Bill Text: NJ A4873 | 2024-2025 | Regular Session | Introduced
Bill Title: Authorizes residential tenant action in cases of alleged unconscionable rent increase; appropriates $2 million.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced) 2024-09-26 - Introduced, Referred to Assembly Housing Committee [A4873 Detail]
Download: New_Jersey-2024-A4873-Introduced.html
Sponsored by:
Assemblywoman YVONNE LOPEZ
District 19 (Middlesex)
SYNOPSIS
Authorizes residential tenant action for alleged unconscionable rent increase; appropriates $2 million.
CURRENT VERSION OF TEXT
As introduced.
An Act authorizing residential tenant action in cases of alleged unconscionable rent increase, supplementing Title 2A of the New Jersey Statutes, and making an appropriation.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. a. For the purposes of this section:
"Consumer Price Index" means the average of the annual increase, expressed as a percentage, in the consumer price index for all urban consumers in the New York City and Philadelphia metropolitan statistical areas during the preceding calendar year as reported by the United States Department of Labor.
"Geographic area" means within 10 miles of the residential property.
b. (1) Any notice of rent increase provided by a landlord to a residential tenant shall include the following:
(a) the contact information of an individual authorized to speak to the tenant about the proposed rent increase; and
(b) the following statement in a bold typeface in a font size no less than one point larger than the point size of the rest of the written statement or 11 points, whichever is larger:
NEW JERSEY LAW PROVIDES THAT A TENANCY SHALL RENEW ON A MONTH-TO-MONTH BASIS AT THE EXPIRATION OF THE LEASE TERM, UNLESS THE LEASE IS LAWFULLY TERMINATED. A LANDLORD MAY INCREASE THE RENT AT THE EXPIRATION OF A LEASE TERM, PROVIDED THAT THE NEW RENT COMPLIES WITH APPLICABLE FEDERAL, STATE, AND LOCAL LAWS AND IS NOT UNCONSCIONABLE. IF A TENANT BELIEVES THAT THE RENT INCREASE IS NOT PERMITTED OR IS UNCONSCIONABLE, THE TENANT HAS THE RIGHT TO REQUEST IN WRITING, WITHIN 10 DAYS OF RECEIPT OF THE NOTICE OF THE RENT INCREASE, THAT THE LANDLORD PROVIDE THE RATIONALE USED BY THE LANDLORD TO ESTABLISH THE AMOUNT OF THE RENT INCREASE, AND REQUEST A NEW NOTICE OF RENT INCREASE, AND NEGOTIATE FOR A DIFFERENT AMOUNT. THE LANDLORD IS REQUIRED TO PROVIDE THE TENANT WITH ITS RATIONALE WITHIN 10 DAYS AFTER RECEIPT OF THE TENANT'S WRITTEN REQUEST. THE LANDLORD IS REQUIRED TO INCLUDE THE FOLLOWING INFORMATION AS PART OF THEIR RATIONALE FOR ESTABLISHING THE RENT INCREASE:
§ THE CHANGE IN THE CONSUMER PRICE INDEX SINCE THE LAST INCREASE IN RENT, THE START OF THE PRESENT LEAST TERM, OR WITHIN THE PAST TWO YEARS, WHICHEVER IS MOST RECENT;
§ THE LANDLORD'S EXPENSES, CONTAINING SPECIFIC FINANCIAL DATA, ASSOCIATED WITH THE TENANT'S UNIT AND WITH THE COMMON AREAS OF THE PROPERTY, WHICH CONTRIBUTED TO THE RENT INCREASE;
§ THE LANDLORD'S PROFITABILITY, CONTAINING SPECIFIC FINANCIAL DATA, PRIOR TO THE RENT INCREASE, AND THE LANDLORD'S ANTICIPATED PROFITABILITY, CONTAINING SPECIFIC FINANCIAL PROJECTIONS, AFTER THE PROPOSED RENT INCREASE;
§ A DESCRIPTION AND BRIEF COMPARISON OF HOW THE EXISTING AND PROPOSED RENT COMPARES TO RENTS CHARGED AT SIMILAR RENTAL PROPERTIES IN THE GEOGRAPHIC AREA, INCLUDING FAIR MARKET RENTS AND SMALL AREA MARKET RENTS;
§ THE LENGTH OF TIME SINCE THE LAST RENT INCREASE BY THE CURRENT LANDLORD AGAINST THE RESIDENTIAL TENANT;
§ A DESCRIPTION OF THE CONDITION OF THE PROPERTY, INCLUDING BUT NOT LIMITED TO, WHETHER THERE WERE MAINTENANCE REQUESTS OR CLAIMS RELATED TO HABITABILITY, AND WHETHER THERE WERE ANY, OR CURRENTLY ARE, CODE VIOLATIONS FOR THE TENANT'S UNIT OR COMMON AREAS; AND
§ A DESCRIPTION OF WHY THE LANDLORD BELIEVES THAT THE PROPOSED RENT INCREASE IS NOT UNCONSCIONABLE.
