[HISTORY: Adopted by the City Council of the City of Trenton 9-7-1967 as § 12-20 of the Revised General Ordinances. Amendments noted where applicable.]
Housing standards — See Ch. 132.
The City Council of the City of Trenton finds that:
There has existed for many years a shortage of affordable rental housing in the City of Trenton.
Without some controls, such shortage will lead to excessive and unconscionable rents and rent increases.
In order to provide appropriate controls, the City Council has enacted ordinances to control rent and rent increases and to establish a Rent Stabilization Board to oversee such controls.
It is necessary for the protection of the health, welfare and safety of the residents of the City that the previously imposed controls on rents effective prior to January 1, 1997, be continued uninterrupted and that rents be rolled back to the levels in existence on December 31, 1996, and that rental provisions inconsistent with the requirements of this chapter contained in any agreements entered in subsequent to December 31, 1996, be invalidated.
As used in this chapter, the following terms shall have the meanings indicated:
- CAPITAL IMPROVEMENTS
- A permanent improvement that is reasonably expected to last more than one year. The improvement must benefit the dwelling and must be subject to allowances and depreciation under the United States Internal Revenue Code, except that any improvement in a Historic District established by the City, other than painting, may be considered a capital improvement according to the Rent Stabilization Ordinance, without regard to its status under federal or state tax law.
- COMMERCIAL USE
- Any use for nonresidential business activity such as retail, office, warehouse or similar uses. Whenever an entire building is rented to a single tenant for a combination of commercial and residential uses under a single lease without an allocation of the rental between the commercial and residential portions, the entire tenancy shall be deemed to be commercial and exempted under the definition of "dwelling."
- The cost of an asset whose term of life is more than one year, the expense of which shall be in accordance with the applicable time schedules then in existence under the United States Internal Revenue Code.
- Any building or structure rented to one or more individuals or households. Exempt from this chapter are owner-occupied one- and two-family dwellings; public or other federally subsidized housing; any motel, hotel or other premises primarily serving transient guests; or any portion of a building or structure rented for commercial use. Newly created housing units, whether through new construction or conversion from nonresidential use and rented for the first time, are exempt, and the initial rent may be established by the landlord without reference to the provisions of this chapter. All subsequent changes in rent in such units will be subject to the provisions of this chapter.
- DWELLING UNIT
- That portion of a dwelling rented or offered for rent for living and dwelling purposes to one individual or household unit, together with all privileges, services, furnishings, furniture, equipment, facilities and improvements connected with the use or occupancy of such portion of the property.
- Any person who, under written or oral agreement, leases real property to another either as lessor or sublessor. When used in relation to petitions for rent increases, the term "landlord" shall include any person who is either a contract purchaser or assignee of the landlord regarding such real property that is the subject of the petition, and who has the written consent of the landlord to petition the Rent Stabilization Board for relief.
- PRESENT ANNUAL RENTAL VALUE
- The sum of money actually charged as rent for the rental unit calculated on the basis of one year's occupancy, whether or not actually rented. The current fair market rental value of the unit as determined by the Board shall be deemed to be the present annual rental value of any unit not actually rented at the time in question.
- RENT INDEX
- The statistical index governing rent increases under this chapter. The rent index shall be subject to change every six months commencing with January 1 and July 1 of each year, and shall remain unchanged during each six-month period. The rent index shall be computed by taking the twelve-month average of the United States Housing Component of the Consumer Price Index-U for Rent (Residential) immediately preceding the beginning of each six-month period. For example: if the twelve-month average of the United States Housing Component of the Consumer Price Index-U for Rent (Residential) for the period of January 1 through December 31, 1995, was 2.83%, then the rent index in effect for the period January 1 through June 30, 1996, would be 2.83%. If the twelve-month average of the United States Housing Component of the Consumer Price Index-U for Rent (Residential) for the period July 1, 1995, through June 30, 1996, is 2.90%, then the rent index for the six-month period commencing July 1, 1996, will be 2.90%.
- RENTAL SPACE
- The total portion of a dwelling rented or offered for any purposes or uses, including commercial, professional, industrial or residential.
- RENTAL UNIT
- Any space in a dwelling, whether or not governed by this chapter, offered for rent or actually rented as residential, commercial or other space as a single, individual unit.
- UNIT TAX BURDEN
- That portion of the total local real estate taxes assessed against a dwelling which is allocable to each separate rental unit as determined by reference to the following formula: divide the total present tax assessment levied upon the entire dwelling by the sum of the present annual rental value of every rental unit therein and multiply the number thus obtained by the present annual rental value of each unit.
