Bill Text: NJ S1098 | 2024-2025 | Regular Session | Introduced
Bill Title: Provides mortgage payment relief, income tax relief, consumer reporting protection, and eviction protection for residential property owners, tenants, and other consumers, economically impacted during time of coronavirus disease 2019 pandemic.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced) 2024-01-09 - Introduced in the Senate, Referred to Senate Community and Urban Affairs Committee [S1098 Detail]
Download: New_Jersey-2024-S1098-Introduced.html
STATE OF NEW JERSEY
221st LEGISLATURE
PRE-FILED FOR INTRODUCTION IN THE 2024 SESSION
Sponsored by:
Senator BRITNEE N. TIMBERLAKE
District 34 (Essex)
SYNOPSIS
Provides mortgage payment relief, income tax relief, consumer reporting protection, and eviction protection for residential property owners, tenants, and other consumers, economically impacted during time of coronavirus disease 2019 pandemic.
CURRENT VERSION OF TEXT
Introduced Pending Technical Review by Legislative Counsel.
An Act concerning protections for residential property owners and tenants during emergency circumstances and amending P.L.2020, c.1.
Be It Enacted by the Senate and General Assembly of the State of New Jersey::
1. (New section) The Legislature finds and declares that:
a. The social distancing measures and associated economic pause, that have been necessary to combat the COVID-19 pandemic, have also forced many New Jersey residents to endure job losses and prolonged depletions of income;
b. As of May 8, 2020, the unemployment rate of the United States exceeds 14 percent, and is widely expected to grow higher in the coming weeks;
c. The residents of New Jersey have not been able to avoid suffering as a result of the COVID-19 pandemic, as the State is widely reported to have the second highest COVID-19-related death rate in the nation, and the economic impact on many State residents appears to be similarly catastrophic;
d. This unprecedented situation has made the timely payment of mortgages, rent, and other bills impossible for many State residents; and
e. It is, therefore, necessary and in the public interest for the Legislature to enact temporary measures to protect the State's homeowners, residential tenants, student loan borrowers and other vulnerable consumers from foreclosure, eviction, and consumer reporting injustices that are in danger of resulting from this unprecedented emergency.
2. (New section) As used in P.L. , c. (C. ) (pending before the Legislature as this bill):
"Creditor" means a person or entity that holds or controls, partially, wholly, indirectly, directly or in a nominee capacity, a mortgage loan securing an owner-occupied residential property, including, but not limited to, an originator, holder, investor, assignee, successor, trust, trustee, nominee holder, or mortgage servicer as defined in section 2 of P.L.2019, c.65 (C.17:16F-28).
"Emergency period" means the period during which a public health emergency exists as declared by the Governor in Executive Order No. 103 of 2020, as extended, and the 60 days following the conclusion of this period.
"Impacted homeowner" means an owner or mortgagor of title to a residential property, which serves as such person's primary residence
or as the residence of the owner's tenant, which the impacted homeowner understands to be the tenant's primary residence, and who qualifies for a mortgage forbearance pursuant to section 3 of P.L. , c. (C. ) (pending before the Legislature as this bill).
"Impacted tenant" means a tenant of a residential property who has suffered a substantial reduction of income, became unemployed, or suffered increased costs due to funeral expenses or expenses incurred in necessary child care resulting from the closure of schools or caring for family members who are ill, due to the COVID-19 pandemic or quarantined due to suspected exposure to COVID-19, or the Public Health Emergency or State of Emergency declared in response thereto, as attested by the affidavit for tenant eligibility, pursuant to paragraph (1) of subsection a. of section 6 of P.L. , c. (pending before the Legislature as this bill). Impacted tenant shall not include any tenant whose household income, after any hardship, exceeds 100 percent of the Area Median Income as published by the United States Department of Housing and Urban Development for the county in which the residential dwelling is located or any tenant who possesses one or more bank accounts that collectively contain reserves equaling six months' or more of the tenant's gross income in 2019.
"Landlord" means any person, or agent or assignee thereof, who rents or leases or offers to rent or lease, for a term of at least one-month, dwelling units, except dwelling units in hotels, motels or other guest houses serving transient or seasonal guests.
"Mortgage forbearance" or "forbearance" means a period during which obligations for mortgage principal and interest payments are suspended.
"Non-essential eviction" means an eviction for nonpayment or habitually late payment of rent.
