Jason R. Rittie, Esq.Einhorn, Harris, Ascher, Barbarito & Frost PC 165 East Main Street Denville, New Jersey 07834 (973) 627-7300 Jrittie@einhornharris.com
Bills 2012-2013: ◦ A1124 would require landlord to permit tenant to remain in foreclosed property in certain circumstances. ◦ A1712 would permit eviction for good cause of tenants who are creating nuisance; requires court to notify landlord when restraining order has been issued barring tenant from residential rental property. ◦ A1518 would permit tenant to be removed from leased housing due to criminal activity under certain circumstances. ◦ A705 would require residential leases to be provided in both English and Spanish in certain municipalities. ◦ S108 would require residential leases to specify when rent payments are due and allows residential leases to require weekly, monthly, or annual payments or a single payment for the entire lease term. ◦ S1700 would require three-day attorney review period for residential leases.
Fair Housing Act: N.J.S.A. 52:27D-301 et seq. ◦ Enacted to satisfy “the constitutional obligation enumerated by the Supreme Court” in the Mount Laurel cases and to provide for “resolution of existing and future disputes involving exclusionary zoning” through “the mediation and review process” set forth in the Act rather than by litigation, and “to provide various alternatives to the use of the builder’s remedy as a method of achieving fair share housing.”
The heart of the New Jersey Fair Housing Act is N.J.S.A. 52:27D-310, which provides as follows: A municipalitys housing element shall be designed to achieve the goal of access to affordable housing to meet present and prospective housing needs, with particular attention to low and moderate income housing, and shall contain at least: a. An inventory of the municipalitys housing stock by age, condition, purchase or rental value, occupancy characteristics, and types, including the number of units affordable to low and moderate income households and substandard housing capable of being rehabilitated… b. A projection of the municipalitys housing stock, including the probable future construction of low and moderate income housing, for the next six years... c. An analysis of the municipalitys demographic characteristics, including but not necessarily limited to, household size, income level and age;
d. An analysis of the existing and probable futureemployment characteristics of the municipality; e. A determination of the municipalitys present andprospective fair share for low and moderate income housing andits capacity to accommodate its present and prospective housingneeds, including its fair share for low and moderate incomehousing; and f. A consideration of the lands that are most appropriate forconstruction of low and moderate income housing and of theexisting structures most appropriate for conversion to, orrehabilitation for, low and moderate income housing, including aconsideration of lands of developers who have expressed acommitment to provide low and moderate income housing.
The Creation of Affordable Units: ◦ COAH Units: The Local Planning Board adopts a Housing Element as part of the Master Plan, and also adopts a Fair Share Plan to outline how it will address its constitutionally mandated obligation to provide affordable housing. ◦ Municipality then petitions COAH for substantive certification, and if granted, is protected for a period of time from a builder’s remedy lawsuit.
Five Major legal instruments comprise the Uniform Housing Affordability Controls: ◦ Declaration of Covenants, Conditions and Restrictions ◦ Deed Restriction ◦ Deed ◦ Recapture Mortgage ◦ Recapture Note
The Section 8 Tenant-Based Assistance Program administered by the New Jersey Department of Community Affairs (DCA), Division of Housing and Community Resources is funded by the United States Department of Housing and Urban Development (HUD). The purpose of the program is to make decent, safe and sanitary housing available to very low-income households in the private rental market. Households that meet eligibility requirements normally pay no more than 30 percent of their adjusted monthly income towards their monthly rent and utility costs. The balance of the rent is paid by the program directly to the owner of the rental property. The DCA administers two Section 8 Tenant-Based Assistance Programs: the Rental Certificate Program and the Rental Voucher Program.
The DCA also administers two unit-based components of the Section 8 Housing Program: the Project-Based Certificate Program and the Moderate Rehabilitation Program. These programs offer the same benefits as the Rental Certificate Program except that the subsidy is linked to the building rather than the household. Applicants of the unit-based programs are assisted if they meet the eligibility requirements and reside in or wish to reside in housing which has been rehabilitated through the program. If a participant moves out of an assisted unit, the household will no longer receive housing assistance. As units become available, applicants included on the unit-based waiting list will be referred to rehabilitated units of the appropriate size. The property owner is solely responsible for tenant selection.
