Bill Text: NJ A5036 | 2026-2027 | Regular Session | Introduced
Bill Title: The "Safeguarding Livable Units through Municipal Landlord Oversight and Regulation by DCA" or "SLUMLORD Act"; strengthens habitability protections for residential tenants; appropriates $5 million.
Sponsorship: Partisan Bill (Democrat 4)
Status: (Introduced) 2026-05-11 - Introduced, Referred to Assembly Housing Committee [A5036 Detail]
Download: New_Jersey-2026-A5036-Introduced.html
Sponsored by:
Assemblyman GABRIEL RODRIGUEZ
District 33 (Hudson)
Assemblyman MICHAEL VENEZIA
District 34 (Essex)
Assemblyman AL ABDELAZIZ
District 35 (Bergen and Passaic)
SYNOPSIS
The "Safeguarding Livable Units through Municipal Landlord Oversight and Regulation by DCA" or "SLUMLORD Act"; strengthens habitability protections for residential tenants; appropriates $5 million.
CURRENT VERSION OF TEXT
As introduced.
An Act concerning habitability violations for residential units, supplementing and amending various parts of the statutory law, and making an appropriation.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. (New section) This act shall be known and may be cited as the "Safeguarding Livable Units through Municipal Landlord Oversight and Regulation by DCA" or "SLUMLORD Act."
"Beneficial owner" means, with respect to an entity:
(1) an individual who, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise, exercises substantial control over the entity, and who owns or controls not less than 25 percent of the ownership interests of the entity;
(2) for an entity in which no individual both owns greater than 25 percent of the ownership interests in the entity and exercises substantial control over the entity, an individual who, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise, exercises substantial control over the entity, and who holds either greater than 10 percent of the ownership interests of the entity, or the greatest ownership interest in the entity, whichever ownership interest is greater but less than 25 percent; or
(3) for an entity in which no individual owns greater than 10 percent of the ownership interests of the entity or owns the greatest ownership interest in the entity, and also exercises substantial control over the entity, an individual who holds the greatest ownership interest in the entity.
"Bureau" means the Bureau of Housing Inspection in the Department of Community Affairs.
"Commissioner" means the Commissioner of Community Affairs.
"Department" means the Department of Community Affairs.
"Enforcing agency" means the same as the term is defined pursuant to section 3 of P.L.1975, c.217 (C.52:27D-121).
"Habitability" means:
(1) implied in every written lease, oral lease, or rental agreement for a rental unit, that the landlord warrants that the premises so leased or rented, including the areas used in common with other tenants or residents, are fit for human habitation and for the uses reasonably expected and intended by tenants, and that the tenants or occupants of the residential premises will not be subjected to any conditions that affect a vital facility, which would be dangerous, hazardous, or detrimental to a tenant's or occupant's life, health, or safety, or to the livability of the residential premises;
(2) the implied warranty of habitability, which shall include and encompass the ongoing judicial construction and development of the implied warranty of habitability in this State; or
(3) that the rental unit and common areas are free from violations, which affect a vital facility, of the State Uniform Construction Code, promulgated pursuant to the "State Uniform Construction Code Act," P.L.1975, c.217 (C.52:27D-119 et seq.), the "Hotel and Multiple Dwelling Law," P.L.1967, c.76 (C.55:13A-1 et seq.), and other similar provisions of law, including case law, that affects the health, safety, livability, and habitability of residential premises.
"Habitability violation" means any violation against a general or specific standard of habitability.
"Landlord" means a person or persons, who, as an individual, or through a partnership, corporation, limited liability company, or trust, or through an affiliate, subsidiary, or holding company of a partnership, corporation, limited liability company, or trust, owns or purports to own, a building in which there is rented, or offered for rent, a residential rental unit under either a written or oral lease, except dwelling units in rental premises containing not more than one dwelling unit or in owner-occupied premises of not more than three dwelling units. In the case of a mobile or manufactured home park, "landlord" shall include the owner of an individual dwelling unit within the mobile or manufactured home park, if the dwelling unit is leased by the owner of the individual dwelling unit, and shall include the owner of the dwelling site that is leased to the owner of an individual dwelling unit.
"Municipality" means any city, borough, town, township, or village in this State.
"Principal agent" means a natural person, designated by a landlord pursuant to paragraph (2) of subsection a. of section 4 of P.L. , c. (C. ) (pending before the Legislature as this bill), who is a beneficial owner of the landlord's rental business or entity, who shall also be, as applicable to the landlord's business entity, a sole proprietor of the rental business, a senior or managing partner of a partnership, a member of a member-managed limited liability company, a manager of a manager-managed limited liability company, or the director or officer of a corporation, or other similar manager or officer, who shall:
(1) receive complaints from the landlord's tenants for habitability violations;
(2) be authorized to direct the property management company or other agent of the landlord in charge of making repairs, to abate a habitability violation;
(3) be authorized to accept service of process, and communicate and receive court filings and other legal documents from the landlord's registered agent or process server directly; and
(4) be authorized to receive, respond to, and discuss confidential communications of the landlord with the landlord's attorney or other persons.