"Residential property" means a property located in the State rented or owned for residential purposes; provided, however, that residential property shall be limited to the principal residence of a person or a residential health care facility. "Residential property" shall not include a residence other than a primary residence of a homeowner or tenant; residential property taken in whole or in part as collateral for a commercial loan; or a property subject to condemnation or receivership.
3. (New section) a. During the emergency period, a creditor shall grant a mortgage forbearance to an impacted homeowner if the impacted homeowner submits a written request to the mortgage servicer affirming the following:
(1) the impacted homeowner has suffered a negative financial impact resulting from COVID-19 or the Public Health Emergency or State of Emergency declared in response thereto, including but not limited to a financial hardship from a reduction in hours or loss of employment, loss of income or increased costs incurred in necessary child care resulting from the closure of schools or caring for family members who are ill due to COVID-19 or quarantined due to a suspected exposure to COVID-19, or for funeral costs due to COVID-19;
(2) the gross household income of the homeowner, after hardship, does not exceed 150 percent of the area median income, as defined for New Jersey in guidelines published annually by the United States Department of Housing and Urban Development, unless this requirement for eligibility is waived by the mortgage lender; and (3) if the impacted homeowner possesses one or more bank accounts, those bank accounts collectively contain less than six months' reserves of the impacted homeowner's gross household income for 2019. The creditor may require the impacted homeowner to provide a cash asset certification to demonstrate compliance with this paragraph.
b. Upon receipt of a written request or verbal authorization for a mortgage forbearance from an impacted homeowner pursuant to subsection a. of this section, a creditor shall provide to the impacted homeowner a mortgage forbearance and confirmation of that forbearance in writing. No additional documentation shall be required from the impacted homeowner by the creditor other than the written request under subsection a. of this section. The minimum initial mortgage forbearance period of an impacted homeowner shall be 90 days. An impacted homeowner may request, and shall be granted, a subsequent forbearance period of at minimum 90 days, for a total of at minimum 180 days. A creditor shall not be prohibited from offering a more extended forbearance period. Fees, penalties, or interest, including attorney's fees beyond the amounts scheduled and calculated as if the mortgagor made all contractual payments on time and in full under the terms of the mortgage contract, shall not be assessed or accrue during and as a result of a mortgage forbearance granted pursuant to this section. Nothing in this section shall be construed to impact property tax and insurance obligations of an owner related to any real property in the State. A mortgagee that grants a mortgage forbearance pursuant to this section shall encourage owners to seek out United States Department of Housing and Urban Development certified housing counseling and shall provide to the property owner confirmation of the approval of the forbearance, information concerning the process for forbearance, and information on how to request a subsequent forbearance.
c. (1) Consistent with the provisions of 15 U.S.C. s.1681s-2(a)(1)(F), a creditor shall not furnish negative mortgage payment information to a debt collector or credit reporting agency related to mortgage payments subject to a mortgage forbearance under this section.
(2) In response to a complaint to the Attorney General from an impacted homeowner, or on the Attorney General's independent initiative, the Attorney General may bring an action alleging a creditor has violated the provisions of this subsection. Upon a finding that non-compliance by a creditor with this section has occurred, a court of competent jurisdiction may:
(a) order the non-compliant creditor to retract the debt reported to the collection or credit reporting agency, bureau, or data collection facility;
(b) impose a fine on the non-compliant creditor, not to exceed $5,000 per violation;
(c) order the non-compliant creditor to pay a reasonable counsel fee in connection with an impacted homeowner whose debt has been reported to a collection or credit reporting agency, bureau, or data collection facility;
(d) provide a copy of the order immediately at the request of and at no cost to the impacted homeowner;
(e) order the non-compliant creditor to take such steps as are necessary, within 30 days of the order, to rehabilitate the credit record of an impacted homeowner, with an exact copy provided at no cost to the homeowner of the efforts made in that regard; and
(f) order the non-compliant creditor to pay an award of damages to the impacted homeowner not to exceed 25 percent of the debt attempted to be collected or reported by the non-compliant creditor to the collection or credit reporting agency, bureau, or data collection facility, the minimum award being $350.
d. During the emergency period and during any period of mortgage forbearance granted pursuant to this section, a creditor shall not, for the purposes of foreclosure of a residential property that has received a forbearance that is not vacant, abandoned or otherwise subject to P.L.2003, c.210 (C.55:19-78 et seq.):
(1) send an impacted homeowner a notice of intention to foreclose pursuant to section 4 of P.L.1995, c.244 (C.2A:50-56); or
(2) otherwise initiate the foreclosure process.
