The City Administrator, or his or her designee, is hereby designated to accept all hardship applications filed by a landlord as set forth under this Article. A landlord who is unable to meet his mortgage payments, expenses and maintenance costs or is operating at a loss shall be entitled to apply for a hardship increase to the City Administrator, or his or her designee. The City Administrator, or his or her designee, shall supply forms for this purpose and require the landlord to notify the tenants of the pendency of this hardship increase application. The Rent Control Board shall hear this matter and make a decision within 45 days of hearing unless they notify all parties in writing of the need for additional time to render decision, otherwise the increase will be deemed approved.
At the time of application, the landlord shall notify each tenant in writing by certified mail or personal service, post a copy of the application in each building affected, and supply the City Administrator, or his or her designee with three copies.
[Amended 10-20-2025 by Ord. No. 14-2025]
The applicant shall, at the time of filing an application under this article, enclose with the application the fee determined by the following schedule. The fee shall be payable to the City of Pleasantville:
The Rent Control Board shall make the determination for all hardship applications.
A.
In determining any hardship application, the Rent Control Board shall consider financial factors which are to be submitted by the landlord. The landlord shall submit a profit and loss statement reflecting information for three years prior to the year of the application. Including but not limited to three years of independent certified financial statements shall be provided along with proof of being current on any and all taxes, debts and financial obligations. A landlord seeking an increase in rent shall provide a minimum of financial factors as indicated on a standardized form provided by the City Clerk as well as any other information pertinent as required under this chapter.
B.
The services of a financial consultant shall be provided for to assist the Rent Control Board in evaluating complicated accounting information. The financial consulting fees shall be funded through an escrow account required of landlords making hardship appeals. The escrow shall be no more than $500 for a landlord of more than 100 rental units and $250 for landlords of less than 50 units. Any of the escrow funds not required for consulting fees shall be refunded to the landlord at the end of the rent control board's consideration of the hardship increase request.
C.
Hardship appeals will be based on a Fair Rate of Return formula which allows, with just cause, for the maintenance of a Dollar Net Operating Income (NOI) with a cost-of-living increase on that portion of the NOI which is the profit. Only valid cause for the loss of return of NOI shall be permitted as the basis for a hardship application hereunder. The formula to determine NOI starts with calculating a property's effective gross rental income, as well as any and all fees received (pet fees, laundry fees, or any other fee passed along to the tenant), and subtracting the direct operating expenses, such as maintenance costs, repair fees, property management costs, utilities, and property taxes. The NOI calculation is not to include debt services payments, interest expense, capital expenditures depreciation, reserve for replacements and income taxes.
D.
The landlord shall be required to send notice by certified mail or hand delivered to each tenant affected by the application, at least 10 days prior to the date scheduled for the hearing before the rent control board on the hardship application. In addition, the landlord shall publish notice of the hardship hearing one time at least 10 days prior to the hearing in a newspaper of general circulation within the City. Following the Rent Control Board's decision, the landlord by certified mail or hand delivery shall advise each of the tenants as to the outcome of the hardship increase hearing within 10 days of the date of the Rent Control Board's determination. Additionally, the landlord shall publish notice of the Rent Control Board's decision in a newspaper of general circulation within the City within 10 days of the Rent Control Board's determination. The Rent Control Board shall make a decision on any application within 45 days from the conclusion of the Board's hearing of the application.
E.
In applying the NOI determination referenced hereinabove, the Rent Control Board shall consider:
(1)
The additional debt requirements attributable to necessary refinancing will be permitted only at the expiration of the original term of the landlord's mortgage and if the Rent Control Board determines that the mortgage payments result from refinancing terms which are commercially reasonable under the circumstances.
(2)
In determining the NOI, applying the cost of refinancing of the original mortgage, the Rent Control Board shall not consider the refinancing of junior mortgages.
(3)
In a circumstance where a new apartment owner is in a negative cash flow position, the criteria to be used by the Rent Control Board is whether the mortgage payments resulted from a capitalization debt to equity ratio that is commercially reasonable and is reasonably related to the acquisition of the apartment for rental purposes.
In determining whether a landlord is entitled to a hardship increase, the City Administrator, or his or her designee, shall consider the landlord's ability to meet expenses and a fair and reasonable return on his/her property. A landlord shall be eligible for consideration for a hardship increase if:
A.
They have been the owner of the building for a twelve-month period preceding the filing of such application. Certified public accountants' records must be submitted with said application, and the Board may consider all reasonable factors as to the prudence of said investment in determining whether or not a hardship shall be granted;
B.
They can demonstrate that the building is in substantial compliance with all relevant property and maintenance provisions in this chapter;
C.
The following factors shall be considered in determining the fairness and reasonableness of the landlord's rate of return:
(1)
Taxes;
(2)
Costs of efficient maintenance and operation of the property;
(3)
The kind, quality, quantity and efficiency off the services being rendered;
(4)
The number and frequency of prior hardship and capital improvement increases for the building;
(5)
The reasonableness of expenses incurred by the landlord expended for capital improvements;
(6)
Present tax and tax appeal status; and
(7)
Discretion of hearing officers may be considered.
Upon scheduling of hearings, the City Administrator, or his or he designee, shall give notice of the same to each affected tenant, five days prior thereto. All documentation submitted shall be open to inspection by affected tenants or their legal representatives. Any such notice delivered to the tenant shall include a statement that all such documentation is available for inspection at the office of the City Clerk. Requests for the appearance of any real estate appraiser, either by the landlord or the affected tenant, shall be made, in writing, two days prior to the hearing date to the City Administrator, or his or her designee and the parties. Failure to request the presence of said appraiser shall be deemed to have waived the right of his cross-examination by the party.