[HISTORY: Adopted by the Municipal Council of the City of Clifton 10-1-1974 by Ord. No. 4249-74 (Chapter 25A of the Revised Ordinances of the City of Clifton, New Jersey, 1960); amended in its entirety 7-2-1991 by Ord. No. 5511-91. Subsequent amendments noted where applicable.]
[Amended 2-1-2011 by Ord. No. 6926-11]
As used in this chapter, the following terms shall have the meanings indicated:
- BASE RENT
- The lawful rent in full force and effect for any multiple dwelling unit space on July 1, 1974, or the lawful rent established by the landlord after a dwelling unit is deemed vacated by the existing tenant(s) in accordance with the provisions of § 363-14.
- CONSUMER PRICE INDEX
- The All Items Consumer Price Index for all Urban Consumers-Northeast
Region, less energy, published by the Bureau of Labor Statistics,
United States Department of Labor.[Amended 4-3-2012 by Ord. No. 7010-12]
- DWELLING UNIT
- Any housing space consisting of a room or rooms, suite, flat or apartment, whether furnished or unfurnished, which is occupied or intended, arranged or designed to be occupied for sleeping or dwelling purposes by one or more persons, together with all privileges, services, furnishings, furniture, equipment, facilities and improvements connected with the use or occupancy thereof. Specifically exempted from this chapter, however, is any room or combination of rooms in a motel, hotel or similar establishment renting lodgings to transients, and boardinghouses.
- MULTIPLE DWELLING UNIT
- Any building containing seven or more dwelling units (effective March 1, 2011).
[Amended 2-1-2011 by Ord. No. 6926-11]
Establishment of rent. The rent for all multiple-dwelling units shall be governed by all of the terms and provisions of this chapter, and it shall be unlawful for any landlord of any multiple-dwelling unit to demand, receive or collect any rent for the same in excess of the base rent for such dwelling unit plus any cost-of-living increase, surcharge or base rent adjustment expressly permitted by the terms and provisions of this chapter.
Applicability. Notwithstanding anything to the contrary in this chapter, any individual dwelling unit in a four-, five- or six-family multiple-dwelling unit currently subject to the terms and provisions of this chapter shall continue to be subject to the terms and conditions of this chapter until said dwelling unit is deemed vacated by the existing tenant(s) in accordance with the provisions of § 363-14.
It shall be unlawful for any landlord of a multiple-dwelling unit to demand, receive or collect any rent increase for any dwelling unit more often than once in 12 consecutive calendar months or to demand, receive or collect any rent increase in an amount in excess of that authorized by the provisions of this chapter.
In the event that a tenant claims an unauthorized rent increase by the landlord, the claim of the tenant shall be limited to a period of two years prior to the date of the claim being made by the tenant.
[Amended 2-1-2011 by Ord. No. 6926-11]
At the expiration of 12 consecutive calendar months following the effective date of the last previous rent increase for any dwelling unit subject to rent regulation under the terms of this chapter, a landlord who provides heat and/or air conditioning may demand, receive or collect an increase in rent for such unit, not to exceed 3%. A landlord who does not provide heat and/or air conditioning may demand, receive or collect an increase in rent for such unit, not to exceed 2%. The Mayor and Municipal Council shall review the maximum percentage increase annually and may adjust the rate as necessary. In establishing the maximum percentage increase, the Mayor and Municipal Council shall take into consideration, but shall not be bound by, The All Items Consumer Price Index for all Urban Consumers-Northeast Region (CPI), less energy, for the most recent twelve-month period available.