Plain Language Review Act N.J.S.A. 56:12-1 to 56:12-13: requires leases for real property to be written in a simple, clear, understandable and easily readable way. This means that the lease must be written so that the average person can understand it. Parties to a lease must be at least 18 years of age and mentally competent. A written lease does not take effect until it is signed by the landlord.
Term of Lease and Lease Renewal Rent, Late Charges, Costs and Attorneys’ fees ◦ Additional Rent Security Deposit Use of Premises Utilities and Services Tenant’s Maintenance and Repairs
Insurance, Destruction by Fire or Casualty and Condemnation Alterations and Repairs Landlord’s Right of Entry and Set of Keys Assignment and Subletting Liability of Landlord and Tenant Rules and Regulations/Conduct of Tenant Tenant’s Default and Landlord’s Remedies
Important for a Landlord to use a written, detailed rental application, and for residential property, to have a written rental policy. Discrimination based upon race, sex, color, creed, religion, national origin, ancestry, marital status, or physical or mental handicap is prohibited. Income is a permissible criteria. Uniform application of rental criteria is essential.
N.J.S.A. 46:8-43 through 46:8-50: ◦ The Act requires NJDCA to prepare, distribute, and update annually a statement in English and in Spanish of the established rights and responsibilities of residential tenants and landlord. ◦ The Act calls for distribution of the statement to all tenants with a rental term of at least one month living in residences with more than two dwelling units (or more than three if the landlord occupies one.) ◦ A landlord is required to give a copy of the current statement to each tenant when a lease is entered into, and to make available the current statement in the building where tenants can easily find it. ◦ The Truth in Renting Statement is available on the web at: www.nj.gov/dca/divisions/codes/offices/landlord_tenant.html .
Landlords that use consumer reports to evaluate rental applications must comply with the FCRA. FCRA protects applicant’s privacy and ensures that the information supplied by consumer reporting agencies is as accurate as possible. To be covered by the FCRA, a report must be prepared by a consumer reporting agency, such as a credit bureau or tenant-screening agencies. Also, if personal, employment, and previous landlord references are verified by an agency (and not directly by the landlord), FCRA does apply. A landlord is allowed to charge a prospective tenant for the cost of the report, and a landlord may also request reasonable rental application fees.
Discrimination in renting is illegal ◦ Fair Housing Laws ◦ Various State and federal laws: It is illegal for a landlord or rental agency to refuse to rent to a tenant because of race, religion, color, national origin, ancestry, marital status, sex, sexual orientation, or physical or mental handicap. ◦ N.J.S.A. 10:5-12(g): It is illegal for a landlord or rental agency to refuse to rent to a person because the person has a Section 8 voucher or another type of housing assistance, and/or if a tenant will pay rent with other sources of income, such as welfare, alimony, or child support. ◦ State and federal laws make it illegal for a landlord or rental agency to refuse to rent to families with children, with some exceptions.
A landlord cannot refuse to make reasonable changes to an apartment that will make it easier for a disabled person to live there. The landlord must let a disabled tenant provide handrails, ramps, or any other special equipment; however, the cost of the changes can be passed on to the disabled tenant (except that in subsidized housing, a landlord may have to pay for the accommodations.) N.J.S.A. 46:8-9.2 permits a tenant with a disability to terminate a lease because the apartment or home is not “handicapped accessible,” and upon request, the landlord is either unwilling or unable to make the unit accessible.
Residential: Security Deposit Law N.J.S.A. 46:8-19 et seq. ◦ Applies to most residential rental properties, including mobile homes. The exception is an owner-occupied 2 or 3 family dwelling, unless the tenant makes the required request to landlord to fulfill the requirements of the SDL. ◦ A security deposit cannot be more than one and one- half times one month’s rent. ◦ Security Deposit continues to be the property of the tenant and it must be held in trust by the landlord.
DEPOSIT OR INVESTMENT OF SECURITY DEPOSITB. Landlords receiving security deposits for 10 or more rental units shall invest or deposit security deposits in an insured money market fund established by an investment company based in New Jersey, or in an account that bears a variable rate of interest, at a State of federally chartered bank, savings bank or savings and loan association insured by the federal government and located in New Jersey.B. Landlords subject to this law, receiving security deposits for less than 10 rental units shall deposit money in a State or federally chartered banking institution, in this State insured by the federal government in an account that bears interest at the current rate.