There is hereby created a Rent Stabilization Board within the City of Trenton. The Board shall consist of seven members. The makeup of the Board shall be two landlords, including for this purpose managerial agents of the landlords, who own rental property in the City; two tenants who live in the City; and three persons who are neither landlord nor tenants in the City, and who shall be residents of the City.
Appointment of members and alternates.
The Mayor shall appoint the members of the Rent Stabilization Board with the advice and consent of City Council; two appointees serving initial terms which shall expire on December 31, 1997, three appointees serving initial terms which shall expire on December 31, 1998; and two appointees serving initial terms which shall expire on December 31, 1999. Following the initial term of each appointee the term of each set on the Board shall be three years. Board members shall continue to serve after the expiration of their respective terms until their successor has been appointed and qualified. All members of the Board shall serve without compensation.
The Mayor shall also appoint three alternate members to the Rent Stabilization Board with the advice and consent of City Council, one of whom shall be a landlord, one of whom shall be a tenant; and one of whom shall be neither a landlord nor a tenant. Alternate members shall satisfy the residency requirements of regular members. Each alternate member shall be appointed for a term of one year and shall serve upon the Board without compensation.
The Board shall be assisted in its operations by a City employee to be designated as the Rent Stabilization Board administrative officer, whose duties shall include the initial review of all petitions and other pleadings addressed to the Board for compliance with the procedural rules of this chapter and the procedural rules adopted by the Board. The administrative officer shall also be responsible for the preparation of all properly filed pleadings for hearing by the Board. The administrative officer shall also provide information and guidance to any landlord or tenant seeking guidance with respect to the procedural requirement of his/her case and shall take charge generally of all administrative matters necessary to the smooth and efficient operation of the Board.
If, in the opinion of the Board, the calendar of hearings should exceed the capacity of the Board to give proper attention to each case in timely fashion, or that a case is of such a nature that it deems it appropriate, it shall have the power to assign cases to a hearing officer, who shall be knowledgeable in law, accounting, real estate or related matters, and who shall preside over hearings, receive evidence and report his/her findings of fact and conclusions of law, in writing, to the Board which, after review of such findings of fact and conclusions of law and the documentary evidence, shall either approve or modify the findings and enter a final ruling consistent with the evidence, all within such time periods and according to such procedural rules as the Board shall prescribe. In so doing, members of the Board shall have access to a transcript or tape recording of the testimony and all documentary evidence received by the hearing officer.
The Rent Stabilization Board shall study local problems and issues relating to landlord-tenant relations, supply information to the public and advise the Mayor and City Council from time to time or as requested on any such issue as may concern the conduct of City government. The Board shall further be responsible for establishing reasonable rules for the conduct of its own business, including the election of its officers, and shall recommend to the Mayor and City Council rules, regulations and ordinances necessary and desirable to supplement and to implement the purposes of this chapter. In addition to the powers expressly granted thereby, the Board shall have all other powers necessary and proper to carry out and execute the purposes of this chapter. The funds necessary to establish and sustain the activities of the Board shall be provided by the City from time to time in such amounts as are appropriated by the City Council.
Any rental increase at a time other than at the expiration of a lease or termination of a periodic lease shall be void unless provided for in the terms of such lease agreement or by mutual agreement between the landlord and the tenant. Notwithstanding any such agreement, any rental increase in excess of that authorized by the provisions of this chapter shall be void and may be the subject of action by the Board.
No landlord shall be eligible for any rent increase requiring approval by the Board or by a hearing officer designated by the Board as provided by this chapter, except where the landlord provides evidence acceptable to the Board that no delinquent property taxes or sewer and water payments are owing on the property which is the subject of the proposed rent increase.
At the expiration or termination of a formal lease or a periodic tenancy, no landlord may receive a percentage increase in rent for that housing space from any tenant which is greater than the rent index based upon the rent index in effect 90 days prior to the expiration or termination of the lease. For a periodic tenant whose base sum shall be less than one year, such tenant shall not be cause to pay any increase in any rent based upon a rent index more than once during any twelve-month period, and may only be caused to pay a rent increase based upon the rent index in effect 90 days prior to the effective date of the proposed increase.
In accordance with the procedural provisions of this chapter and such procedural regulations as may be adopted by the Board, a landlord may receive an increase in excess of that permitted by § 222-6 above in the rent of any dwelling unit because of a current increase in local property taxes directly affecting that dwelling, but only when such taxes increase by a percentage greater than the applicable rent index percentage increase last applied to the dwelling unit under § 222-6 over the twelve-month period immediately preceding.