[Amended 4-3-2012 by Ord. No. 7010-12]
After July 1, 1974:
A landlord may seek a tax base rent adjustment from a tenant because of an increase in the municipal real property tax levied on the real property in which any multiple-dwelling unit is situated; provided, however, that the total amount of such municipal real property tax levied on such real property for any calendar year in which such increase occurs shall exceed 20% of the gross income of the landlord from said real property for such calendar year. No such tax base rent adjustment shall exceed the amount computed in accordance with the following provisions of this section. A landlord whose real property shall qualify for the tax base rent adjustment provided for herein shall subtract from the total municipal real property tax levied on such real property for the calendar year in which such increase occurs the total amount of the tax levied thereon for the preceding calendar year. The difference shall be divided by the total number of square feet contained in all of the dwelling units in the multiple dwelling. The quotient thus produced shall be the tax increase per square foot. It shall be unlawful for any landlord to require a tenant to pay a tax base rent adjustment in excess of the product realized by multiplying the number of square feet contained in the dwelling unit occupied by the tenant by the tax increase per square foot.
The total dollar amount of the tax base rent adjustment for which any tenant may be liable under the foregoing terms shall be divided by 12, and the quotient shall be the tax base rent adjustment, which shall be added to and become a part of the base rent for the dwelling unit affected.
Any landlord whose real property shall qualify for the tax base rent adjustment herein provided for and who shall seek such adjustment pursuant to the provisions of this section shall notify all of the tenants affected thereby in writing. Such notice shall set forth all of the calculations utilized in computing the tax base rent adjustment, including the amount of the municipal real property tax levied on the real property in question for the calendar year in which such tax increase occurs, the total amount of the tax levied thereon for the preceding calendar year, the total number of square feet contained in the dwelling unit occupied by the tenant and the amount of the maximum allowable tax base rent adjustment. The landlord shall also certify in said written notice that the municipal real property tax levied on the real property in question for the calendar year in which said tax increase occurred exceeded 20% of the gross income realized from such real property for such calendar year.
If an appeal is taken by the landlord from the assessment for local real property taxes levied by the municipality on a multiple dwelling and if, as a result of such appeal, taxes so levied are reduced, the landlord shall, no later than 90 days after entry of final judgment, be required to pass on to the tenants 65% of said tax reduction (computed as to each tenant in the manner stated in § 363-5 hereof). For the purposes of this section, the landlord may deduct from the total tax reduction reasonable and necessary expenses incurred in processing the tax appeal.
After the tax appeal process has been completed, the landlord shall file with the Rent Leveling Board and with the tenants a written certification of the result of such appeal, including the amount of the tax reduction, if any, and the amount claimed as the reasonable and necessary expenses incurred in processing the tax appeal. The expenses claimed shall list the names and addresses of persons and/or firms paid, the purpose of such expenses and the dollar amount paid to each person and/or firm.
As used in this section, the following terms shall have the meanings indicated:
- FAIR NET OPERATING INCOME
- Gross maximized annual income less reasonable and necessary operating expenses, such expenses not to exceed 60% of the gross maximized annual income.
- GROSS MAXIMIZED ANNUAL INCOME
- All income resulting directly or indirectly from the operation of such multiple dwelling or dwellings, including but not limited to all rent received or collectible, including any rent from a less-than-arm's-length transaction, the landlord's share of interest on security deposits, all earnings from commissions, vending machines, deductions from security deposits, late fees, pet fees, parking fees, pool fees, key charges, finder's fees, amounts received from successful tax appeals, income from rebates, tax surcharges, capital improvement surcharges, rent surcharges and hardship surcharges.
- REASONABLE AND NECESSARY OPERATING EXPENSES
- All valid expenses incurred and paid by the landlord in the operation of such multiple dwelling during the period reflected in income computed in accordance with the provisions and limitations of this section.
Application for increase.
Whenever a landlord shall determine that the reasonable and necessary operating expenses, as defined above and set forth below, of a multiple dwelling subject to rent regulation under the terms of this chapter are greater than 60% of the gross maximized annual income as defined above of such multiple dwelling, said landlord may make application to the Rent Leveling Board for a hardship rental increase.
When a landlord files an application with the Rent Leveling Board for a hardship rental increase, the Rent Leveling Board shall review the application to determine the landlord's eligibility for such hardship increase pursuant to this chapter to determine that the facts set forth in the application comply with the determination of the net operating expenses as set forth below and to modify said facts to conform to those articles of net operating expenses as discussed below.