"Program" means the Habitability Enforcement and Affirmative Litigation Program, established pursuant to section 3 of P.L. , c. (C. ) (pending before the Legislature as this bill).
"Rental unit" means any residential building or structure, or any part thereof or land appurtenant thereto that is rented or offered for rent for living or dwelling purposes, which shall not include a seasonal rental unit or dwelling space in any place of transient accommodation. Whether a dwelling space is a "transient accommodation" shall be determined based on the following and other factors: the duration of an individual's stay in the accommodation; whether the accommodation is an individual's sole residence; whether the individual intends to stay in the accommodation for a substantial period of time or indefinitely; whether the operator or owner of the accommodation knows or should know that the individual is not a short-term guest; and whether the relationship between the individual and the owner or operator of the accommodation mirrors a landlord-tenant relationship. "Rental unit" shall also mean, in the case of a mobile or manufactured home park, an individual dwelling unit or a dwelling site within the mobile or manufactured home park, if the individual dwelling unit or dwelling site is offered for rent.
"Seasonal rental unit" means a dwelling unit located in the State rented for a term of not more than 125 consecutive days for residential purposes by a person having a permanent, habitable residence elsewhere, but shall not include use or rental of living quarters by migrant, temporary, or seasonal workers in connection with any work or place where work is being performed.
"Severe habitability violation" means:
(1) more than 10 habitability violations in the aggregate for any of a landlord's rental units, or more than three habitability violations for any one unit, which remained unabated following written notice to the landlord and a reasonable opportunity to cure; or
(2) a habitability violation for which the landlord has either:
(a) not abated the violation after being provided multiple written notices by the tenant after being afforded reasonable opportunities to cure following each of the respective notices;
(b) failed on repeated instances to respond to a complaint or court notice, or has failed to appear in court on repeated instances for proceedings relating to a habitability violation; or
(3) a habitability violation that constitutes a life-hazard violation that is not resolved following a third reinspection by the enforcing agency.
"Tenant" means a residential lessee, sublessee, licensee, or other person entitled to the possession or to the use or occupancy of the whole or a part of a rental unit.
3. (New section) a. The Commissioner of Community Affairs shall establish a Habitability Enforcement and Affirmative Litigation Program in the Department of Community Affairs, which shall, in conjunction with an enforcing agency and the Bureau of Housing Inspection in the department, provide information to tenants concerning the enforcement of habitable living conditions and habitability violations. The program shall also, through public-private partnerships, utilize affirmative litigation, authorized pursuant to subsection b. of section 4 of P.L. , c. (C. ) (pending before the Legislature as this bill), to deter and prosecute habitability violations on behalf of residential tenants. The program shall not, except as provided in subsection e. of this section, expend resources representing residential tenants in defense of an eviction action. The program shall prioritize apartments and multiple dwellings, and landlords who lease a significant number of residential rental units, where:
(1) the program has identified a significant number of alleged, existing, or prior habitability violations; or
(2) a landlord has repeatedly been found liable for, or has received numerous complaints related to, habitability violations.
b. The program shall consist, at a minimum, of:
(1) a Tenant Advocate Director, who shall be employed with the program and shall report to the commissioner;
(2) a Director of Affirmative Litigation, who shall be employed with the program and shall report to the commissioner; and
(3) any other staff that the commissioner, Tenant Advocate Director, or Director of Affirmative Litigation determine necessary to effectuate the provisions of P.L. , c. (C. ) (pending before the Legislature as this bill).
c. The Tenant Advocate Director shall:
(1) establish and oversee the operations of a Tenant Advocate Service, which shall employ or contract with, recruit, and train State, county, and municipal tenant advocates, via a process and methods determined by the commissioner and Tenant Advocate Director, to conduct outreach, host informational seminars, and provide information enabling residential tenants to enforce habitable living conditions for residential rental units in this State and identify habitability violations;
(2) work in conjunction with an enforcing agency, the bureau, local resource agencies, and the Director of Affirmative Litigation to effectuate the purposes of the Tenant Advocate Service pursuant to P.L. , c. (C. ) (pending before the Legislature as this bill) and rules established by the commissioner pursuant to section 12 of P.L. , c. (C. ) (pending before the Legislature as this bill);
(3) be qualified in accordance with criteria established by the commissioner; and
(4) work with the Director of Affirmative Litigation to facilitate the identification of apartments, multiple dwellings, and landlords that are subject to prioritized enforcement pursuant to subsection a. of this section, and connect the tenants of such residential properties with the State, county, and municipal tenant advocates, and the Affirmative Litigation Initiative.