IF A TENANT AND LANDLORD ARE UNABLE TO NEGOTIATE A RENT AMOUNT BEFORE THE DATE THAT A NEW LEASE TERM IS TO BEGIN, OR WITHIN 30 DAYS OF THE DATE THAT A NOTICE OF INTENT TO VACATE OR REMAIN IN THE UNIT IS REQUIRED BY THE CURRENT LEASE, WHICHEVER IS EARLIER, THEN THE TENANT MAY BRING AN ACTION IN THE SUPERIOR COURT, LAW DIVISION, SPECIAL CIVIL PART IN THE COUNTY IN WHICH THE PROPERTY IS LOCATED AGAINST THE LANDLORD FOR RAISING THE RENT BY AN UNCONSCIONABLE AMOUNT. AT COURT, THE LANDLORD, NOT THE TENANT, BEARS THE BURDEN OF PROVING THAT THE RENT INCREASE IS NOT UNCONSCIONABLE.
(2) A residential tenant who receives a notice of rent increase from a landlord and believes the increase in rent to be unconscionable, pursuant to the standards established by subsection d. of this section, may, within 10 days of receipt of the notice of rent increase, submit in writing a request for the landlord to provide the rationale used by the landlord to establish the amount of the rent increase and request a new notice of rent increase in a lesser amount.
(3) Within 10 days after the receipt of a residential tenant's request, submitted pursuant to paragraph (2) of this subsection, the landlord:
(a) shall provide the residential tenant in writing with the rationale for the amount of the rent increase, which shall include the information required pursuant to paragraph (4) of this subsection; and
(b) may begin negotiating a rent amount by providing the residential tenant with a new notice of rent increase in a lesser amount than offered by the previous notice of rent increase.
(4) The landlord's rationale, required pursuant to subparagraph (a) of paragraph (3) of this subsection, for the rent increase shall include the following:
(a) the change in the Consumer Price Index since the last increase in rent, the start of the present least term, or within the past two years, whichever is most recent;
(b) (i) the landlord's expenses, containing specific financial data, associated with the tenant's unit and with the common areas of the property, which contributed to the rent increase;
(ii) the landlord's profitability, containing specific financial data, prior to the rent increase, and the landlord's anticipated profitability, containing specific financial projections, after the proposed rent increase;
(iii) the information required pursuant to sub-subparagraphs (i) and (ii) of this subparagraph shall include but not be limited to: the financial impact of new ownership or of refinancing of the property, and improvements and maintenance to the rental unit over the duration of the previous lease term.
(c) a description and brief comparison of how the existing and proposed rent compares to rents charged at similar rental properties in the geographic area, including fair market rents and small area market rents;
(d) the length of time since the last rent increase by the current landlord against the residential tenant;
(e) a description of the condition of the property, including but not limited to, whether there were maintenance requests or claims related to habitability, and whether there were any, or currently are, code violations for the tenant's unit or common areas; and
(f) a description of why the landlord believes that the proposed rent increase is not unconscionable.
c. If a residential tenant and landlord are unable to negotiate a rent amount before the date that a new lease term is to begin, then the residential tenant may bring action in a court of competent jurisdiction against the landlord for raising rent by an unconscionable amount.