Upon the satisfaction of the Rent Leveling Board that the landlord named in said application is eligible for a hardship rental increase and that the facts set forth in the application comply as required in Subsection B(2) above, then the Rent Leveling Board shall compute the proper gross maximized annual income by dividing the reasonable and necessary operating expenses contained in the application, as they may be modified by the Board, by 60%, said reasonable and necessary operating expenses being the numerator of the equation and 60% being the denominator. The resulting quotient shall be the new gross maximized annual income. The Rent Leveling Board shall subtract from the new gross maximized annual income the gross maximized annual income which was previously received by the landlord-applicant and which was set forth in his application to the Board. The resulting remainder shall be considered the rental increase that the landlord-applicant is entitled to. The resulting rental increase shall be prorated to all dwelling units within the multiple dwelling(s) covered by the application in the ratio that the total square feet of dwelling area contained in each such dwelling unit bears to the total square feet of the dwelling area contained in the multiple dwelling(s) covered by the application. The Rent Leveling Board shall have the discretion to divide the prorated rental increases per apartment over a period not to exceed six months so as to minimize the effect of said rental increase on the tenants of said dwelling units.
The application of the landlord for a hardship rental increase shall include the last five years of income and expenses, if available, all of which shall be duly certified under oath by the landlord or his agent and shall be supported by a statement from a certified public accountant as to the accuracy of said facts and figures. At the time of application, the landlord shall notify all tenants affected, in writing, that an application is being made and is available to any tenants requesting the same. The owner shall also make available to the tenants requesting the same and the Rent Leveling Board all records and books supporting the application. Any interested tenant, group of tenants or association of tenants wishing to be heard at the public meeting may notify the Rent Leveling Board of his or its intention, and the Rent Leveling Board shall permit the tenant, group of tenants or association of tenants to be parties to the hearing. This provision shall be liberally construed as to afford ample opportunity for all interested parties to present their views before the Rent Leveling Board.
In computing gross maximized annual income under this section, the following limitations shall apply in all cases:
No allowance shall be permitted for a vacancy, except as the same may be adequately demonstrated to be the result of market conditions and/or deteriorated physical conditions of the dwelling unit, which the landlord-applicant may show to be unavailable for rental due to said deteriorated conditions.
Income and expenses arising out of a nonresidential use, including that for professional or commercial space, shall result from arm's-length transactions.
No loss caused by a nonresidential use may be considered.
In computing reasonable and necessary operating expenses under this section, the following limitations shall apply in all cases:
Taxes shall be limited to amounts actually paid, including those in escrow for appeal, and the landlord shall further demonstrate that taxes assessed against the property were reasonable and, if not, have been appealed.
Repairs and maintenance shall be limited to arm's-length transactions and shall be reasonable and necessary so as not to cause overmaintenance of the premises. Cost of service contracts shall be prorated over the period covered. Painting costs shall be prorated over the number of years of the actual painting cycle in the building, but in no event shall painting be prorated over a period of less than three years for the interior of dwelling units or five years for the exterior and common areas.
Purchases of new equipment shall be reflected and prorated over the useful life of the item.
Legal and auditing expenses shall be limited to reasonable and necessary costs of the operation of the property. No legal expenses or audit expenses that do not directly result from the landlord-tenant relationship shall be allowed as a deduction. A landlord may not deduct expenses incurred in litigating any declaratory or injunctive relief as to his rights under any state, local or federal law, except for actions in the nature of a writ of mandamus. All costs shall be itemized on the application.
Management fees shall be limited to actual services performed, including the resident manager's salary, telephone expenses, postage, office supplies, stationery and the value of the apartment provided if included in income. In no event shall management fees exceed 5% of the first $50,000 of gross maximized income, including commercial and professional space income, 4 1/2% of the next $25,000, 4% of the next $100,000, 3 1/2 of the next one $100,000 and 3% of any amount over $275,000.
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.
Advertising shall be limited to actual costs that are reasonable to ensure occupancy only. Where waiting lists exist, advertising expenses shall not be allowed.
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.
Insurance premiums shall derive from all arm's-length transactions and shall be prorated over the terms of the policies and shall not include landlord's life, medical or other personal policies.