d. The Director of Affirmative Litigation shall:
(1) establish and oversee the operations of an Affirmative Litigation Initiative under the program, which shall contract with or employ attorneys, nonprofit legal organizations, and law firms, to litigate cases on behalf of tenants pursuant to subsection b. of section 4 of P.L. , c. (C. ) (pending before the Legislature as this bill), alleging habitability violations, to affirmatively enforce habitable living conditions at rental units;
(2) have substantial litigation experience and be qualified in accordance with criteria established by the commissioner; and
(3) focus the operations of the Affirmative Litigation Initiative and litigation efforts on landlords of multiple dwellings, and landlords that are subject to prioritized enforcement pursuant to subsection a. of this section.
e. The Affirmative Litigation Initiative shall not represent residential tenants in defense of an eviction action, unless the eviction action was filed, or there is sufficient evidence to allege that the eviction action was filed, as reprisal pursuant to P.L.1970, c.210 (C.2A:42-10.10 et seq.), including reprisal for a tenant's connection to the program, efforts to enforce habitable living conditions, or reporting of any habitability violations.
(2) Every landlord shall designate at least one principal agent who shall be the primary agent of the landlord for the purposes of complying with the provisions of P.L. , c. (C. ) (pending before the Legislature as this bill). A written lease shall clearly specify, in no smaller than 14-point font, the name, address, primary and emergency contact information, and email address, of the principal agent, who a tenant may contact for habitability violations, and serve with process for the purposes of an action brought pursuant to subsection b. of section 4 of P.L. , c. (C. ) (pending before the Legislature as this bill), which alleges a severe habitability violation. A principal agent shall have an obligation to update the information required pursuant to this paragraph on a continuing basis. The failure to receive service of process for a principal agent's failure to update the information required pursuant to this paragraph shall not constitute a defense, affirmative or otherwise, in an action brought by the tenant pursuant to subsection b. of section 4 of P.L. , c. (C. ) (pending before the Legislature as this bill).
b. (1) The Affirmative Litigation Initiative on behalf of a tenant, or a tenant, may bring an action in a court of competent jurisdiction against a landlord for a habitability violation, which remains unabated following written notice to the landlord and a reasonable opportunity to cure, and shall be awarded all damages appropriate within the context of the violation, taking into account the duration and severity of the violation and other factors the court deems relevant. A tenant:
(a) bringing an action pursuant to this paragraph shall not be required to place any rent monies in escrow at the commencement of the action, but a court of competent jurisdiction may order a tenant to place rent monies in escrow as the court deems proper with consideration of any habitability violations alleged or proven in the litigation; and
(b) shall not bring an action pursuant to this paragraph or exercise any of the remedies set forth pursuant to P.L. , c. (C. ) (pending before the Legislature as this bill), if a landlord, following notice to the landlord and a reasonable opportunity to cure: authorizes a tenant to make repairs as are feasible for the tenant and necessary to cure the habitability violation and to deduct from the rent due and owing to the landlord the amount that is necessary to make the repairs; or if a landlord and tenant, following the tenant's written notice to the landlord, agree in writing that a certain portion of the rent due and owing, deducted and withheld by a tenant after a tenant made the repairs necessary to cure a habitability violation, is in satisfaction of the rent following the tenant's abatement of the habitability violation.
(2) It shall be an affirmative defense against an action alleging a habitability violation that the tenant is currently in arrears on any rent lawfully due and owing to the landlord, unless the rent in arrears, due and owing to the landlord, is:
(a) withheld directly as a result of a habitability violation, after the tenant provided notice to the landlord and provided a reasonable opportunity to cure the violation prior to withholding rent;
(b) withheld directly as a result of the tenant's exercise of lawful statutory claims or defenses; or
(c) in arrears because of expenses incurred by the tenant to address the alleged habitability violations.
(3) Notwithstanding any damages awarded pursuant to paragraph (1) of this subsection or pursuant to any other remedy available to a tenant for a habitability violation, including all remedies cumulatively available under State and federal statutory, administrative, and common law, if the court finds, by preponderance of the evidence, that a habitability violation exists, the tenant shall recover $1,000 from the landlord, in addition to reasonable attorney's fees; court costs; expenses for expert witnesses; and other related fees and expenses incurred in proving and abating a habitability violation. Notwithstanding any damages awarded pursuant to paragraph (1) of this subsection or pursuant to any other remedy available to a tenant for a habitability violation, including all remedies cumulatively available under State and federal statutory, administrative, and common law, if the court finds, by preponderance of the evidence, that a severe habitability violation exists, the tenant shall recover $2,000 from the landlord, and $2,000 from the principal agent, in addition to reasonable attorney's fees; court costs; expenses for expert witnesses; and other related fees and expenses incurred in proving and abating a habitability violation. If the tenant proves, by preponderance of the evidence, a severe habitability violation exists, and the tenant has withheld a certain amount of rent to make the repairs, the tenant shall be awarded treble damages of the amount necessary to make the repairs.