d. In determining whether a rent increase is unconscionable, the court shall consider:
(1) the amount of the rent increase proposed in the most recent notice of rent increase, including, but not limited to, the consideration of the change in the Consumer Price Index since the last increase in rent, but not more than the last two years;
(2) the landlord's expenses and profitability, including, but not limited to, the consideration of new ownership or refinancing of the rental unit, new or preexisting mortgages on the property, and any improvements and maintenance to the rental unit over the duration of the previous lease;
(3) the financial circumstances of the residential tenant;
(4) how the existing and proposed rent compare to rents charged at similar rental properties in the geographic area, including fair market rents and small area market rents;
(5) the relative bargaining position of the parties, including but not limited to, consideration of the availability of rental housing in the geographic area and any educational or financial inequities between the parties; and
(6) whether the rent increase would shock the conscience of a reasonable person, which consideration shall include but not be limited to, whether the rent amount includes utilities and any utility rate increase approved by the relevant rate setter during the previous 12 months;
(7) the length of time since the last rent increase by the current owner against the residential tenant, the length of tenancy, and the length of property ownership; and
(8) the condition of the property, including but not limited to, claims related to the habitability of the premises and outstanding code violations.
e. No one factor considered by a court of competent jurisdiction, pursuant to subsection d. of this section, shall be the sole factor in the court's decision concerning an unconscionable rent increase.
f. The landlord shall bear the burden of proof to demonstrate that a rent increase is conscionable.
g. (1) If a court of competent jurisdiction finds that the landlord's most recent notice of rent increase offered an increase in rent in an unconscionable amount, that the landlord did not include in the notice of rent increase the required statement specified pursuant to paragraph (1) of subsection b. of this section, or provide the rationale required pursuant to paragraph (4) of subsection b. of this section, the court shall require the landlord to offer the residential tenant a 12-month lease for the unit occupied by the residential tenant in an amount no greater than the amount of rent charged under the previous lease agreed upon by both parties, plus the percentage change in the Consumer Price Index, and shall require the tenant to pay any arrears accrued by the tenant to the landlord in a timeframe determined by the court based upon relevant factors considered by the court pursuant to subsection d. of this section.
(2) If a court of competent jurisdiction finds that the landlord's most recent notice of increase offered an increase in rent in a conscionable amount, the court shall require the tenant to pay the landlord any arrears accrued by the tenant while the tenant's action was pending in court, including the amounts disputed.
h. (1) A landlord shall not bring an eviction action against a residential tenant pursuant to subsections a., f., i., or j. of section 2 of P.L.1974, c.49 (C.2A:18-61.1) during the period of time in which the residential tenant's action bought against the landlord pursuant to subsection c. of this section is pending in a court of competent jurisdiction.
(2) The provisions of this subsection shall not be construed to prohibit a landlord from bringing an eviction action against a residential tenant pursuant to subsections a., f., i., or j. of section 2 of P.L.1974, c.49 (C.2A:18-61.1), at any time for any reason unrelated to the disputed rent increase.
i. The provisions of this section shall not be construed to limit a residential tenant's ability to challenge a proposed rent increase in defense of an eviction action or to file separate claims against a landlord, including, but not limited to claims filed pursuant to P.L.1960, c.39 (C.56:8-1 et seq.).
j. The provisions of this section shall not apply to a rent increase that is subject to and compliant with a local rent control ordinance or approved ordinance variance.
k. Court records concerning an action brought by a residential tenant against a landlord pursuant to subsection c. of this section shall remain confidential and shall be excluded from public access.
l. (1) The Administrative Office of the Courts shall develop and implement a public awareness campaign to inform residential tenants and landlords of the policies and processes established pursuant to this section.
(2) The Administrative Office of the Courts shall conduct a required training for judges who will hear cases brought by a tenant against a landlord pursuant to subsection c. of this section, and Special Civil Part court staff, to inform the judges and court staff of the policies and processes established pursuant to this section.
2. There is appropriated $2,000,000 from the General Fund to the Administrative Office of the Courts for the purposes of P.L. , c. (C. ) (pending before the Legislature as this bill). $1,000,000 of the funds appropriated to the Administrative Office of the Courts shall be used for the development and implementation of a public awareness campaign pursuant to subsection l. of section 1 of P.L. , c. (C. ) (pending before the Legislature as this bill) and $1,000,000 shall be used to conduct required training for judges pursuant to subsection l. of section 1 of P.L. , c. (C. ) (pending before the Legislature as this bill).
