[Amended 11-12-2009 by Ord. No. 2009-37]
A.
A landlord may apply to the Rent Leveling Board (hereinafter "Board") for an increase in rent in excess of that permitted in Article II hereof upon a showing that:
B.
A tenant may file a complaint with the Board for:
(1)
Relief declaring a rental increase void on grounds that it exceeds
the maximum allowable rent increase permitted under this chapter;
(3)
A rebate from the landlord for any rent paid by the tenant to the landlord from the date the complaint is filed and for six years prior to the date of filing on grounds that any rental increases exceed the maximum allowable rent increase permitted under this chapter, or services for which the landlord previously received a rental increase pursuant to § 324-28, or 324-29 have been terminated or reduced since the increase was granted. For purposes of calculation of any rebate which may be ordered pursuant hereto, that calculation shall not predate or look back past the six-year statute of limitations set forth herein; or
C.
In determining whether to grant the relief provided for under this
section, it shall be the landlord's burden to demonstrate, by
a preponderance of the evidence, that:
[Amended 11-12-2009 by Ord. No. 2009-37]
Prior to filing an application pursuant to § 324-16;
A.
A landlord-applicant shall notify the tenant by certified mail or
by personal service (provided a receipt is obtained from the tenant
or an affidavit of service is sworn to), which notice shall include,
but not be limited to, the amount of increase applied for, if possible,
and a statement that all documentation filed with the Board shall
be available for inspection at the office of the Board.
B.
A tenant-applicant shall notify the landlord by certified mail or by personal service (provided a receipt is obtained from the landlord or an affidavit of service is sworn to) of his or her intent to file an application pursuant to § 324-16 and, generally, the reasons(s) the tenant is seeking a reduction and/or rebate.
C.
Proof of notice shall be filed along with any application to the
Board. No application will be acted upon unless such proof is provided.
[Amended 11-12-2009 by Ord. No. 2009-37]
A.
Immediately upon receipt of an application and proof of notice, the
Board shall notify the tenant(s) and landlord of the scheduled hearing
date.
B.
If the subject of the application is an increase pursuant to § 324-16A(1), the landlord, upon receipt of the hearing date, shall post notice thereof in conspicuous locations within the premises, including but not limited to mail rooms, lobbies, elevators and laundry rooms.
[Amended 11-12-2009 by Ord. No. 2009-37]
A.
For purposes of § 324-16A(1), the year of application shall be the calendar or fiscal year immediately succeeding the calendar or fiscal year last utilized by the landlord in maintaining his books and records, and it shall be the period of operation upon which the Board shall base its determination.
B.
Except as provided below, no increase in rent may be collected by
a landlord and no decrease in rent may be withheld by a tenant, where
such increase or decrease, as the case may be, is the subject of an
application, until granted by the Board. The Board shall not unreasonably
delay the rendering of its determination of any application.
C.
For purposes of § 324-16A(1), in the event the Board does not render a determination within four months of the filing of the landlord's application, 1/2 of the increased rentals sought shall, at the discretion of the landlord, be collected in accordance with this chapter and shall be subject to retroactive adjustment by the Board upon its determination. Such four-month period may be extended by written consent of the landlord. In the event the Board concludes that its delay in rendering a decision is caused by the landlord, the landlord shall be prohibited from commencing any collection of increased rentals sought until the Board renders its determination.
A landlord shall be entitled to an increase
in rent under this section if said landlord is being deprived of earning
a fair and reasonable return on his actual investment.
A.
The Board shall make a determination regarding the
landlord's investment in the subject premises and a fair return thereon.
In computing the income necessary to achieve a fair return, the Board
shall allow reasonable operating expenses, considering their useful
life and debt service.