(4) A court shall terminate, upon the request of a tenant, a lease or agreement containing a provision that waives the implied warranty of habitability, or any other habitability violation.
(5) A landlord shall be subject to the damages and remedies set forth in this subsection for each violation against each tenant.
c. (1) If a court of competent jurisdiction determines that there exists a severe habitability violation, pursuant to an action brought by the Affirmative Litigation Initiative on behalf of a tenant, or the tenant, pursuant to subsection b. of this section, the court shall order the landlord to abate the violation and shall specify a time period for the correction of the violation. The order shall provide that, if the landlord does not comply with the order during the time period specified in the order, the program may abate the condition giving rise to the violation so as to comply with the order, at the cost of the landlord, and the program may expend funds provided to the program for such purpose and charge the same against the landlord. The amount thereof shall be a lien against the premises.
(2) If a court of competent jurisdiction determines that there exists a severe habitability violation, pursuant to an action brought by the tenant pursuant to subsection b. of this section, the court shall order the landlord to abate the violation and shall specify a time period for the correction of the violation. The order shall provide that, if the landlord does not comply with the order during the time period specified in the order, the municipality in which the landlord's unit is located, including a municipal enforcing agency or other similar agency of the municipality, may abate the condition giving rise to the violation so as to comply with the order, at the cost of the landlord and may expend funds for such purpose and charge the same against the landlord. The amount thereof shall be a lien against the premises in the same manner that taxes are made a lien against land pursuant to Title 54 of the Revised Statutes, and the payment thereof shall be enforced within the same time, in the same manner, and by the same proceedings as the payment of taxes is otherwise enforced under Title 54 of the Revised Statutes.
(3) A principal agent of a landlord who is found liable for a severe habitability violation:
(a) may be charged with a disorderly persons offense pursuant to section 7 of P.L. , c. (C. ) (pending before the Legislature as this bill); and
(b) shall be personally liable in an action pursuant to paragraph (1) of subsection b. of this section, and in accordance with section 5 of P.L. , c. (C. ) (pending before the Legislature as this bill).
d. If a property is being managed by a property manager or property management company that is a real estate broker, broker-salesperson, or salesperson, licensed pursuant to R.S.45:15-1 et seq., other than a beneficial owner of the landlord's rental business or entity, and that property manager or property management company requests that the principal agent or landlord make repairs to the property but the repairs are not made, through no fault of the property manager or property management company, the property manager or property management company shall not have any direct or indirect liability under P.L. , c. (C. ) (pending before the Legislature as this bill) or otherwise, including but not limited to the principal agent or landlord, for the failure to make those repairs.
5. (New section) A court may hold a landlord liable for a habitability violation pursuant to P.L. , c. (C. ) (pending before the Legislature as this bill), in an action brought by the tenant, or the Affirmative Litigation Initiative on behalf of a tenant, pursuant to subsection b. of section 4 of P.L. , c. (C. ) (pending before the Legislature as this bill). Notwithstanding any provision of section 30 of P.L.2012, c.50 (C.42:2C-30), N.J.S.14A:6-1 et seq., or any other provision of law to the contrary, a court may hold a principal agent personally liable for a severe habitability violation, in an action brought by the tenant or the Affirmative Litigation Initiative pursuant to subsection b. of section 4 of P.L. , c. (C. ) (pending before the Legislature as this bill). If the landlord has designated more than one principal agent, the principal agents shall be jointly and severally liable. A principal agent shall be held personally liable pursuant to P.L. , c. (C. ) (pending before the Legislature as this bill), provided:
a. by preponderance of the evidence, a court of competent jurisdiction determines that there exists one or more severe habitability violations; and
b. notice of the action alleging a severe habitability violation has been issued to the principal agent, the registered agent of the landlord, each holder of a recorded mortgage, and other existing lienholders, if provided within the landlord's registration information pursuant to section 2 of P.L.1974, c.50 (C.46:8-28) and, if applicable, section 12 of P.L.1967, c.76 (C.55:13A-12). If the landlord is not registered, in violation of section 2 of P.L.1974, c.50 (C.46:8-28), section 12 of P.L.1967, c.76 (C.55:13A-12, or both, then the notice required pursuant to this subsection shall only be required with respect to the principal agent.