The increase permitted under this section shall be computed in the following manner: the percentage increase in the rent index used in § 222-6 shall be subtracted from the percentage increase in property taxes for the dwelling. The percentage difference shall then be multiplied by the appropriate unit tax burden to determine the amount of increase allowable as a result of a property tax increase. If the percentage increase in the rent index used in this computation is greater than the percentage increase in property tax, no increase in rent shall be permitted. The landlord, prior to the imposition of any such increase in rent, shall notify the tenant in the manner prescribed in § 222-14 hereinafter of his/her intentions and shall provide a clear statement of the manner in which the increase was calculated.
No rent increase under this section may take effect until or unless the landlord has documented the increase on a form which the Board shall prescribe and make available, a copy of which form shall be completed in full and filed with the Board and copies served on all tenants affected by the rent increase prior to the effective date of the increase.
In the event a tax appeal is taken by the landlord and the landlord is successful in such appeal and the taxes are reduced, or if the taxes on the property are reduced as a result of any other circumstance, whether or not at the initiative of the landlord, the tenant shall receive 50% of the reduction as applied to his/her unit tax burden after deducting all expenses incurred by the landlord in prosecuting such appeal. In the event taxes are decreased by virtue of any other circumstances, 50% of the benefit of the decrease shall be credited to each rental unit in proportion to its unit tax burden.
The landlord shall notify any tenants eligible for such a reduction in rent of the total decrease in property taxes resulting from such appeal or other circumstances, and the amount of the decrease to which each tenant is entitled within 30 days of the landlord receiving formal notification of the decrease. Such notification shall be filed with the Board. The rent reduction shall be reflected in the first rental payment coming due from the tenant after 30 days from the date on which the landlord received formal notification of the decrease in taxes.
In the event that the landlord fails to provide for the appropriate rent reduction in a timely fashion, as set forth in Subsection B above, the Board may determine the amount owed to the tenant and order its immediate payment with a penalty that the Board may impose at its discretion, but not in excess of 20% of the amount owed.
In accordance with the procedural provision of this section and such procedural regulations as may be adopted by the Board, a landlord may receive an increase exceeding the limitation of § 222-6 above in the rent of any dwelling unit because of a current increase in local sewer and water charges directly affecting his/her dwelling only when such charges increase by a percentage greater than the applicable rent index percentage increase last applied to the dwelling unit, pursuant to § 222-6, over the twelve-month period immediately preceding. The increase permissible under this section shall be computed in the following manner:
Where the increase applies to a single unit, or where all of the units to which the increase applies contain the same number of bedrooms, the increase shall be applied as in § 222-7.
Where the increase applies to a building containing more than one unit and where units in such building contain different numbers of bedrooms, the landlord shall total the number of bedrooms in the building and divide the number of bedrooms in each unit by that total in order to obtain the pro rata share for each unit. The landlord shall allocate the increase calculated as in § 222-7 among the units in the building according to the pro rata share of each as so determined.
No sewer or water charge increase under this section may take effect until or unless the landlord has documented the increase on a form which the Board shall prescribe and make available, a copy of which form shall be completed in full and filed with the Board and copies served on all tenants affected by the increase prior to the effective date of the increase.
A landlord may petition the Board to permit an increase in rent by an amount exceeding all other limitations imposed hereby upon one or more of the following grounds:
Present rents are insufficient to enable the landlord to maintain the dwelling unit in conformity with local or state housing codes or other appropriate legal requirements; provided, however, that no such increase shall be approved in the absence of clear and convincing evidence that, despite diligent efforts and reasonable measures to economize within financial constraints affecting the operation and management of the dwelling, the necessary funding cannot be provided without resort to a rental increase.
Present rents are insufficient to enable the landlord to satisfy reasonable mortgage or other normal and customary financial obligations directly related to the normal maintenance and operation of the dwelling; provided, however, that on the basis of the same proofs that are required under Subsection A above, as well as documentation of the particular financing provisions underlying the petition, and that an increase under this Subsection B shall only be approved where the Board finds that resort to rental increases is necessary to prevent a default in such obligations entered into in good faith, and not for the purpose of qualifying for an increase hereunder. The applicant for an increase under this section shall further have the burden of showing that the purchase price, mortgage terms and other financial obligations which form the basis for the request for an increase in rent are:
The landlord has made or proposes to make capital improvements or service improvements to the dwelling which directly or indirectly have or will have a substantial effect upon the dwelling unit for which the increase is sought. The landlord shall compute the average cost of the improvement per year of useful life by dividing the cost of the completed capital improvement by the number of years of useful life of the improvement as claimed by the landlord for income tax depreciation purposes. The amount of the monthly increase which a landlord may charge shall be prorated among all tenants benefiting from such improvement by dividing 1/12 of the annual cost of the capital improvement by the total rent roll of the units affected by the improvement in the dwelling, occupied or unoccupied. No tenant who receives no benefit from the improvement shall be liable for a capital improvement increase, and no tenant who benefits from an improvement shall be liable for an increase exceeding the percentage of rent paid by him/her as calculated above, and all such rent increases shall be charged for no period greater than the depreciation period of such improvements. The landlord shall notify the tenants at least 60 days before the effective date of the increase. The notice shall include the amount of increase. The tenant may request a hearing within 30 days of receipt of notice from the landlord. Any increase may be approved prior to improvements being made, but the increase shall not take effect until after the improvements have been completed.