(1)
The "useful life of an expense item" shall be defined
as that number of years reasonably expected to pass before that same
expense will again be incurred. The past history of the building,
where applicable, shall be used as a guideline in determining useful
life. Where the useful life of an expense item exceeds one year, such
expense shall be prorated over the entire useful life of the expense
item. When relief has been granted for an expense item having a useful
life in excess of one year, and having a cost equal to a greater than
1% of the then-current roll, such increase shall be treated as a surcharge
on the tenant's rent only for the period of the useful life of the
expense item and shall thereafter terminate unless the same expense
recurs. The surcharge shall not be part of the base rent. At the time
of such recurrence, the newly calculated prorated expense may be added
to the rent as a new surcharge as determined by the Rent Leveling
Board over its then determined useful life.
(2)
Debt service shall include interest, principal reduction
and mortgage insurance premium, where applicable. In the event there
has been a refinancing of prior mortgages, the Board shall review
actual disposition of the proceeds of the refinancing as a part of
its determination of investment and debt service. Depreciation is
specifically excluded as an allowable expense. Real estate tax increases
directly attributable to conversions of premises to a condominium
or cooperative are specifically excluded as an allowable expense.
The "landlord's investment" is hereby defined as the original cash
investment at the time of purchase, less any withdrawals at the time
of refinancing or at any other time. No inflation factor may be applied
to such investment.
B.
The Board shall use actual expenses for the period
of relief insofar as it is known at the time of the filing of the
application for relief. Where such actual costs are unknown, the Board
shall project said unknown costs in accordance with the following
formula:
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The actual costs for the calendar or fiscal
year of the landlord prior to the date of filing of the application
for relief shall be multiplied by the Percentage Inflation Factor
(PIF) which shall yield the allowable operating expense. The "PIF"
is defined as the percentage change of the New York/Northeastern New
Jersey Consumer Price Index available for the latest 12 consecutive
months available at the time of filing of the application for relief.
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C.
As a part of the application for relief, a landlord
shall submit to the Board its anticipated income for the period of
relief, considering all automatic increases to base rent that may
come due during said period. Anticipated income shall include, but
not be limited to, income from residential rents, garage rents, additional
facilities and laundry and vending commissions.
D.
The Board shall deny all or a part of the relief requested
where specific findings of fact support the conclusion that the landlord
purchased the subject premises for an excessive price. Excessive purchase
price is hereby defined as the purchase price such that at the time
of purchase a reasonable investor could not expect to earn a fair
return upon his investment.
E.
The relief granted shall increase the actual income
yielded by the subject premises to that income necessary to enable
the landlord to earn a fair return upon his actual investment.
F.
Wherever practicable, the Board shall require of the
applicant professionally certified documentation of all pertinent
financial data offered in support of an application under this section,
except that the Board may exercise its reasonable discretion to waive
this requirement if the cost to the applicant is deemed to outweigh
the need for professional certification.
G.
On all applications subsequent to a conversion, the
Board shall singularly analyze each item of alleged increased expenses
and disregard and disallow any items attributable to said conversion.
H.
Any increase granted under this section shall be in lieu of and not in addition to any increase granted under Article II.
I.
No increase granted pursuant to this section shall
take effect until the Borough's construction official or designated
representative, after a reasonable inspection of the premises, notifies
the Board in writing that said premises is in substantial compliance
with the Borough's maintenance code and State Uniform Construction
Code.
J.
No increase granted pursuant to this section shall
take effect until the Borough's Tax Collector notifies the Board in
writing that all property taxes are current, except for arrearages
authorized by law, and any tax rebates due have been paid.
Notwithstanding anything to the contrary herein, no landlord shall be entitled to a percentage increase greater than that permitted under Article II hereof unless the average expense ratio of the landlord for the three years preceding the year immediately preceding the year of application is less than the expense ratio for the year immediately preceding the year of application. The expense ratio means reasonable and necessary operating expenses, as defined in § 324-20 hereof, divided by total income.
A.
As soon as available, but not later than six months
from the date of the filing of an application for increased rental,
the landlord shall file with the Board a statement of operations setting
forth its actual costs for the first six months of the year of application.