(1) information pertaining to landlord identification that is required to be submitted to the Department of Community Affairs by a landlord pursuant to section 12 of P.L.1967, c.76 (C.55:13A-12) or section 2 of P.L.1974, c.50 (C.46:8-28), or any other information that the commissioner determines necessary to effectuate the purposes of P.L. , c. (C. ) (pending before the Legislature as this bill);
(2) any case filed by a tenant alleging a habitability violation pursuant to subsection b. of section 4 of P.L. , c. (C. ) (pending before the Legislature as this bill), which has resulted in favorable disposition to the plaintiff-tenant by a Judge of the Superior Court of New Jersey; and
(3) each notice and order, violation, or citation issued for the landlord's rental units, including units and multiple dwellings that are not subject to a pending landlord-tenant action, by the Department of Community Affairs or by the municipal department or enforcing agency having jurisdiction over buildings located in the respective municipality, that are related to: habitability; fire safety; health; utilities, including gas, water, or electricity; noise violations; and any other notice or order, violation, or citation determined necessary by the commissioner to include in the habitability database to effectuate the purposes of P.L. , c. (C. ) (pending before the Legislature as this bill).
b. It shall be the duty of the municipal department or enforcing agency having jurisdiction over buildings located in the respective municipality, to file with the commissioner a true copy of each notice and order, violation, or citation of such municipal department or enforcing agency alleging the occupation of a building containing a violation or citation described pursuant to paragraph (3) of subsection a. of this section, or the existence of a nuisance in the building and of each notice, order, rule, or certificate showing the clearance, correction, or abatement of the violation or nuisance within 72 hours from the date of issuance of the notice, order, rule, or certificate, or within any other time period specified in the notice, order, rule or certificate. The municipal department or enforcing agency filing the true copy with the commissioner may charge reasonable fees for the inspection of multiple dwellings, to offset the actual costs of compliance with the provisions of P.L. , c. (C. ) (pending before the Legislature as this bill).
c. A defect contained in an index and file, established and maintained pursuant to subsection a. of this section, shall be categorized:
(1) as a first, second, or third and subsequent defect;
(2) by the length of time that the defect has persisted; and
(3) by whether or not the subject of the defect is non-hazardous, hazardous, or immediately hazardous.
d. In any action or proceeding between a landlord and tenant before the Superior Court of New Jersey, Law Division, Special Civil Part, or before the Superior Court of New Jersey, Law Division, if the action was removed to the Law Division pursuant to N.J.S.2A:18-60, or pursuant to P.L.1971, c.244 (C.2A:42-85 et seq.) or subsection b. of section 4 of P.L. , c. (C. ) (pending before the Legislature as this bill):
(1) the index and files established and maintained pursuant to subsection a. of this section shall be electronically displayed or printed, and copies made available for the court and all litigants, subject to the redaction of identifying information for those individuals and properties not subject to the pending litigation; and
(2) the contents of the index and files shall constitute prima facie evidence of any matter stated therein.
e. A landlord may petition the department for removal from the habitability database, in a form and manner determined by the department, and the request shall be granted if the petitioner can substantiate, to the satisfaction of the department, that the landlord does not meet the requirements of this section for inclusion in the habitability database.
8. (New section) A habitability violation, as the term is defined pursuant to section 2 of P.L. , c. (C. ) (pending before the Legislature as this bill), which remains unabated following written notice to a landlord and a reasonably opportunity to cure, shall constitute an unlawful practice pursuant to the New Jersey consumer fraud act, P.L.1960, c.39 (C.56:8-1 et seq.).
9. Section 2 of P.L.1974, c.50 (C.46:8-28) is amended to read as follows:
2. Every landlord shall, within 30 days following the effective date of this act, or at the time of the creation of the first tenancy in any newly constructed or reconstructed building, file with the clerk of the municipality, or with such other municipal official as is designated by the clerk, in which the residential property is situated, in the case of a one-dwelling unit rental or a two-dwelling unit non-owner occupied premises, or with the Bureau of Housing Inspection in the Department of Community Affairs in the case of a multiple dwelling as defined in section 3 of the "Hotel and Multiple Dwelling Law" (C.55:13A-3), a certificate of registration on forms prescribed by the Commissioner of Community Affairs, which shall contain the following information:
a. The name and address of the record owner or owners of the premises and the record owner or owners of the rental business if not the same persons. In the case of a partnership the names of all general partners shall be provided;
b. If the record owner is a corporation, a limited liability company, or any other legal or commercial entity, the name and address of the registered agent, in addition to, as applicable to the entity, the members with at least a 10 percent interest in a member-managed limited liability company, the managers of a manager-managed limited liability company, specifying which managers hold at least a 10 percent interest in the manager-managed limited liability company, the principal agent or agents, as the term is defined pursuant to section 2 of P.L. , c. (C. ) (pending before the Legislature as this bill), and corporate officers and directors of said corporation;
c. If the address of any record owner is not located in the county in which the premises are located, the name and address of a person who resides in the county in which the premises are located and is authorized to accept notices from a tenant and to issue receipts therefor and to accept service of process on behalf of the record owner;
d. The name and address of the managing agent of the premises, if any;
e. The name and address, including the dwelling unit, apartment or room number of the superintendent, janitor, custodian or other individual employed by the record owner or managing agent to provide regular maintenance service, if any;
f. The name, address and telephone number of an individual representative of the record owner or managing agent who may be reached or contacted at any time in the event of an emergency affecting the premises or any unit of dwelling space therein, including such emergencies as the failure of any essential service or system, and who has the authority to make emergency decisions concerning the building and any repair thereto or expenditure in connection therewith and shall, at all times, have access to a current list of building tenants that shall be made available to emergency personnel as required in the event of an emergency;
g. The name and address of every holder of a recorded mortgage on the premises;
h. If fuel oil is used to heat the building and the landlord furnishes the heat in the building, the name and address of the fuel oil dealer servicing the building and the grade of fuel oil used.
