lease term.
(2) In public housing under the control of a public housing authority or redevelopment agency, the person has substantially violated or breached any of the covenants or agreements contained in the lease for the premises pertaining to illegal uses of controlled dangerous substances, or other illegal activities, whether or not a right of reentry is reserved to the landlord in the lease for a violation of such covenant or agreement, provided that such covenant or agreement conforms to federal guidelines regarding such lease provisions and was contained in the lease at the beginning of the lease term.
f. The person has failed to pay rent after a valid written notice to quit and written notice of increase of said rent, provided the increase in rent is not unconscionable and complies with any and all other laws or municipal ordinances governing rent increases, and provided that the landlord complies with paragraphs (1) and (2) of this subsection.
(1) The landlord shall provide in the written notice of increase in rent an explanation of the reasons for the rent increase, which shall:
(a) describe why the rent increase is not unconscionable;
(b) confirm that the rent increase complies with all municipal ordinances, and all other applicable laws, governing rent increases; and
(c) list the expenses, if any, associated with the tenant's unit, and with common areas of the property, as applicable, that have contributed to the need for a rent increase.
(2) If the tenant is a resident of a senior citizen housing project, as defined in section 2 of P.L.1995, c.144 (C.2A:42-113), then the written notice of increase in rent shall include:
(a) the contact information of an individual authorized to speak to the tenant about the proposed rent increase; and
(b) the following statement in a bold typeface in a font size no less than one point larger than the point size of the rest of the written statement or 11 points, whichever is larger:
NEW JERSEY LAW PROVIDES THAT A TENANCY SHALL RENEW ON A MONTH-TO-MONTH BASIS AT THE EXPIRATION OF THE LEASE TERM, UNLESS THE LEASE IS LAWFULLY TERMINATED. A LANDLORD MAY INCREASE THE RENT AT THE EXPIRATION OF A LEASE TERM, PROVIDED THAT THE NEW RENT COMPLIES WITH APPLICABLE FEDERAL, STATE, AND LOCAL LAWS AND IS NOT UNCONSCIONABLE. IF A TENANT BELIEVES THAT THE RENT INCREASE IS NOT PERMITTED OR IS UNCONSCIONABLE, THE TENANT HAS THE RIGHT TO REFUSE TO PAY THAT RENT INCREASE. HOWEVER, UNDER STATE LAW, IF THE TENANT CHOOSES NOT TO PAY THE RENT INCREASE, BUT REMAINS IN THE UNIT, THE LANDLORD IS PERMITTED TO TAKE LEGAL ACTION AGAINST THE TENANT FOR FAILURE TO PAY THE REASONABLY INCREASED RENT. DURING THIS PROCEEDING, THE BURDEN OF PROOF IS ON THE LANDLORD TO DEMONSTRATE TO THE COURT THAT THE RENT INCREASE IS NOT UNCONSCIONABLE AND COMPLIES WITH ANY AND ALL OTHER LAWS OR MUNICIPAL ORDINANCES GOVERNING RENT INCREASES. PRIOR TO CHALLENGING A RENT INCREASE, THE TENANT IS ENCOURAGED TO SPEAK WITH THE CONTACT INDIVIDUAL NAMED IN THIS NOTICE, AND MAY ALSO CHOOSE TO CONSULT WITH AN ATTORNEY.
(3) A landlord who violates paragraphs (1) or (2) of this subsection shall be liable to the penalties and action set forth by section 2 of P.L. , c. (C. ) (pending before the Legislature as this bill).