Other requirements: ◦ The interest or earnings paid on the security deposit belongs to the tenant and shall be paid to the tenant in cash or credited toward rent due and owing on: Either the renewal or anniversary of the lease, or on January 31, if the tenant has been notified by landlord that the interest payments will be paid on January 31 of each year. ◦ A person receiving a security deposit may not combine the security deposit with his or her own funds. ◦ Within 30 days of receiving a security deposit, the tenant must be notified of the name and address of the banking institution or investment company, the amount of the deposit, type of account and current rate of interest for the account. ◦ Within 30 days after the end of a tenancy, landlord must return the security deposit, plus interest earned less deductions, to the tenant.
Personal Guarantees by parents, family members and qualified friends - only as good as the person giving it; thus, requires proper screening too. Commercial leases: Anything goes. ◦ No requirement to segregate security deposit; can commingle funds ◦ No requirement to pay or credit interest ◦ Can exceed one and one-half monthly rental ◦ Can require letters of credit, cash etc…
Late Fee v. Penalty ◦ Enforceable stipulated damages clauses are referred to as “liquidated damages,” while unenforceable provisions are labeled “penalties” ◦ MetLife Capital Financial Corp. v. Washington Avenue Associates L.P., 159 N.J. 484 (1999) Test of validity of late fees and default charges is whether the provisions are reasonable under the totality of the circumstances. If not, the provisions are treated as penalties. In commercial contracts between sophisticated parties, the provisions are presumptively reasonable and party challenging bears the burden of proving its unreasonableness.
In leases, residential and commercial, late fees, default interest, costs of suit and reasonable attorneys’ fees must be expressed as “Additional Rent.” Several Court decisions have held that a late fee should not be punitive and must reflect the actual “administrative expense” that the party incurs in processing the late payment. Generally, NJ Courts have determined that five (5%) percent is reasonable and enforceable.
Tenants who live in public housing or in other subsidized buildings may be entitled to certain notice and procedural rights over what is required by State law. ◦ Public Housing Notice Requirements: Before a housing authority can terminate lease for non-payment of rent, the housing authority must give a 14-day notice. Termination for other causes, must be given 30-days’ notice, unless State law allows for a shorter notice. For causes relating to criminal activity, threats, or having a felony conviction, housing authority must give reasonable notice of up to 30 days, depending on how serious the situation is. Some causes may require the housing authority to give an opportunity for a grievance hearing.
Subsidized Housing Notice Requirements: ◦ For buildings receiving a subsidy and have a private landlord (not a housing authority, and not a Section 8 voucher), tenants must be given a notice that states: date tenancy will be terminated; Detailed reasons for termination; Advises tenant that he/she has 10 days to discuss proposed termination with the landlord; and Advises tenant that if tenant does not leave, landlord may file suit to evict, at which time tenant may present a defense. In certain cases, tenants may be entitled to a 30-day notice of termination of tenancy. The above rights to notice should be written in the lease. Unless proper notice is given, tenant cannot be evicted.
Section 8 Voucher Notice Requirements: ◦ A Section 8 voucher tenant is not entitled to any notices over and above what tenant is required to received under State law. ◦ A Section 8 voucher tenant must give the public housing authority a copy of any eviction notice that he/ she receives from a landlord. 24 C.F.R. § 982.551(g). ◦ Also, the landlord of a Section 8 voucher tenant must give the public housing authority a copy of any eviction notice served on a tenant. 24 C.F.R. § 982.310(e)(2)(ii).
Mobile home owners are protected from eviction under the Anti-Eviction Act. Court decisions have also established that other landlord-tenant laws, covering security deposits, receivership, truth in lending, landlord identity, discrimination against children, self- help eviction, distraint, and reprisal (getting even), apply to mobile home owners.
N.J.S.A. 46:8C-2 through 46:8C-21: ◦ Requires park owners to give at least a one-year written lease to all renters of space within a month after they move in. ◦ This is the only form of residential tenancy in New Jersey where a written lease for a particular period of time is required. ◦ Other protections under Mobile Home Act include: Limitations on moving and selling mobile homes Disclosure of fees Rent increases and maintenance
Landlords and Tenants can “go green” by making renovations and changes to incorporate such things as: ◦ New, energy efficient appliances ◦ Using compact fluorescent light bulbs (CFLs) and use of timers for lights ◦ Installing dual-flush toilets to conserve water ◦ Installing new showerheads that conserve water ◦ Implement a building wide recycling plan ◦ Adding insulation