Establishment of annual rent increases for any housing space
or dwelling unit subject to the provisions of this chapter shall be
determined in accordance with and pursuant to the following procedures:
A. At the expiration of a lease or the termination of a periodic tenancy,
no landlord may demand, receive or collect a percentage increase in
rent for any housing space which is greater than the percentage increase
established by the Rent Control Board in September of each year for
the next calendar year. The Board shall establish the standard rent
increase by averaging the increases in the consumer price index (CPI)
for urban wage earner and clerical workers as supplied by the United
States Department of Labor for the Philadelphia/New Jersey geographical
region for a twelve-month period beginning in July of the previous
year and ending June of the year in which the Board is making its
determination. No such annual rent increase shall exceed 4%.
B. Every application for an annual rent increase submitted in accordance
with this chapter shall be approved or denied by the Board at a public
hearing thereon. The Board shall not have jurisdiction to consider
an application for an annual rent increase, and same shall not be
scheduled for hearing before the Board, unless the following procedures
have been met:
[Amended 8-27-2013 by Ord. No. 1313]
(1) At least 60 days prior to the date of the proposed annual rent increase,
the landlord shall submit a written application to the Rent Control
Board Secretary and shall supply a copy of same to every tenant effected
by the proposed increase;
(2) The application required by this section shall set forth the unit
or units for which the annual rent increase is being sought, the date
on which the proposed rent increase would become effective and the
amount established by the Rent Control Board for the new rental period;
(3) The Rent Control Board Secretary shall review the application to
verify the calculations contained in the application and the propriety
and accuracy of the consumer price indicators used in the calculations.
If either the calculations or the consumer price indicators, or both,
used in the application under review are erroneous, the Rent Control
Board Secretary shall recalculate the allowable rent increase, if
any;
(4) The Rent Control Board Secretary shall notify the landlord, in writing,
within 15 days of the date of the receipt of the application, whether
the proposed rent increase is accurate or, if the proposed rent increase
was inaccurate, of the recalculated allowable rental increase, as
the case may be; and
(5) The Rent Control Board Secretary also shall verify that any landlord seeking an annual rent increase is in compliance with all other provisions of this chapter, including but not limited to the requirements set forth in Article
IV, Landlord Requirements. No annual rent increase shall be approved by the Rent Control Board unless the Board determines, upon a report and/or testimony of the Rent Control Secretary and/or Rent Control Officer, that the landlord is in compliance with all other provisions of this chapter.
C. Except for hardship increases and capital improvement increases authorized in accordance with this chapter, any rental increase imposed, demanded, received or collected at a time other than at the expiration of a lease or termination of a periodic tenancy shall be void. Any rent increase in excess of that authorized by the provisions of this chapter shall be void. No landlord shall increase the rent to any tenant more than once in any twelve-month period, except in the case of landlord hardship increases pursuant to §
189-10.
D. The landlord shall remain in substantial compliance with the Regulations for Maintenance of Hotels and Multiple Dwellings (Chapter 10 of Title 5 of the New Jersey Administrative Code) and shall so certify. In the event that the landlord is not in substantial compliance with that regulation or this chapter, or has not maintained the dwelling in accordance with the filed schedule of maintenance required by §
189-15, no increase in rents shall be permitted under this or any other section of this chapter.
E. Any rental increase granted hereunder shall go into effect in the
first month following final disposition of the application for same.
The effective date of an increase granted hereunder shall in no way
alter the regular date of the annual increase for any tenant affected
thereby, even if the effective date is different than the tenant's
regular annual increase date. Notwithstanding the above, the Board,
in its sole discretion and for good cause shown, may approve a rent
increase application to be effective on the date requested by the
landlord or such other date as the Board deems appropriate. In no
event, however, shall the Board approve an increase for a period of
time more than three months after the meeting of the Board at which
an application for annual rent increase is considered. For instance,
at a January meeting, the Board may not approve increases for any
month after April of that year.