g. The landlord or owner (1) seeks to permanently board up or demolish the premises because he has been cited by local or State housing inspectors for substantial violations affecting the health and safety of tenants and it is economically unfeasible for the owner to eliminate the violations; (2) seeks to comply with local or State housing inspectors who have cited him for substantial violations affecting the health and safety of tenants and it is unfeasible to so comply without removing the tenant; simultaneously with service of notice of eviction pursuant to this clause, the landlord shall notify the Department of Community Affairs of the intention to institute proceedings and shall provide the department with such other information as it may require pursuant to rules and regulations. The department shall inform all parties and the court of its view with respect to the feasibility of compliance without removal of the tenant and may in its discretion appear and present evidence; (3) seeks to correct an illegal occupancy because he has been cited by local or State housing inspectors or zoning officers and it is unfeasible to correct such illegal occupancy without removing the tenant; or (4) is a governmental agency which seeks to permanently retire the premises from the rental market pursuant to a redevelopment or land clearance plan in a blighted area. In those cases where the tenant is being removed for any reason specified in this subsection, no warrant for possession shall be issued until P.L.1967, c.79 (C.52:31B-1 et seq.) and P.L.1971, c.362 (C.20:4-1 et seq.) have been complied with.
h. The owner seeks to retire permanently the residential building or the mobile home park from residential use or use as a mobile home park, provided this subsection shall not apply to circumstances covered under subsection g. of this section.
i. The landlord or owner proposes, at the termination of a lease, reasonable changes of substance in the terms and conditions of the lease, including specifically any change in the term thereof, which the tenant, after written notice, refuses to accept; provided that in cases where a tenant has received a notice of termination pursuant to subsection g. of section 3 of P.L.1974, c.49 (C.2A:18-61.2), or has a protected tenancy status pursuant to the "Senior Citizens and Disabled Protected Tenancy Act," P.L.1981, c.226 (C.2A:18-61.22 et al.), or pursuant to the "Tenant Protection Act of 1992," P.L.1991, c.509 (C.2A:18-61.40 et al.), the landlord or owner shall have the burden of proving that any change in the terms and conditions of the lease, rental or regulations both is reasonable and does not substantially reduce the rights and privileges to which the tenant was entitled prior to the conversion.
j. The person, after written notice to cease, has habitually and without legal justification failed to pay rent which is due and owing.
k. The landlord or owner of the building or mobile home park is converting from the rental market to a condominium, cooperative or fee simple ownership of two or more dwelling units or park sites, except as hereinafter provided in subsection l. of this section. Where the tenant is being removed pursuant to this subsection, no warrant for possession shall be issued until this act has been complied with. No action for possession shall be brought pursuant to this subsection against a senior citizen tenant or disabled tenant with protected tenancy status pursuant to the "Senior Citizens and Disabled Protected Tenancy Act," P.L.1981, c.226 (C.2A:18-61.22 et al.), or against a qualified tenant under the "Tenant Protection Act of 1992," P.L.1991, c.509 (C.2A:18-61.40 et al.), as long as the agency has not terminated the protected tenancy status or the protected tenancy period has not expired.
l. (1) The owner of a building or mobile home park, which is constructed as or being converted to a condominium, cooperative or fee simple ownership, seeks to evict a tenant or sublessee whose initial tenancy began after the master deed, agreement establishing the cooperative or subdivision plat was recorded, because the owner has contracted to sell the unit to a buyer who seeks to personally occupy it and the contract for sale calls for the unit to be vacant at the time of closing. However, no action shall be brought against a tenant under paragraph (1) of this subsection unless the tenant was given a statement in accordance with section 6 of P.L.1975, c.311 (C.2A:18-61.9);
(2) The owner of three or less condominium or cooperative units seeks to evict a tenant whose initial tenancy began by rental from an owner of three or less units after the master deed or agreement establishing the cooperative was recorded, because the owner seeks to personally occupy the unit, or has contracted to sell the unit to a buyer who seeks to personally occupy it and the contract for sale calls for the unit to be vacant at the time of closing;
(3) The owner of a building of three residential units or less seeks to personally occupy a unit, or has contracted to sell the residential unit to a buyer who wishes to personally occupy it and the contract for sale calls for the unit to be vacant at the time of closing.
m. The landlord or owner conditioned the tenancy upon and in consideration for the tenant's employment by the landlord or owner as superintendent, janitor or in some other capacity and such employment is being terminated.