A deadline or time period for action by a party to the foreclosure process for a residential property filed prior to the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill) shall be tolled until the end of the emergency period.
e. Notwithstanding the provisions of any law, rule, or regulation to the contrary, the repayment period of any mortgage subject to the forbearance established pursuant to this section shall be extended by the number of months the forbearance is in effect. The payments not made during the months of the forbearance shall instead be due on a monthly basis during the period constituting an extension of the mortgage, unless the property owner has chosen to make these payments earlier. During the time of the forbearance, and during the period constituting an extension of the mortgage, all terms and conditions of the original mortgage, except with regard to default and delinquency during forbearance, shall continue without modification, and there shall be no fees assessed, including attorney's fees, related to the forbearance or late payment, or penalty for early repayment. An impacted homeowner shall have the option to discontinue the mortgage forbearance at any time at the election of the impacted homeowner upon written consent and a written statement that they would have the rights provided herein and knowingly waive those rights.
f. An impacted homeowner denied a forbearance under this section by a creditor licensed by the Department of Banking and Insurance may file a complaint with the Department of Banking and Insurance. The department shall investigate the complaint and, if appropriate, shall order the creditor to grant a forbearance to the impacted homeowner pursuant to this section.
g. (1) To the extent required by the Administrative Director of the Courts, the creditor shall provide the docket numbers, party names, and property addresses as to any pending court actions involving any property granted a forbearance to the Superior Court Clerk's Office at least monthly.
(2) The creditor shall submit information on all forbearances that the creditor has provided within the State to the Department of Banking and Insurance on a monthly basis, or on any alternative schedule directed by the Department of Banking and Insurance, after removing all personally-identifiable information. This information shall be submitted in accordance with any specifications required by the Department of Banking and Insurance, and, to the extent required by the Department of Banking and Insurance, shall be deemed to be government records and subject to the provisions of P.L.1963, c.73 (C.47:1A-1 et seq.), commonly known as the open public records act.
h. Notwithstanding anything to the contrary in this section, to the extent that the application of any provision of this section would conflict with federal laws and guidelines, such provision shall not apply to, and does not affect, any mortgage loans made, insured, or securitized by any agency or instrumentality of the United States, any government sponsored enterprise, or a federal home loan bank, or the rights and obligations of any lender, issuer, servicer or trustee of such obligations, including servicers for the Government National Mortgage Association or other loans governed by the Coronavirus Aid, Relief, and Economic Security Act, Pub. L.116-136.
i. It shall be an unlawful discrimination in violation of the "New Jersey Law Against Discrimination," P.L.1945, c.169 (C.10:5-1 et seq.) for a creditor to discriminate in application of the provisions of this section on any basis protected by subsection g. of section 11 of P.L.1945, c.169 (C.10:5-12).
j. This section shall not be construed to prohibit a creditor from considering an oral or electronic request for a mortgage forbearance instead of a written request submitted pursuant to subsection a. of this section.
4. (New section) a. During the emergency period, a landlord or owner of a residential property shall not, for the purposes of a non-essential eviction for a residential property:
(1) terminate a tenancy;
(2) file a summary dispossess action; or
(3) send any notice, including a notice to quit, requesting or demanding that a tenant of a residential property vacate the premises.
b. (1) Upon the filing of a landlord-tenant complaint, the plaintiff landlord shall certify, on a form promulgated by the Administrative Director of the Courts, that the complaint is not seeking to evict an impacted tenant from the impacted tenant's primary residence due to nonpayment or habitually late payment of rent due during the emergency period, except where the impacted tenant has failed to repay rent due during the emergency period in accordance with a repayment plan entered pursuant to section 6 of P.L. , c. (C. ) (pending before the Legislature as this bill).
(2) No later than 60 days following enactment of P.L. , c. (C. ) (pending before the Legislature as this bill), the plaintiff landlord in any landlord-tenant action pending before the court on the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill) shall certify, on a form promulgated by the Administrative Director of the Courts, that the landlord-tenant complaint is not brought to evict an impacted tenant of the impacted tenant's primary residence due to nonpayment or habitually late payment of rent due during the emergency period, except where the impacted tenant has failed to repay rent due during the emergency period in accordance with a repayment plan entered pursuant to section 6 of P.L. , c. (C. ) (pending before the Legislature as this bill).
c. A deadline or time period for action by a party to a non-essential eviction for a residential property shall be tolled until the end of the emergency period.
d. Nothing in this section shall relieve a tenant from the obligation to pay rent or restrict a landlord's ability to recover rent consistent with the provisions of section 6 of P.L. , c. (C. ) (pending before the Legislature as this bill).