3. This act shall take effect on the first day of the sixth month next following enactment, except that the Administrative Office of the Courts may take such anticipatory administrative action necessary for the implementation of this act.
STATEMENT
This bill authorizes residential tenant action in cases of alleged unconscionable rent increases. The bill provides that a residential tenant who receives a notice of rent increase from a landlord and believes the increase in rent to be unlawfully unconscionable, may, within 10 days of receipt of the notice of rent increase, request the landlord to provide in writing the rationale for the amount of the rent increase and request a new notice of rent increase in a lesser amount. Within 10 days of a residential tenant's request, the landlord would be required to provide rationale for the amount of the rent increase and would be permitted to begin a negotiation with the tenant by offering a new notice of rent increase in a lesser amount. The landlord is required to include in their written rationale provided to the tenant the following information:
§ the change in the Consumer Price Index since the last increase in rent, the start of the present least term, or within the past two years, whichever is most recent;
§ the landlord's expenses, containing specific financial data, which contributed to the rent increase;
§ the landlord's profitability, containing specific financial data, and the landlord's anticipated profitability, containing specific financial projections;
§ a description and comparison of how the existing and proposed rent compares to rents charged at similar rental properties in the geographic area;
§ the length of time since the last rent increase;
§ a description of the condition of the property, including but not limited to, whether there were maintenance requests or claims related to habitability, and whether there were any, or currently are, code violations for the tenant's unit or common areas; and
§ a description of why the landlord believes that the proposed rent increase is not unconscionable.
If a residential tenant and landlord are unable to negotiate a rent amount within 30 days from the date that a new lease term begins, then the residential tenant would be authorized to bring an action against the landlord in a court of competent jurisdiction for raising rent by an unconscionable amount.
To determine whether a rent increase is unconscionable, the court would be required to consider: the amount of the rent increase proposed in the most recent notice of rent increase; the landlord's expenses and profitability; the financial circumstances of the residential tenant; how the existing and proposed rent compare to rents charged at similar rental properties in the geographic area; the relative bargaining position of the parties; whether the rent increase would shock the conscience of a reasonable person; the length of time since the last rent increase by the current owner against the residential tenant, the length of tenancy, and the length of property ownership; and the condition of the property.
If the court finds that the landlord offered an increase in rent in an unconscionable amount, that the landlord did not include in the notice of rent increase the required statement specified by the bill, or provide the rationale required by the bill, the court would require the landlord to offer the residential tenant a 12-month lease for the property occupied by the residential tenant in an amount no greater than the amount of rent charged under the previous lease agreed upon by both parties, plus inflation, and would require the tenant to pay any arrears, based upon relevant factors considered by the court during the case.
If the court finds that the landlord's most recent notice of increase offered an increase in rent in a conscionable amount, the court would require the tenant to pay the landlord any arrears accrued by the tenant while the tenant's action was pending in court, including the amounts disputed.
A landlord would be prohibited from bringing certain eviction actions against a residential tenant pursuant to section 2 of P.L.1974, c.49 (C.2A:18-61.1) during the period of time in which the residential tenant's action is pending in court, unless the eviction action is unrelated to the disputed rent increase.
The bill provides that its provisions would not be applicable to rent increases that are subject to and compliant with a local rent control ordinance. The bill also provides that any court records concerning an action brought by a residential tenant against a landlord are required to remain confidential and be excluded from public access.
The bill also requires the Administrative Office of the Courts to: 1) develop and implement a public awareness campaign to inform residential tenants and landlords of the policies and processes established by the bill, and 2) to conduct a required training for judges who will hear cases of alleged unconscionable rent increase brought by a tenant against a landlord and court staff. The bill appropriates $1 million to the Administrative Office of the Courts for each of these purposes.
The bill would take effect on the first day of the sixth month following enactment except that the Administrative Office of the Courts may take anticipatory administrative action necessary to effectuate the provisions of the bill.