(cf: P.L.2003, c.56, s.2)
10. Section 30 of P.L.2012, c.50 (C.42:2C-30) is amended to read as follows:
30. a. The debts, obligations, or other liabilities of a limited liability company, whether arising in contract, tort, or otherwise:
(1) are solely the debts, obligations, or other liabilities of the company; and
(2) do not become the debts, obligations, or other liabilities of a member or manager solely by reason of the member acting as a member or manager acting as a manager.
b. The failure of a limited liability company to observe any particular formalities relating to the exercise of its powers or management of its activities is not a ground for imposing liability on the members or managers for the debts, obligations, or other liabilities of the company.
c. Notwithstanding any provision of P.L.2012, c.50 (C.42:2C-1 et seq.) to the contrary, a principal agent of a limited liability company that is a landlord shall be personally liable for a severe habitability violation following the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill), in an action brought by a tenant or the Affirmative Litigation Initiative pursuant to subsection b. of section 4, and section 5, of P.L. , c. (C. ) (pending before the Legislature as this bill).
(cf: P.L.2012, c.50, s.30)
11. N.J.S.14A:6-12 is amended to read as follows:
(1) In addition to any other liabilities imposed by law upon directors of a corporation, directors who vote for, or concur in, any of the following corporate actions
(a) the declaration of any dividend or other distribution of assets to the shareholders contrary to the provisions of this act or contrary to any restrictions contained in the certificate of incorporation;
(b) the purchase of the shares of the corporation contrary to the provisions of this act or contrary to any restrictions contained in the certificate of incorporation;
(c) the distribution of assets to shareholders during or after dissolution of the corporation without paying, or adequately providing for, all known debts, obligations and liabilities of the corporation, except that the directors shall be liable only to the extent of the value of assets so distributed and to the extent that such debts, obligations and liabilities of the corporation are not thereafter paid, discharged, or barred by statute or otherwise;
(d) the complete liquidation of the corporation and distribution of all of its assets to its shareholders without dissolving or providing for the dissolution of the corporation and the payment of all fees, taxes, and other expenses incidental thereto, except that the directors shall be liable only to the extent of the value of assets so distributed and to the extent that such fees, taxes, and other expenses incidental to dissolution are not thereafter paid;
(e) the making of any loan to an officer, director or employee of the corporation or of any subsidiary thereof contrary to the provisions of this act;
(f) if authorized by the directors of a corporation that is a landlord, the action of a principal agent that results in a severe habitability violation pursuant to P.L. , c. (C. ) (pending before the Legislature as this bill);
shall be jointly and severally liable to the corporation for the benefit of its creditors or shareholders, to the extent of any injury suffered by such persons, respectively, as a result of any such action.
(2) Any director against whom a claim is successfully asserted under this section shall be entitled to contribution from the other directors who voted for, or concurred in, the action upon which the claim is asserted.
(3) Directors against whom a claim is successfully asserted under this section shall be entitled, to the extent of the amounts paid by them to the corporation as a result of such claims,
(a) upon payment to the corporation of any amount of an improper dividend or distribution, to be subrogated to the rights of the corporation against shareholders who received such dividend or distribution with knowledge of facts indicating that it was not authorized by this act, in proportion to the amounts received by them respectively;
(b) upon payment to the corporation of any amount of the purchase price of an improper purchase of shares, to have the corporation rescind such purchase of shares and recover for their benefit, but at their expense, the amount of such purchase price from any seller who sold such shares with knowledge of facts indicating that such purchase of shares by the corporation was not authorized by this act;
(c) upon payment to the corporation of the claim of any creditor by reason of a violation of paragraph 14A:6-12(1)(c), to be subrogated to the rights of the corporation against shareholders who received an improper distribution of assets;
(d) upon payment to the corporation of the amount of any loan made improperly, to be subrogated to the rights of the corporation against the person who received the improper loan.