5. (New section) a. During the emergency period, a landlord shall not impose a late fee for non-payment of rent for a residential property that was due during the emergency period.
b. (1) Consistent with the provisions of 15 U.S.C. s.1681s-2(a)(1)(F), a landlord shall not furnish rental payment data to a debt collection or credit reporting agency related to the non-payment of rent during the emergency period, or shall report the rental payment as current. This paragraph shall not:
(a) apply to an impacted tenant's rent payments that remain due as the result of a payment missed prior to the effective date of Executive Order No. 106 of 2020, including payments held in escrow before that date; or
(b) limit the ability of a landlord to share information with the landlord's attorney or property management company, or to notice the tenant in compliance with Anti-Eviction Act, P.L.1974, c.49 (C.2A:18-61.1 et seq.).
(2) As a result of any record or information reflecting an impacted tenant's non-payment of rent during the emergency period, a landlord shall not:
(a) refuse to rent to an impacted tenant; or
(b) place, or disseminate an impacted tenant's information for the purpose of placing, an impacted tenant on a list for the use of other landlords.
c. In response to a complaint to the Attorney General from an impacted tenant, or on the Attorney General's independent initiative, the Attorney General may bring an action alleging a landlord has violated the provisions of subsection b. of this section concerning the furnishing of information to a collection or credit reporting agency. Regarding a first violation, the court shall provide the landlord with an opportunity to correct prior to imposing a penalty. Following the provision of this opportunity to correct any first violation, upon a finding that non-compliance by a landlord with subsection b. of this section has occurred, a court of competent jurisdiction may:
(1) order the non-compliant landlord to retract the report of debt provided to the collection or credit reporting agency, bureau, or data collection facility;
(2) impose a fine on the non-compliant landlord, not to exceed $500 for a first violation, $1,000 for a second violation, and $2,500 for each subsequent violation;
(3) order the non-compliant landlord to pay a reasonable counsel fee in connection with an impacted tenant whose debt has been reported to a collection or credit reporting agency, bureau, or data collection facility;
(4) provide a copy of the order immediately upon the request of the impacted tenant and at no cost to the impacted tenant;
(5) order the non-compliant landlord to take such steps as are necessary, within 30 days of the order, to rehabilitate the credit record of an impacted tenant, with an exact copy provided to the impacted tenant at no cost, of the efforts made in that regard; and
(6) if the impacted tenant is able to show actual damages that have resulted from a violation of this section, order the non-compliant landlord to pay an award of damages to the impacted tenant not to exceed 25 percent of the debt attempted to be collected or reported by the non-compliant landlord to the collection or credit reporting agency, bureau, or data collection facility, the minimum award being $350.
d. If a landlord furnishes rental payment data to a collection or credit reporting agency related to the non-payment of rent during the emergency period, but before the enactment of P.L. , c. (C. ) (pending before the Legislature as this bill), the landlord shall not be subject to the penalty provisions of this section, except for an order to retract the report pursuant to paragraph (1) of subsection c. of this section.
6. (New section) a. In order to avoid mass evictions and widespread homelessness following the conclusion of the moratorium on evictions required by section 4 of P.L. , c. (C. ) (pending before the Legislature as this bill), a landlord shall offer each tenant of the properties owned by the landlord, who has missed any partial or full rent payments prior to the end of the emergency period, the ability to enter into an agreement pursuant to subsection d. of this section, which shall be an addendum to the lease agreement, for the repayment of any partial or full rent payments not made during the emergency period, provided that this requirement shall not apply to an impacted tenant with one or more rent payments, including payments held in escrow, that remain due as the result of a payment missed prior to the effective date of Executive Order No. 106 of 2020. The offer shall be provided in writing by hand-delivery, certified mail, text message, or email.