No penalties, fines, depreciation, interest, mortgage amortization or mortgage service fees for any reason shall be allowed.
The history of the income and expenses shall be consistent with the application or fully documented as to any changes.
A landlord may seek additional rental for any major capital improvement to or any substantial increase in the services rendered (other than those mandated by law as hereinafter described in Subsection C hereof). A major capital improvement consists of a substantial necessary change in housing accommodations, such as would materially increase the rental value in a normal market. It is different from ordinary repair, replacement and maintenance. The landlord shall notify each tenant of the total cost of the completed capital improvement, the number of years of useful life thereof as claimed by the landlord for federal income tax purposes, the average annual cost of the improvement or service, the total number of square feet contained in all of the dwelling units situated in the multiple dwelling for which such rental increase is sought, the total number of square feet occupied by the tenant and the capital improvement or service increase surcharge which the landlord is seeking from each tenant. The tenant shall not be liable for a capital improvement or service increase surcharge exceeding the same ratio to the average annual cost thereof as the number of square feet occupied by said tenant bears to the total number of square feet contained in all the dwellings in question. Any landlord seeking a surcharge shall apply for said surcharge to the Rent Leveling Board within one tax year after the completion of said capital improvement, the Board to determine if any said improvement is a capital improvement. If any such surcharge is granted, it shall not be considered rental for purposes of calculating a cost-of-living rental increase in accordance with the provisions of § 363-4 hereof. Each tenant affected by said increase shall receive not less than 30 days' notice of increase from the landlord. Commencing with the month that the capital improvement or service increase surcharge is made effective by the Rent Leveling Board, each tenant affected thereby shall commence to pay, together with his monthly rental, 1/12 of his share of such surcharge, computed in the manner hereinabove set forth, which payment shall be made for and during the useful life of the major capital improvement for so long as the landlord shall continue to furnish said substantial increase in services. However, in no event shall the share of said increase allocated to any tenant exceed 10% of his rent for the first 12 months or 15% of his rent for the second 12 months of said increase. Prior to any application to the Board for any capital improvement or service increase surcharge, a landlord shall post in the lobby of each building in which tenants may or shall be affected thereby or, if no lobby is present, then in a conspicuous place on the premises a notice of the application setting forth the basis for the application and the place and date scheduled for the hearing thereof and shall notify each tenant by ordinary mail or personal service, which notice shall include a copy of the landlord's application to the Rent Leveling Board. The notice must be posted and mailed not less than 10 days in advance of the date scheduled for the hearing of said application. The landlord shall provide the Rent Leveling Board with an affidavit of service at the time of hearing.
In addition to the procedure set forth in Subsections A and C hereof, a landlord may file a request for a capital improvement increase prior to the commencement of the construction of the proposed capital improvements. The application shall be filed in the same manner required by Subsection A. Any capital improvement increase granted hereunder shall take effect after the completion and installation thereof and after the actual cost of such improvement and the rental increase, if any, has been determined by the Rent Leveling Board.
"Mandated capital improvement," for the purpose of this chapter, shall mean an improvement decreed by the governing body or any other governmental agency. A landlord shall apply for a mandated capital improvement increase in the manner provided by Subsection A or B hereof. However, the Rent Leveling Board shall not award a mandated capital improvement increase of more than 50% of the landlord's cost for any mandated capital improvement.
[Amended 7-2-1996 by Ord. No. 5813-96; 12-6-2005 by Ord. No. 6533-05]
A Rent Leveling Board is hereby created within the City of Clifton. The Board shall consist of five members, all of whom shall be residents of the City of Clifton. One shall be a tenant who shall reside in a multiple dwelling and is hereby designated as the "tenant member"; one shall be the owner of any multiple dwelling situated in the City of Clifton and is hereby designated as the "landlord member"; and three shall be neither tenants residing in a multiple dwelling nor the owners of any multiple dwelling and are hereby designated as "public members." Two alternate members shall be appointed, one being a tenant to serve as an alternate for only the tenant member, and one being a landlord to serve as an alternate for only the landlord member. The tenant member, including the alternate, and the landlord member, including the alternate, shall not be from the same multiple dwelling. At least three members consisting of one tenant member or the alternate, one landlord member or the alternate, and one public member shall be required to constitute a quorum.