(4) A director shall not be liable under this section if, in the circumstances, he discharged his duty to the corporation under section 14A:6-14.
(5) Every action against a director for recovery upon a liability imposed by subsection 14A:6-12(1) shall be commenced within six years next after the cause of any such action shall have accrued.
(cf: P.L.1973, c.366, s.27)
12. Section 1 of P.L.2013, c.206 (C.2A:18-61.66) is amended to read as follows:
1. a. If a residential lease agreement provides that the landlord is or may be entitled to recover either attorney's fees or expenses, or both, as a result of the failure of the tenant to perform any covenant or agreement in the lease, or if the lease provides that such costs may be recovered as additional rent, the court shall read an additional parallel implied covenant into the lease. This implied covenant shall require the landlord to pay the tenant either the reasonable attorney's fees or the reasonable expenses, or both, incurred by that tenant, or sought by nonprofit legal services or pro bono counsel for a tenant, as the result of the tenant's successful defense of any action or summary proceeding commenced by the landlord against the tenant, arising out of an alleged failure of the tenant to perform any covenant or agreement in the lease, or as the result of any successful action or summary proceeding commenced by the tenant against the landlord, arising out of the failure of the landlord to perform any covenant or agreement in the lease.
The court shall order the landlord to pay such attorney's fees or expenses, or both, that are actually and reasonably incurred by a tenant, or sought by nonprofit legal services or pro bono counsel for a tenant, who is the successful party in such actions or proceedings to the same extent the landlord is entitled to recover attorney's fees and expenses, or both, as provided in the lease. The court shall have discretion with respect to awards of attorney's fees or expenses, or both, for tenants to the same degree as it has with respect to awards of attorney's fees or expenses, or both, for landlords as provided under the lease either explicitly or implicitly. An order based on this implied covenant shall require the landlord to pay the tenant such costs either as money damages or a credit against future rent, as determined by the tenant. Any waiver of this section shall be void as against public policy.
Notwithstanding the foregoing, in an action or summary proceeding for non-payment of rent a tenant who pays all rent currently due and owing on or after the filing of the complaint but prior to entry of a final judgment, and whom the court finds presented no meritorious defense to the complaint other than said payment, shall not be deemed to have successfully defended against the action or summary proceeding for the purposes of the award of attorney's fees or expenses, or both.
b. Notwithstanding any provision of subsection a. of this section to the contrary:
(1) P.L.2013, c.206 (C.2A:18-61.66 et seq.) shall apply to an action brought pursuant to subsection b. of section 4 of P.L. , c. (C. ) (pending before the Legislature as this bill); and
(2) reasonable attorney's fees, court costs, expenses for expert witnesses, and other related fees and expenses incurred by a tenant or sought by nonprofit legal services or pro bono counsel for a tenant in proving a habitability violation, as the term is defined pursuant to section 2 of P.L. , c. (C. ) (pending before the Legislature as this bill), shall be awarded to a tenant of a landlord who, by preponderance of the evidence, is found liable for a habitability violation.
c. As used in [this act] P.L.2013, c.206 (C.2A:18-61.66 et seq.), "expenses" shall include expenses directly related to the litigation including, but not limited to, court costs and expenses for witnesses. "Expenses" shall not include personal expenses for travel, reimbursement for missed work time, or child care.
(cf: P.L.2013, c.206, s.1)
13. The Commissioner of Community Affairs shall promulgate rules and regulations, in accordance with the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1, et seq.), that are necessary to effectuate and administer the provisions of P.L. , c. (C. ) (pending before the Legislature as this bill).
14. There is appropriated $5,000,000 from the General Fund to the Department of Community Affairs for the administration of the Habitability Enforcement and Affirmative Litigation Program to effectuate the provisions of P.L. , c. (C. ) (pending before the Legislature as this bill).
15. This act shall take effect on the first day of the fourth month next following enactment, except that the Commissioner of Community Affairs and Administrative Director of the Courts may take anticipatory action necessary to implement the provisions of P.L. , c. (C. ) (pending before the Legislature as this bill).