(1) A tenant shall not accept an offer from a landlord pursuant to this subsection if:
(a) the tenant is not an impacted tenant;
(b) the tenant's gross household income after hardship exceeds 100 percent of the area median income, as defined for New Jersey in guidelines published annually by the United States Department of Housing and Urban Development, unless the landlord makes an exception;
(c) the tenant possesses one or more bank accounts that collectively contain reserves equaling six months' or more of the tenant's gross household income for 2019 unless the landlord makes an exception; or
(d) the tenant has not attested by affidavit to compliance with this paragraph.
(2) The landlord may bring a cause of action against a tenant in a court of competent jurisdiction to enforce a violation of paragraph (1) of this subsection.
(3) To prevent a landlord from losing their primary home in a foreclosure due to COVID-19 economic hardship, owners of owner-occupied properties with four or less units are exempt from having to enter into a rent repayment plan with their impacted tenant only if after the owner completed an application for a mortgage forbearance, but was denied forbearance as defined in this bill from their creditor. Creditors covered in this bill shall not deny a landlord of an owner occupied property a mortgage forbearance if their tenants cannot pay rent; having impacted tenants means the landlord is also then negatively impacted.
(4) During the repayment period, a landlord shall not impose any fees for rent payments, as defined in the lease agreement, either written or oral, not made during the emergency period.
b. The Department of Community Affairs shall, as soon as practicable following the effective date of P.L. , c. (pending before the Legislature as this bill), prepare and make available on its Internet website a statement of the rights and responsibilities of impacted tenants and landlords for the repayment of missed rent payments pursuant to this section and an explanation of, and model template for, (1) the default repayment plans available pursuant to subsection d. of this section and (2) an affidavit that an impacted tenant shall use to demonstrate compliance with the definition of an impacted tenant, provided pursuant to section 2 of P.L. , c. (pending before the Legislature as this bill), and with paragraph (1) of subsection a. of this section. This statement and templates shall be printed in the English, Spanish, Arabic, French, Russian, Korean, Chinese, and Vietnamese languages. Every landlord shall distribute one copy of the statement and templates prepared and made available pursuant to this subsection to each of their tenants within 30 business days after it has been made available by the department, and landlords may provide notice of an unpaid balance, but may not demand payment of unpaid rent until after the statement and templates have been distributed in accordance with this subsection. If a landlord fails to comply with this subsection, this failure may be used by an impacted tenant as an affirmative defense to an action seeking the recovery of rent, or to a landlord-tenant complaint seeking a judgment for possession against the impacted tenant, if brought by the landlord to recover rent due during the emergency period.
c. (1) Within 30 business days following the conclusion of the emergency period, a landlord shall calculate all partial or full rent payments legally owed and not made during the emergency period by each impacted tenant liable for rent repayment pursuant to subsection a. of this section. After determining the amount of the missed payments and applying all credits, if any, due to the impacted tenant, the landlord shall provide each impacted tenant with a written notice by hand-delivery, certified mail, text message, or e-mail, using the template to be prepared and made available on its website by the department, of the amount owed by the impacted tenant in a form that specifies, in detail, the amount claimed to be due and an itemization of all credits to which the impacted tenant is entitled. All amounts shall be legal and in compliance with all applicable laws, including local rent control ordinances.
(2) If the impacted tenant does not agree with the amount claimed due, the notice shall provide that the impacted tenant shall notify the landlord within 25 days after the date on which the rent and arrearage repayments are to commence; provided, however, that the impacted tenant shall still begin repayment of missed rent pursuant to the repayment agreement. The impacted tenant may assert any and all additional objections to the amount claimed due, including payment by the impacted tenant or by others on behalf of the impacted tenant.
(3) If a landlord-tenant complaint seeking judgment for possession is filed, the court shall offer the parties the opportunity to settle the case. Both parties must voluntarily agree to participate in the settlement conference or mediation and must voluntarily agree to any resulting settlement.