All members of the Board, including alternates, shall be appointed by the governing body for terms of office of three years, commencing on the first day of July of any year during which this chapter remains in full force and effect.
Every member, including alternates, shall continue in office until his successor shall be appointed and qualify. In the event that any vacancy occurs in the Board's membership, the governing body shall appoint a member to fill the unexpired term, such member to have the same qualifications as the member originally appointed to serve such unexpired term. The persons serving as members of the Rent Leveling Board on the effective date of this chapter shall continue in office until the expiration of their terms as hereinabove set forth.
The Rent Leveling Board is hereby granted and shall have and exercise, in addition to the other powers herein granted, all the powers necessary and appropriate to carry out and execute the purposes of this chapter, including but not limited to the following:
To issue and promulgate such rules and regulations as it deems necessary to implement the purposes of this chapter, which rules and regulations shall have the force of law until revised, repealed or amended from time to time by the Board in the exercise of its discretion, provided that copies of all such rules shall be filed with the City Clerk.
To supply information and assistance to landlords and tenants to aid them in complying with the provisions of this chapter.
To hold hearings and adjudicate applications from landlords for additional rent or rent surcharges as herein provided.
To hold hearings and adjudicate applications from tenants for reductions in rentals herein provided.
The Board shall give both landlords and tenants reasonable notice of hearings and reasonable opportunity to be heard before making any determinations.
Transcripts. In any application made under this chapter, the Rent Leveling Board may require that the applicant provide a certified shorthand reporter. If the Rent Leveling Board requires that the applicant provide a certified shorthand reporter, then the applicant shall be responsible for paying the stenographic attendance and transcription fees and shall provide the Rent Leveling Board with nine copies of the transcript.
The landlord and/or the tenant(s) may appeal the findings and determinations of the Rent Leveling Board to the Municipal Council within 20 days from the date of receipt of written determination and request a hearing thereon by the Municipal Council. The party appealing any determination shall serve on every other party in interest a copy of the notice of appeal to the Municipal Council. The filing of an appeal to the Municipal Council shall act as a stay of the determination of the Rent Leveling Board pending a determination by the Municipal Council, except that the tenant(s) involved shall pay the increase in rental, if any, as determined by the Rent Leveling Board, to an escrow agent, who shall be the Treasurer of the City of Clifton, from the date that the payment of such rental increase, if any, is to take effect until the Municipal Council makes its determination. In the event that the Municipal Council affirms the decision of the Rent Leveling Board, the funds, if any, so held in escrow, including interest, shall be turned over to the landlord within 46 days thereof. In the event that the Municipal Council reverses the decision of the Rent Leveling Board, the funds held in escrow, including interest, shall be returned to the tenant(s) within 46 days thereof. In the event that the Municipal Council modifies the rent increase, the City Treasurer shall return the escrow funds in accordance and consistent with such modification. The City Treasurer, as the escrow agent, upon receipt of any funds representing an increase in rent, shall deposit the same in a trustee interest-bearing account. In the event that the tenant(s) does not make the payment(s) required by this section, the Municipal Council shall have the power to dismiss the appeal upon application of the landlord.
During the term of this chapter, every landlord shall maintain the same standards of service and maintenance and shall provide the same furniture, furnishings and equipment in the multiple-dwelling unit covered hereby as was maintained and provided on the effective date of this chapter.
Notwithstanding anything set forth herein to the contrary, the owner of any multiple-family dwelling unit rented or offered for rent for the first time shall not be restricted in fixing the amount of the rent charged during the first or initial rental of any such space.
Any multiple-dwelling unit rented or offered for rent for the first time following a major rehabilitation of the multiple dwelling in which said unit is situated shall be deemed to be a multiple-dwelling unit rented or offered for rent for the first time.