Any substantial hardship created by circumstances beyond the control of the landlord or his/her agent which arose or substantially changed during the term of the lease or period of tenancy under which the present rent is fixed.
As a result of the landlord's past failure to impose the rent increases permitted under § 222-6, the rent is now significantly below prevailing market rents for units of comparable size and location. Where the Board finds that such is the case, the landlord shall compute the maximum rent that would be in effect if all increases had been made as permitted under § 222-6, and shall submit documentation of the base rent used for purposes of this showing, and the calculations made to determine the maximum rent that would be in effect at the time of the petition. Where the Board finds that such documentation is in order, it shall permit maximum rent, provided that:
If the increase from the current rent is less than 15%, the increase may be imposed at the next anniversary of the tenant's occupancy.
If the increase is more than 15% but less than 30%, it shall take place in two equal annual installments.
If the increase is more than 30% but less than 50%, it shall take place in three equal annual installments.
If the increase is more than 50% but less than 65%, it shall take place in four equal annual installments.
If the increase is more than 65% but less than 80%, it shall take place in five equal annual installments.
If the increase is 80% or more, it shall take place in such number of years as the Board shall prescribe.
No landlord shall impose upon any tenant an increase in rent exceeding the amount permitted under §§ 222-6, 222-7 and 222-9 without first obtaining the approval of the Board by way of petition. It shall be within the discretion of the Board to fix the effective date of any approved increase at any reasonable time prior to or after the determination of the Board; provided, however, that in no case shall the Board permit any increase applied for under § 222-10C to become effective prior to the completion of the capital project, which completion shall be certified to the Board upon notice to the tenants and which certificate and notice shall contain an accurate statement of the total cost of the improvement and the sum allocated to each unit of the dwelling and, provided that, except as explicitly provided in this section, the Board shall not have the power to ignore or supersede the terms of a lease agreement, written or oral, with respect to rent increase or any other condition of tenancy. Nothing herein shall limit the authority of the Board to order a landlord to rescind any rent increase illegally or improperly imposed and to repay such increase to the tenant with or without interest on such terms and conditions that the Board shall impose.
Notwithstanding the language above, no rent increase granted by the Board shall be made retroactive to a date prior to the determination of the Board where the landlord previously imposed the increase, in whole or in part, without Board approval and has been the subject of an order disallowing such increase pursuant to § 222-12.
A tenant may petition the Board pursuant to the rules of procedure for an order disallowing an increase in rent proposed by the landlord pursuant to §§ 222-6, 222-7, 222-9 and 222-10 upon one or more of the following grounds:
The landlord has failed to provide, during the term of the current tenancy, essential, normal services to the tenant; and/or the landlord has failed to maintain the dwelling in a safe, sanitary or habitable condition during all or part of the term of the tenancy.
An increase, as imposed or proposed, is calculated improperly or without proper notice or in any other manner which violates this chapter.
The proposed increase does not relate to a capital or service improvement which substantially affects the tenant's housing space directly or indirectly.
Nothing in this or any other section shall prevent any tenant of any dwelling unit subject to the provisions of this chapter from bringing a petition to the Board where the tenant believes that the landlord has illegally or improperly increased the rent of the unit or reduced services to the unit, whether or not the landlord has sought approval of such rent increase from the Board.
It shall be unlawful for any landlord to evict or fail to renew the lease of any tenant or to take any other steps whatsoever in reprisal regarding the performance of services or otherwise because of a tenant's petition for an order disallowing a proposed rent increase or because of the exercise of any other power or procedure provided herein, or in order to compel, induce or encourage a tenant to vacate the premises.
The Board shall hear and determine petitions for an adjustment in rent for any individual dwelling unit subject to this chapter according to the following rules of procedure or according to regulations adopted by the Board with the approval of City Council not inconsistent herewith:
A landlord of any dwelling or a tenant of any dwelling unit subject to this chapter may petition the Board for an adjustment of the rent for any individual dwelling unit or units by first giving notice, in writing, of the proposed filing of a petition for rent adjustment and the precise form of relief requested, citing the appropriate section of this chapter under which (s)he requests relief.