(4) If the plaintiff landlord fails to demonstrate in the landlord-tenant case pending with the court the correctness of the amount assessed of rent due and owing by the impacted tenant, then the court shall order that the landlord shall refund any incorrectly assessed amount paid by the impacted tenant. Upon a finding of a violation of this subsection by the landlord, the court may also order the landlord to pay to the tenant a penalty of 20 percent of the difference between the amount requested by the landlord and the amount actually owed, to be used as a credit towards future rent.
d An impacted tenant and a landlord shall enter into a written agreement for any unpaid rent during the emergency period. If a landlord and impacted tenant are unable to reach an agreement, or if the agreement is deemed to be unaffordable by the tenant within 30 days following the tenant's receipt of the notification of rights pursuant to subsection b. of this section, any unpaid rent during the emergency period shall be paid in accordance with the default repayment plan that shall provide an impacted tenant with six months to repay every one month owed in rent that was unpaid, whether in full or in part, during the emergency period; with all back rent owed and paid in full by the last day of the 30th month of the repayment period. Payments shall be due in equal monthly installments during the repayment period. If any rent that went unpaid during the emergency period continues to be unpaid despite an impacted tenant's compliance with this repayment schedule, then that remaining unpaid rent shall be due in full on the last day of the 30th month of the repayment period . The surrender of property by the impacted tenant shall not relieve the impacted tenant from the obligation to pay any rent missed during the emergency period or restrict a landlord's ability to recover such rent.
e. An agreement entered into pursuant to subsection d. of this section shall be null and void upon full payment of the monies stipulated in the agreement. Nothing in this section shall prohibit a landlord from filing an action for eviction for the failure to pay rent in accordance with a repayment plan in effect pursuant to subsection d. of this section after the eviction moratorium period required by section 4 of P.L. , c. C. ) (pending before the Legislature as this bill) has ended.
f. Any rent or rent escrow payments made to the landlord for or on behalf of an impacted tenant by other entities, including government agencies, non-profit organizations, or in any other manner, shall be credited against the amount due from that impacted tenant.
g. It shall be an unlawful discrimination in violation of the "New Jersey Law Against Discrimination," P.L.1945, c.169 (C.10:5-1 et seq.) for a landlord to discriminate in application of the provisions of this section on any basis protected by subsection g. of section 11 of P.L.1945, c.169 (C.10:5-12).
7. (New section) a. Notwithstanding the provisions of P.L.1967, c.265 (C.46:8-19 et seq.) or any other law or regulation to the contrary, upon written request from a tenant, including electronic communication, money or other forms of security deposited or advanced in accordance with P.L.1967, c.265 (C.46:8-19 et seq.), including the tenant's portion of the interest, earnings, or both, accumulated thereon, shall be applied to or credited towards rent payments due or to become due from the tenant during the Public Health Emergency established in Executive Order No. 103 of 2020, and any extension thereof, and during the 60 days after the Public Health Emergency, as extended, terminates.
b. When a tenant applies money or other forms of security deposited or advanced, or interest or earnings accumulated thereon, to pay rent pursuant to subsection a. of this section, the following additional provisions shall apply for the duration of the tenant's current contract, lease, or license agreement:
(1) The landlord may recoup from the tenant any monies the landlord expended that would have been reimbursable by the money or other forms of security deposited or advanced by the tenant, or interest or earnings thereon, at the time that reimbursement from such money, security, interest, or earnings would have taken place; and
(2) The tenant shall otherwise be without obligation to deposit or advance further money or forms of security relating to the current contract, lease, or license agreement; provided, however, if the tenant and landlord extend or renew their contract, lease, or license agreement following the effective date of P.L. , c. (pending before the Legislature as this bill), then the tenant shall be obligated to replenish the money or forms of security required under the contract, lease, or license agreement in full on or before the last day of the sixth month next following the end of the Public Health Emergency established by Executive Order No. 103 of 2020, and any extension thereof, or on the date on which the current contract, lease, or license agreement is extended or renewed, whichever is later.
c. Use of money or other forms of security deposited or advanced in accordance with P.L.1967, c.265 (C.46:8-19 et seq.), including the tenant's portion of the interest, earnings, or both, accumulated thereon, for the purposes set forth in subsection a. of this section shall not be considered a violation of P.L.1967, c.265 (C.46:8-19 et seq.).
d. A landlord or tenant who fails to comply with the provisions of subsections a. or b. of this section shall be subject to the penalties set forth in section 7 of P.L.1967, c.265 (C.46:8-25).