B.
In the event the landlord provides the Board with
its actual cost expense reflecting the first six months of the year
of application, the Board may dispense with the review as provided
for in this section.
C.
The Board shall review the statement of operations,
may hold public hearings and/or require the filing of additional data.
Within two months of receipt of the statement of operations, the Board
shall make such adjustments to the relief granted as is manifested
by the actual six-month cost experience. The Board is not required
to make any adjustments in the relief in the event that the actual
six-month cost experience does not significantly differ from the reasonable
and necessary operating expenses as determined by the Board heretofore.
In the event the Board shall fail to make an adjustment within the
two-month period, the original relief granted shall become final.
In the event the landlord shall fail to file the statement of operations
within the six-month period, the relief granted shall automatically
terminate and base rent shall revert to the base rents in effect prior
to the date of application. For good cause shown, the Board may extend
the six-month filing period for an additional period not to exceed
three months. Simultaneously with the filing of the statement of operations,
the landlord shall notify the affected tenants of the filing. Notwithstanding
anything contained in this section, the initial determination of the
Board shall be deemed final for purposes of appeal.
The Board shall not grant an increased rental
to a landlord upon more than one application for any one year.
[Amended 11-12-2009 by Ord. No. 2009-37]
From time to time, the Board may promulgate
forms to be utilized whenever notice is required and may adopt such
rules and regulations as are necessary to implement the intent of
this article.
A.
Upon submission of an application, and in addition to any fees established in § 324-37 hereof, the applicant shall be required to establish an escrow account with the Borough.
B.
Upon receipt of an application for relief, the Board
shall forthwith send a copy thereof to any professional experts retained
to assist the Board in the processing of the application. Within five
days of receipt, the professional experts shall submit to the Board
an estimate of funds sufficient in amount to undertake the professional
services to be rendered.
C.
The applicant shall forthwith deposit such funds in
the escrow account maintained by the Tax Collector of the Borough.
The professional experts shall submit vouchers for all reasonable
and necessary fees for the professional services rendered, which fees
shall be paid from the escrow account in the manner prescribed by
N.J.S.A. 40A:5-16 through 40A:5-18.
D.
The professional expert shall, at the time of submission
of any such voucher, forward a copy of same to the applicant. In the
event that the applicant questions the reasonableness of any such
voucher, the applicant shall, not later than five days after receipt
of a copy of the voucher, make written protest of such voucher to
the Board. In no event shall the Board authorize the payment of any
voucher submitted pursuant to this section sooner than 10 days from
its submission.
E.
Any of the aforesaid moneys left in the escrow account
upon completion of the application shall be returned to the applicant
as soon as is practicably possible.
F.
Should additional funds be required after the original
funds are exhausted, such funds shall be necessary, in the judgment
of the Board, shall be paid by the applicant to the Tax Collector
of the Borough and placed in the escrow account.
G.
The Board shall take no formal action on any application
unless and until all escrow funds have been deposited with the Tax
Collector of the Borough and any time limitations set forth in this
chapter shall be extended until all such escrow funds are deposited
with the Tax Collector.
No relief shall be effective as to any new or renewal tenancy relationship entered into after the effective date of this chapter unless the landlord, as part of a lease, has provided written and conspicuous notice of the pendency or possibility of any application for relief and for the six-month review provided for in § 324-22 hereof, which notice shall be separately signed by the tenant. In the event of an oral lease, the landlord, at the time of the creation or renewal of the tenancy relationship, shall provide written actual notice of the aforesaid.
Where a lease is due to expire within 60 days from the granting of any relief by the Board pursuant to § 324-20, the tenant shall have the right to remain in possession, without renewing the lease for a period not to exceed 90 days following the date of receipt of the Board's determination. The tenant shall pay the increased rentals granted by the Board until the premises are vacated.