STATEMENT
This bill, known as the "Safeguarding Livable Units through Municipal Landlord Oversight and Regulation by DCA" or "SLUMLORD Act," strengthens protections for residential tenants for violations of the implied warranty of habitability and other code violations that severely affect the habitability of the tenant's rental unit. The bill requires the Commissioner of Community Affairs (commissioner) to establish a Habitability Enforcement and Affirmative Litigation Program (program) in the Department of Community Affairs (DCA). The bill also: codifies the implied warranty of habitability; authorizes a private cause of action for residential tenants (tenants) for habitability violations and provides certain remedies; imposes personal liability and criminal penalties on certain landlords and their agents for severe habitability violations; extends a tenant's ability to recover attorney's fees and certain costs to actions arising from habitability violations; and establishes a habitability database to enhance the efficacy of the program.
Specifically, the bill requires the establishment of the program to: provide information to tenants regarding habitability violations, as defined in the bill; and engage in litigation, through public-private partnerships, on behalf of tenants to enforce habitability violations. The program is to consist of a Tenant Advocate Service and Affirmative Litigation Initiative, which are not to expend resources representing residential tenants in defense of an eviction action, unless for certain cases involving reprisal.
The bill requires a landlord, as defined in the bill, to designate at least one principal agent, as defined in the bill, who is to be the primary agent of the landlord for the purposes of complying with the bill, receiving habitability violation complaints from tenants, directing the property management company to abate violations, and, who is to be authorized to accept service of process from the registered agent or process server, receive confidential communications, and be personally and criminally liable for severe habitability violations, as defined in the bill. The bill provides the principal agent is to meet certain requirements described in the bill. The bill requires a written lease to clearly provide certain contact information of the principal agent, and the principal agent to continuously update this information as necessary.
The bill provides a private cause of action and permits a tenant to bring an action alleging a habitability violation, which remains unabated following written notice to the landlord and a reasonable opportunity to cure. A tenant is not to bring an action pursuant to the bill under certain circumstances enumerated in the bill. The bill provides that it is an affirmative defense against an action alleging a habitability violation if the tenant is currently in arrears on any rent lawfully due and owing to the landlord, unless the rent is in arrears under certain circumstances. The bill authorizes the court to award all appropriate damages. The bill specifies that for habitability violations, the landlord would be subject to the penalties set forth in the bill for each violation against each tenant.
The bill further provides that a habitability violation is to constitute an unlawful practice pursuant to the New Jersey consumer fraud act, P.L.1960, c.39 (C.56:8-1 et seq.), and prescribes certain penalties depending on whether there exists a habitability violation or a severe habitability violation. If a court determines that a severe habitability violation exists, the bill requires a court to order the landlord to abate the violation in a specified time period, which, if not timely abated, would enable the program, or the municipality in which the landlord's unit is located, including a municipal enforcing agency or other similar agency of the municipality (municipality), to abate the condition giving rise to the violation, at the landlord's expense, which expense would constitute a lien against the premises. If the lien is held by the municipality, the lien is to be held and enforced in the same manner, time, and proceedings as taxes owed to the municipality pursuant to Title 54 of the Revised Statutes.
The bill provides that a court may hold a principal agent personally liable for a severe habitability violation, as specified in the bill. The bill also establishes that a principal agent is guilty of a disorderly persons offense if the principal agent intentionally, recklessly, or negligently commits or engages in conduct resulting in a severe habitability violation. A disorderly persons offense is punishable by a term of imprisonment of up to six months, a fine of up to $1,000, or both.
The bill provides that if a property is being managed by a property manager or property management company that is a licensed real estate broker, broker-salesperson, or salesperson, other than a beneficial owner of the landlord's rental business or entity, and that property manager or property management company requests that the principal agent or landlord make repairs to the property but the repairs are not made, through no fault of the property manager or property management company, the property manager or property management company are not to have any direct or indirect liability under the bill or otherwise, including but not limited to the principal agent or landlord, for the failure to make those repairs.
To facilitate the efficacy of the program, the bill requires the commissioner, in coordination with the Administrative Director of the Courts, to establish and maintain a habitability database, which is required to contain certain information pertaining to habitability violations, as described in the bill. The bill permits a landlord to petition the DCA for removal from the habitability database if the landlord can demonstrate that they do not meet the requirements under the bill for inclusion in the database.
The bill amends section 2 of P.L.1974, c.50 (C.46:8-28) of the "Landlord Identity Law," to expand the information and individuals required to provide information for purposes of the certificate of registration, to include the principal agent, certain corporate officers and directors, and to facilitate the identification of a beneficial owner, as defined in the bill. Further, the bill amends P.L.2013, c.206 (C.2A:18-61.66), which permits a tenant to recover attorney's fees to the same extent as the landlord, if the residential lease permits the landlord to recover attorney's fees for actions arising out of the lease. The bill extends and modifies the tenant's ability to recover attorney's fees and certain costs to actions arising from habitability violations.
The bill appropriates $5 million from the General Fund to the Habitability Enforcement and Affirmative Litigation Program to effectuate the provisions of the bill.