8. Section 1 of P.L.2020, c.1 (C.2A:18-59.3) is amended to read as follows:
1. a. Notwithstanding any other law to the contrary, whenever a Public Health Emergency, pursuant to the "Emergency Health Powers Act," P.L.2005, c.222 (C.26:13-1 et seq.) [, or a State of Emergency, pursuant to P.L.1942, c.251 (C.App.A.9-33 et seq.), or both,] has been declared by the Governor and is in effect, the Governor may issue an executive order to declare that a lessee, tenant, homeowner or any other person shall not be removed from a residential property as the result of an eviction or foreclosure proceeding. This executive order shall remain in effect for no longer than two months following the end of the Public Health Emergency [or State of Emergency]. An executive order issued pursuant to this subsection may be adjusted by a subsequent executive order.
b. Eviction and foreclosure proceedings may be initiated or continued during the time of an executive order issued pursuant to this section [, but enforcement] , unless provided pursuant to a subsequently-enacted statute, or in an executive order issued pursuant to subsection a. of this section, that eviction actions may not be initiated or continued for nonpayment or habitually late payment of rent during a period of time overlapping that of the initial executive order. Enforcement of all judgments for possession, warrants of removal, and writs of possession shall be stayed during this period if the Governor has issued an executive order prohibiting certain removals from residential property pursuant to subsection a. of this section, unless the court determines on its own motion or motion of the parties that enforcement is necessary in the interest of justice.
c. Sheriffs, court officers, and their agents shall refrain from acting to remove individuals from residential properties through the eviction or foreclosure processes during the time of an executive order issued by the Governor prohibiting certain removals from residential property pursuant to subsection a. of this section, unless the court determines on its own motion or motion of the parties that removal is necessary in the interest of justice.
d. As used in this section, "residential property" means any property rented or owned for residential purposes, including, but not limited to, any house, building, mobile home or land in a mobile home park, or tenement leased for residential purposes, but shall not include any hotel, motel, or other guest house, or part thereof, rented to a transient guest or seasonal tenant, or a residential health care facility.
(cf: P.L. 2020, c.1, s.1)
9. (New section) a. Recognizing that housing developments for low- and moderate-income individuals are likely to be financially impacted by the COVID-19 pandemic, there is hereby established within the New Jersey Housing and Mortgage Finance Agency a "COVID-19 Impact Fund."
b. Proceeds of the fund may be used:
(1) to maintain mortgage payments and related fees and escrows owed to the New Jersey Housing and Mortgage Finance Agency for properties which are approved for mortgage forbearance or otherwise materially impacted by the impact of COVID-19; and
(2) in cases where the value of the Low-Income Housing Tax Credit has been reduced due to the impact of the public health crisis caused by the COVID-19 pandemic, to close the financing gap caused by the pricing drop and ensure that the production of affordable housing can continue.
c. The Executive Director of the New Jersey Housing and Mortgage Finance Agency shall be permitted to petition the Commissioner of Community Affairs to transfer funds from the "New Jersey Affordable Housing Trust Fund," established pursuant to section 20 of P.L.1985, c.222 (C.52:27D-320), to the "COVID-19 Impact Fund." Any petition shall demonstrate the agency's need for the funding. If the petition is approved, the executive director and the commissioner shall enter into a memorandum of understanding governing the amount of the transfer, the date of the transfer, and any additional conditions of the funds being transferred to the "COVID-19 Impact Fund."
10. (New section) a. A taxpayer who is a landlord for residential property, with the exception of a landlord of a multiple dwelling of more than 10 dwelling units, shall be allowed a credit against the tax otherwise due for the taxable year under the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., in an amount equal to 50 percent of the amount of rent that one or more impacted tenants do not pay in a taxable year during the emergency period, for which the landlord permanently forgives that impacted tenant or tenants from paying. A permanent forgiveness of unpaid rent may be asserted to obtain a tax credit pursuant to this section only if notice of the forgiveness has been provided in writing to the tenant, along with a written certification that the unpaid rent shall not be asserted as grounds for any legal action, including but not limited to an action to: (1) evict or otherwise dispossess the tenant of the property; or (2) obtain the unpaid rent through a monetary judgment action.
b. The order of priority of the application of the credit allowed pursuant to this section and any other credits allowed pursuant to the "New Jersey Gross Income Tax Act" N.J.S.54A:1-1 et seq. for a taxable year shall be as prescribed by the director. The amount of the credit applied under this section against the tax imposed for a taxable year, together with any other credits allowed by law, shall not reduce the tax liability to an amount less than zero. The amount of unused credit allowable under this section may be carried forward, if necessary, to the three taxable years following the taxable year for which the tax credit is allowed.