n. The person has been convicted of or pleaded guilty to, or if a juvenile, has been adjudicated delinquent on the basis of an act which if committed by an adult would constitute an offense under the "Comprehensive Drug Reform Act of 1987," N.J.S.2C:35-1 et al., involving the use, possession, manufacture, dispensing or distribution of a controlled dangerous substance, controlled dangerous substance analog or drug paraphernalia within the meaning of that act within or upon the leased premises or the building or complex of buildings and land appurtenant thereto, or the mobile home park, in which those premises are located, and has not in connection with his sentence for that offense either (1) successfully completed or (2) been admitted to and continued upon probation while completing, a drug rehabilitation program pursuant to N.J.S.2C:35-14; or, being the tenant or lessee of such leased premises, knowingly harbors or harbored therein a person who has been so convicted or has so pleaded, or otherwise permits or permitted such a person to occupy those premises for residential purposes, whether continuously or intermittently, except that this subsection shall not apply to a person harboring or permitting a juvenile to occupy the premises if the juvenile has been adjudicated delinquent upon the basis of an act which if committed by an adult would constitute the offense of use or possession under the said act. No action for removal may be brought pursuant to this subsection more than two years after the date of the adjudication or conviction or more than two years after the person's release from incarceration whichever is the later.
o. The person has been convicted of or pleaded guilty to, or if a juvenile, has been adjudicated delinquent on the basis of an act which if committed by an adult would constitute an offense under N.J.S.2C:12-1 or N.J.S.2C:12-3 involving assault, or terroristic threats against the landlord, a member of the landlord's family or an employee of the landlord; or, being the tenant or lessee of such leased premises, knowingly harbors or harbored therein a person who has been so convicted or has so pleaded, or otherwise permits or permitted such a person to occupy those premises for residential purposes, whether continuously or intermittently. No action for removal may be brought pursuant to this subsection more than two years after the adjudication or conviction or more than two years after the person's release from incarceration whichever is the later.
p. The person has been found, by a preponderance of the evidence, liable in a civil action for removal commenced under this act for an offense under N.J.S.2C:20-1 et al. involving theft of property located on the leased premises from the landlord, the leased premises or other tenants residing in the leased premises, or N.J.S.2C:12-1 or N.J.S.2C:12-3 involving assault or terroristic threats against the landlord, a member of the landlord's family or an employee of the landlord, or under the "Comprehensive Drug Reform Act of 1987," N.J.S.2C:35-1 et al., involving the use, possession, manufacture, dispensing or distribution of a controlled dangerous substance, controlled dangerous substance analog or drug paraphernalia within the meaning of that act within or upon the leased premises or the building or complex of buildings and land appurtenant thereto, or the mobile home park, in which those premises are located, and has not in connection with his sentence for that offense either (1) successfully completed or (2) been admitted to and continued upon probation while completing a drug rehabilitation program pursuant to N.J.S.2C:35-14; or, being the tenant or lessee of such leased premises, knowingly harbors or harbored therein a person who committed such an offense, or otherwise permits or permitted such a person to occupy those premises for residential purposes, whether continuously or intermittently, except that this subsection shall not apply to a person who harbors or permits a juvenile to occupy the premises if the juvenile has been adjudicated delinquent upon the basis of an act which if committed by an adult would constitute the offense of use or possession under the said "Comprehensive Drug Reform Act of 1987."
q. The person has been convicted of or pleaded guilty to, or if a juvenile, has been adjudicated delinquent on the basis of an act which if committed by an adult would constitute an offense under N.J.S.2C:20-1 et al. involving theft of property from the landlord, the leased premises or other tenants residing in the same building or complex; or, being the tenant or lessee of such leased premises, knowingly harbors therein a person who has been so convicted or has so pleaded, or otherwise permits such a person to occupy those premises for residential purposes, whether continuously or intermittently.
r. The person is found in a civil action, by a preponderance of the evidence, to have committed a violation of the human trafficking provisions set forth in section 1 of P.L.2005, c.77 (C.2C:13-8) within or upon the leased premises or the building or complex of buildings and land appurtenant thereto, or the mobile home park, in which those premises are located; or, being the tenant or lessee of such leased premises, knowingly harbors or harbored therein a person who has been engaged in human trafficking, or otherwise permits or permitted such a person to occupy those premises for residential purposes, whether continuously or intermittently. No action for removal may be brought pursuant to this subsection more than two years after the alleged violation has terminated. A criminal conviction or a guilty plea to a crime of human trafficking under section 1 of P.L.2005, c.77 (C.2C:13-8) shall be considered prima facie evidence of civil liability under this subsection.