[Amended 8-27-2013 by Ord. No. 1313]
F. In any
instance where a landlord’s compliance with this section has
been raised as an issue before and/or by the Board, the burden of
proof shall rest with the landlord to demonstrate, to the Board’s
satisfaction, in its sole discretion, that rent increases have not
been illegally collected in violation of the provisions of this chapter.
[Added 8-27-2013 by Ord.
No. 1313]
Whenever, during the existence of a housing state of emergency,
a landlord shall determine that reasonable and necessary operating
expenses (computed in accordance with the provisions of this chapter)
are greater than 60% of the gross maximized annual income of a housing
space or dwelling unit in common ownership and operation by the same
landlord, then such landlord may make application to the Board for
an increase in rent on account of hardship.
A. Hardship application.
(1) The landlord shall file a hardship application with the Board as
provided in this section, together with all certifications required
herein, including a certification by the landlord and/or his agent
to demonstrate that the landlord is entitled to an increase in rents
based on hardship.
(2) The application shall include the amount of increase and percentage
of increase requested, together with all necessary information and
documentation to support the request for a hardship increase, including
but not limited to:
(a)
Documentation showing at least three years of income and expenses;
(b)
Three years of federal and state income tax returns;
(c)
Certified financial statements of the landlord; and
(d)
Such other books, records and reports as the Board shall request
in order to properly consider the application.
(3) At the time the landlord files a hardship application in accordance
with this section, the landlord simultaneously shall notify, in writing,
all tenants affected by the hardship application that such application
has been filed and is available to any tenant requesting the same.
(4) A landlord's application filed pursuant to the requirements of this chapter shall be accompanied by an application fee as provided in Chapter
111, Fees.
(5) Escrow deposit.
(a)
A hardship application filed pursuant to this chapter shall
be accompanied by an escrow deposit computed by multiplying the number
of proposed affected housing spaces by $5 per housing space, but in
no event shall the escrow deposit be less than $1,000;
(b)
The total escrow deposit collected pursuant to Subsection
A(5)(a) above shall be placed in an escrow account by the Township Clerk, to be applied to the payment of any services rendered by an accountant, auditor, real estate appraiser or other professional retained by the Board pursuant to the provisions of this chapter to aid or assist in the Board's review and consideration of a hardship application submitted pursuant to this section; and
(c)
The balance, if any, of the amount deposited in the escrow account
after payment to such persons shall be returned to the party depositing
the money in escrow upon final decision of the Board.
B. Landlord certification. In any application for an increase of rent
on the basis of hardship, the landlord shall specifically certify
that:
(1) The dwelling and all housing space or dwelling units therein are
in a safe and sanitary condition and in substantial compliance with
all local and state health and building codes. By way of verification
as to compliance with the aforesaid codes, the applicant shall, within
30 days of the date of filing of any application for relief pursuant
to this section, submit a report of inspection conducted by the Rent
Control Officer. The aforesaid report of the Rent Control Officer
shall set forth either that the dwelling or dwelling units are in
substantial compliance with the Regulations for the Maintenance of
Hotels and Multiple Dwellings or shall set forth the circumstances
and regulatory provisions serving as the basis for noncompliance with
the aforesaid regulations;
(2) The landlord is in substantial compliance with all state and local
laws pertaining to tenant's rights; and
(3) All rentals collected and charges imposed, including those arising
out of any nonresidential use, result from arm's-length transactions.
C. Compliance by landlord. If, at any time during the course of consideration of an application for an increase in rent due to hardship pursuant to the provisions of this section, the Board shall determine that the landlord is not in substantial compliance with any or all of the above, the Board may temporarily withhold further consideration of the application for a hardship increase until such time as the landlord has corrected any such deficiency. The time period for the Board to make a decision as set forth in Subsection
F below will be extended if the Board makes a determination that the landlord is not in substantial compliance with the above provisions.
D. Gross maximized annual income. In computing gross maximized annual
income under this chapter, the following limitations shall apply in
all cases:
(1) Income and expenses arising out of a nonresidential use, including
that for professional or commercial space, shall result from arm's-length
transactions; and
(2) No loss caused by a nonresidential use may be considered.