A "major rehabilitation" means such capital improvements made to a multiple dwelling as shall be found and determined by the Rent Leveling Board to have increased such dwelling's preimprovement fair market value by at least 50%. In arriving at such determination, the Rent Leveling Board may review such evidence of capital improvement expenditures of the applicant as it deems necessary. Evidence of fair market value may be presented by the applicant, the tenants, the City Tax Assessor at the request of the Board or, in the case of multiple dwellings containing more than 15 units, an expert retained by the Board at the expense of the applicant. Prior to undertaking a major rehabilitation, notice of such intention shall be given to the tenants so that the tenants and the landlord may have an evaluation of the fair market value of the property made by the City Tax Assessor or their own independent appraiser. In determining whether a major rehabilitation has taken place, the Rent Leveling Board shall consider only those capital improvements which have been made to the dwelling during a twelve-month period.
All applicants seeking a decontrol as a result of a major rehabilitation shall provide the Board with the proposed rent increase for each rental unit affected by such application.
No annual cost-of-living increases shall be given during the years in which the increases based on major rehabilitation are being implemented.
No tenant shall be evicted from any multiple-dwelling unit for the purpose of a major rehabilitation, and the Rent Leveling Board shall have the authority to inquire if any coercion was used to remove a tenant(s) in order to do a major rehabilitation. If it is determined that coercion was used, the Board shall have the power to declare the dwelling unit(s) from which the tenant(s) has been forced out not decontrolled.
In a case where a tenant(s) remains in his apartment during a major rehabilitation and said individual apartment does not receive rehabilitation or only a part thereof, the Board shall have the authority to determine the percentage increase to be given to the landlord for the partial rehabilitation and/or for improvements in the general, public or common areas of the premises.
[Amended 2-1-2011 by Ord. No. 6926-11]
The owner or landlord of any multiple-dwelling unit subject to rent regulation under the terms of this chapter rented or offered for rent after a vacancy has occurred in any such unit shall not be restricted by the terms of this chapter in fixing the amount of the rent charged for such unit upon each letting thereof subsequent to the occurrence of such vacancy. Any subsequent increase in the rent charged or collected for such unit, however, shall be governed by all the terms and provisions of this chapter.
For purposes of the interpretation and application of this section, a vacancy in any such unit shall be deemed to have occurred only if said unit has become vacant and unoccupied because the tenant(s) occupying the same has died or has voluntarily surrendered possession and moved therefrom or has been lawfully evicted and removed from the unit.
An owner or landlord renting or offering for rent a dwelling unit for the first time after a vacancy has occurred shall not demand, receive or collect a higher rental for said unit than that which was in effect on the date such vacancy occurred, unless and until the landlord or owner shall certify in writing, under oath, to the Clifton Housing Department, on the form provided by said Department, the amount of the monthly rental in effect for such unit as of the date on which the same became vacant, the rent to be charged therefor for the first time after such vacancy has occurred and the cause or reason which resulted in such unit's having become vacant and unoccupied.
Any party against whom a complaint is made, landlord or tenant, shall file an answer to the complaint, in writing, with the Rent Leveling Board within 20 days of the service of the complaint, which answer shall set forth the factual contentions upon which said party shall rely in objecting to the relief sought. A copy of said answer shall also be served upon the party initiating the action.
All complaints, answers, notices and other documents required to be served upon any party in accordance with the provisions of this chapter shall be served by certified mail, return receipt requested, and proof of such service shall be filed with the Rent Leveling Board.
[Amended 12-21-1993 by Ord. No. 5661-93]
All applications for each of the following categories shall be accompanied by the corresponding fees:
Any person found guilty of violating any provision of this chapter or of willfully filing with the Rent Leveling Board any material misstatement of fact shall be punishable by a fine not exceeding $500 or by imprisonment for a term not exceeding 90 days, or both. A violation affecting two or more leaseholds shall be considered a separate violation as to each leasehold.
This chapter, being necessary and required for the welfare of the City of Clifton and for the health, safety and welfare of its citizens, shall be liberally construed to effectuate the purposes thereof.