For purposes of this section, (1) "developmental disability" means any disability which is defined as such pursuant to section 3 of P.L.1977, c.82 (C.30:6D-3); (2) "member of the immediate family" means a person's spouse, parent, child or sibling, or a spouse, parent, child or sibling of any of them; and (3) "permanently" occupies or occupied means that the occupant maintains no other domicile at which the occupant votes, pays rent or property taxes or at which rent or property taxes are paid on the occupant's behalf.
(cf: P.L.2013, c.51, s.7)
4. The Commissioner of Community Affairs shall, in accordance with the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), adopt rules and regulations as necessary to implement this act.
5. This act shall take effect on the first day of the third month next following enactment, and shall apply to any notice of a rent increase provided to a tenant by a landlord on or after the effective date, except that the Commissioner of Community Affairs may take such anticipatory actions as may be necessary to effectuate the provisions of this bill.
STATEMENT
This bill requires, along with the existing rent increase notice requirements, that a landlord provide a written explanation for a rent increase, which would:
(1) describe why the rent increase is not unconscionable;
(2) confirm that the increase complies with municipal ordinances, and other applicable laws; and
(3) list any expenses associated with the tenant's unit and common areas of the property that have contributed to the need for the rent increase.
Additionally, the bill also requires that if the tenant is a resident of a senior citizen housing project, which refers to a building with three or more dwelling units, intended for, and solely occupied by, senior citizens, then the written notice of increase in rent is to include:
(a) the contact information of an individual authorized to speak to the tenants about the proposed rent increase; and
(b) a statement, provided in the bill, in a bold typeface in a font size no less than one point larger than the point size of the rest of the written statement or 11 points, whichever is larger.
The bill also adjusts the underlying statutory language concerning notice requirements prior to rent increases to clarify that those notices have to be in writing, and establishes a penalty for a landlord's violation of the bill of $500, enforceable: (1) in an action brought by the Commissioner of Community Affairs or Attorney General; and (2) in a separate cause of action brought by and at the discretion of the tenant, who may recover the $500 penalty, in addition to reasonable attorney's fees or expenses.
The bill would take effect on the first day of the third month next following enactment, and would apply to any notice of a rent increase provided to a tenant by a landlord on or after that date.
The cost of housing in New Jersey, including rental housing, constitutes one of the most substantial financial challenges faced by residents of this State. Due to the housing shortage, in addition to the disparity in bargaining power between residential tenants and their landlords, a significant number of New Jersey residents struggle to afford rent and dispute rent increases by their landlords. New Jersey law requires a landlord to provide a written notice to the tenant whenever the landlord intends to increase rent, and a written notice to quit, or terminate, the tenancy at the end of the lease term. State law has not set forth a precise limit on rent increases, but has instead required that a rent increase not be "unconscionable," which may be asserted as a defense to an eviction by a residential tenant pursuant to subsection f. of section 2 of P.L.1974, c.49 (C.2A:18-61.1). The term "unconscionable" is defined on a case-by-case basis by the courts using the multi-factor test set forth by Fromet Properties, Inc. v. Buel, 294 N.J. Super. 601 (App. Div. 1996), which requires, among the other factors, a court to look at a landlord's expenses and profitability, and determine whether the rent increase would "shock the conscience" of a reasonable person. Due to the summary nature of landlord-tenant proceedings, limited discovery, case-by-case determinations of unconscionability, disparity of bargaining power, and limited precedent setting forth a bright line standard for unconscionable rent increases, residential tenants are limited in their ability to collect sufficient information in advance of the landlord's increase or, if necessary, eviction proceedings, and dispute a rent increase. Therefore, to protect the public health, housing stability, financial security, and well-being of residential tenants, it is in the public interest to require a landlord to provide a tenant written explanation for a rent increase and provide certain, specific notices.