A landlord shall serve notice upon the record tenant of the affected dwelling unit by certified mail, return receipt requested, addressed to him/her at the dwelling unit and by posting a copy of the notice conspicuously in a central location within the dwelling. A tenant shall mail such notice to the landlord by mail addressed to him/her or his/her agent at the dwelling affected or at any other known address of the landlord or his/her agent.
Service shall be made or attempted no less than 10 days prior to the filing of the petition.
A petition for rent adjustment shall be filed together with an affidavit of service of proper notice with the secretary of the Board. Upon receipt of a properly filed petition, the Board shall cause the matter to be set down for a hearing and shall notify all persons affected thereby of the time and place of the hearing.
Every hearing shall be conducted by a quorum of the Board consisting of a simple majority of the full Board membership and which quorum shall also consist of at least one member who is a landlord, one member who is a tenant and one member who is neither a landlord nor tenant. Two or more petitions involving the same landlord, in the discretion of the Board, may be consolidated for a single hearing. The Board shall reduce its findings of fact and conclusions to writing and shall serve such written opinion upon all parties and shall file the original thereof with the City Clerk.
Any party may appeal the final determination of the Board to the court of proper jurisdiction.
The failure of any party to a rent adjustment proceeding to appear in defense of or in response to a petition shall not be cause for the granting of the relief petitioned for; provided, however, that the Board shall not be obligated to await the appearance of any party failing to respond to a notice of a hearing and may proceed to a hearing and determination upon whatever evidence is produced before it.
If the Board shall determine that a tenant has been caused to pay excessive rents in excess of the limitations provided herein, it shall incorporate in its final determination an order compelling an appropriate reimbursement or credit to be made by the landlord.
All rules, regulations, notices or other literature for general informational purposes issued by the Board, or required to be issued, or served by any landlord or tenant shall be written in English and in Spanish.
The Board shall have the authority to approve a petition for a rent increase in an amount less than the entire amount sought by the petition or, if the petition seeks relief in separate categories, to approve or reject them individually.
During the term of this chapter, the landlord shall maintain the same standards of service, maintenance, furniture, furnishings and equipment in the housing space and dwelling as was provided or was required to be provided by law or lease at the date the lease was entered into. Any transfer from the landlord to the tenant of the costs or responsibilities for supplying essential services such as public utilities and heat shall be deemed a rental increase, the amount of which shall be determined by computing or estimating the average monthly costs of providing the same projected on the basis of current costs for such services or supplies and upon prior actual consumption rates to the extent known. It shall be the responsibility of the landlord to produce adequate records of prior costs and volumes equitably allocated for each rental unit for which such a transfer is sought. The projected amount of the increase in rent resulting from such transfer shall not exceed the amount resulting from application of the rent index permitted by § 222-6, except where the landlord has obtained approval of an increase greater than the index under the provisions of § 222-10.
Nothing in this chapter shall restrict the owner of a newly created unit, either through new construction, rehabilitation of a previously uninhabitable structure or conversion of a nonresidential structure, in the initial rent charged.
Upon a previously occupied unit being vacated by its tenant, the landlord may increase the rent charged for the unit for the new tenant without application to the Board; provided, however, that where the rent charged the new tenant exceeds the last rent charged the previous tenant by more than 25%, the tenant shall have the right to seek a reduction in the rent which shall be granted by the Board, except where the landlord can demonstrate that the rent increase is justified under the provisions of this chapter, or can demonstrate that the previous tenancy was not based on an arms-length business relationship.
A willful violation of any provisions of this chapter, including, but not limited to, the willful filing with the Board of any material misstatement of fact or any violation of an order duly issued by the Board, shall be punishable as provided in Chapter 1, Article III, General Penalty. A violation affecting more than one leasehold shall be considered a separate violation as to each leasehold.
This chapter being necessary for the welfare of the City of Trenton and its inhabitants shall be liberally constructed to effectuate the purposes thereof.
This chapter shall become effective upon final adoption and approval as provided by law but, for the protection of the health, welfare and safety of the residents of the City, in order that the previously imposed controls on rents effective prior to January 1, 1997, continued uninterrupted it shall have retroactive effect to January 1, 1997, and rents shall be rolled back to the levels in existence on December 31, 1996, and any rental provisions inconsistent with the requirements of this chapter contained in any agreements entered into subsequent to December 31, 1996, are hereby invalidated.