E. Reasonable and necessary operating expenses. In computing reasonable
and necessary operating expenses under this chapter, the following
limitations shall apply in all cases:
(1) Property taxes shall be limited to amounts actually paid, including
those in escrow for appeal;
(2) Repairs and maintenance shall be reasonable and necessary;
(3) Legal and auditing expenses shall be limited to reasonable and necessary
costs of the operation of the property and shall be itemized on the
application; provided, however, that no legal expenses or auditing
expenses shall be allowed as a deduction which do not directly result
from the landlord-tenant relationship;
(4) Management fees shall be limited to actual services performed in
the rental of residential housing space and shall not exceed 6% of
gross maximized annual income;
(5) Salaries not included in management fees shall be limited to actual
services performed and amounts for similar positions in the area,
including rental value, if included in income and expenses and wages
and benefits paid;
(6) Advertising expenses shall be limited to actual costs that are reasonable
to ensure occupancy and personnel employment needs of the landlord;
(7) Utilities, including but not limited to gas, electric, water and
oil, shall derive from arm's-length transactions, and the landlord
shall demonstrate that all reasonable efforts to conserve energy and
fuels have been used;
(8) Insurance shall be prorated over the duration of any insurance policies
and shall not include the landlord's life, medical or other personal
policies;
(9) No penalties or fines of any kind, nor interest on such penalties
and fines, shall be allowed;
(10)
No allowance shall be made for debt service (principal and/or interest) in the computation of operating expenses, except that as permitted by §
189-11F.
F. Public hearing; time of decision.
(1) The Board shall hold a public hearing within 45 days of receipt of
a completed hardship application, or 30 days in the event of federal-
or state-involved housing.
(2) The Rent Control Board Secretary shall notify the landlord of the
date of public hearing at least 14 days before the date set by the
Board. At least 10 days before the hearing date, the landlord shall
provide, in writing, notice of said hearing to all tenants affected
by the hardship application.
(3) If, due to no fault of the landlord, the Board cannot hear the application
within 45 days and reach a determination 30 days thereafter, the landlord
shall be entitled, upon notice to the tenants affected, to collect
the amount requested, provided that the amount does not exceed 10%
above the current rent. If the amount exceeds 10% above the current
rent, the landlord shall be limited to only 10% until the determination
has been reached by the Board; provided, however, that the Board may
proceed to stay the increase by resolution if, in fact, the delay
has been contributed to or caused by the conduct of the landlord or
if the landlord agrees to such stay.
(4) Any increase paid by the tenant pursuant to Subsection
F(3) above shall be paid without prejudice, and if the Board determines that a lesser amount of increase or no increase should be allowed, the tenant paying the increase shall be permitted to an immediate deduction or offset against rents becoming due and owing equal to all excess rents paid after written notice to the landlord of the amount involved.
(5) If, after a full hearing, the Board shall determine that the landlord
is in full compliance with the provisions of this chapter, it shall
permit a rental increase sufficient to establish the sixty-percent
relation of fair net operating income, and any increase granted under
a fair net operating income formula shall be prorated to all of the
units of housing space within the dwelling based upon the number of
rooms per unit or unit space.
G. General limitations.
(1) A hardship increase shall be for a period not less than one year;
(2) A hardship increase shall be paid in equal monthly payments for the
term approved by the Board and shall be payable on the same date as
the payment of the rental charge;
(3) No more than one hardship increase shall be granted in any one twelve-month
period, except in demonstrated extraordinary circumstances beyond
the landlord's control occurring subsequent to an approved hardship
increase;
(4) No hardship increase shall be granted for any housing space if the
dwelling or any part thereof shall be subject to violations issued
by any government agency prior to the filing of the application seeking
the increase; provided, however, that the Board may waive this provision
upon a showing by the landlord that the landlord has attempted to
rectify the violation but has been unable to do so due to conditions
beyond his reasonable control; and
(5) A hardship increase shall not be considered rent for purposes of computing rent or rent increases under §
189-8 or
189-9 nor for the computation of rental security deposits.