c. A business entity that is classified as a partnership for federal income tax purposes shall not be allowed the credit directly, but the amount of credit of a taxpayer in respect of a distributive share of partnership income shall be determined by allocating to the taxpayer that proportion of the credit acquired by the partnership that is equal to the taxpayer's share, whether or not distributed, of the total distributive income or gain of the partnership for its taxable year ending within or with the taxpayer's taxable year. A taxpayer that is a New Jersey S corporation shall not be allowed the credit directly, but the amount of credit of a taxpayer in respect of a pro rata share of S corporation income shall be determined by allocating to the taxpayer that proportion of the credit acquired by the New Jersey S corporation that is equal to the taxpayer's share, whether or not distributed, of the total pro-rata share of S corporation income of the New Jersey S corporation for its privilege period ending within or with the taxpayer's taxable year.
d. The Director of the Division of Taxation in the Department of the Treasury is authorized to adopt rules and regulations in accordance with the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.) and prescribe forms as necessary to implement this section.
11. (New section) It shall be an unlawful discrimination in violation of the "New Jersey Law Against Discrimination," P.L.1945, c.169 (C.10:5-1 et seq.) for a creditor or landlord to discriminate in application of the provisions of this act on any basis protected by subsection g. of section 11 of P.L.1945, c.169 (C.10:5-12).
12. This act shall take effect immediately and shall apply retroactively to rent and mortgage payments missed subsequent to March 9, 2020.
STATEMENT
This bill would provide protections to certain homeowners, tenants, and landlords during the COVID-19 pandemic emergency period. Under the bill, "emergency period" means the period during which a public health emergency exists as declared by the Governor in Executive Order No. 103 of 2020, as extended, and the 60 days following the conclusion of this period.
The bill provides that, during the emergency period, a creditor is required to grant a mortgage forbearance to an impacted homeowner if the impacted homeowner submits a written request to the mortgage servicer affirming the following:
(1) the impacted homeowner has suffered a substantial reduction of income resulting from COVID-19 or the Public Health Emergency or State of Emergency declared in response thereto, including a financial hardship from a reduction in hours or loss of employment, or increased costs incurred in necessary child care resulting from the closure of schools or caring for family members who are ill due to COVID-19 or quarantined due to a suspected exposure to COVID-19, or for funeral costs due to COVID-19;
(2) the gross household income of the homeowner does not exceed 150 percent of the area median income after hardship, unless this requirement for eligibility is waived by the mortgage lender; and
(3) the impacted homeowner's bank accounts collectively contain less than six months' reserves of the impacted homeowner's gross household income for 2019.
Upon receipt of a request for a mortgage forbearance from an impacted homeowner, the bill requires a creditor to provide to the impacted homeowner with a mortgage forbearance and confirmation of that forbearance in writing.
The minimum initial mortgage forbearance period of an impacted homeowner is to be 90 days. An impacted homeowner may request, and is to be granted, a subsequent forbearance period of at minimum 90 days, for a total of at minimum 180 days. Fees, penalties, or interest, including attorney's fees, shall not be assessed or accrue during and as a result of a mortgage forbearance.
Consistent with federal law, the bill provides that a creditor shall not furnish negative mortgage payment information to a debt collector or credit reporting agency related to mortgage payments subject to a mortgage forbearance under the bill. In response to a complaint to the Attorney General from an impacted homeowner, the Attorney General may bring an action alleging a creditor has violated this prohibition.
Under the bill, the repayment period of any mortgage subject to the forbearance would be extended by the number of months the forbearance is in effect. The payments not made during the months of the forbearance would instead be due on a monthly basis during the period constituting an extension of the mortgage, unless the property owner chooses to make these payments earlier.
An impacted homeowner denied a forbearance under the bill by a creditor licensed by the Department of Banking and Insurance ("DOBI"), and not a State- or nationally-chartered financial institution, may file a complaint with DOBI. The department would be required to investigate the complaint and, if appropriate, would order the creditor to grant a forbearance to the impacted homeowner.
The bill also provides that, prior to the end of the emergency period, a landlord or owner of a residential property would not, for the purposes of a residential eviction for nonpayment or habitually late payment of rent, defined as a "non-essential eviction":
(1) terminate a tenancy;
(2) file a summary dispossess action; or
(3) send any notice, including a notice to quit, requesting or demanding that a tenant of a residential property vacate the premises.
The bill would further require that, upon the filing of a landlord tenant complaint, the plaintiff landlord would be required to certify that the complaint is not seeking to evict an impacted tenant of the tenant's primary residence due to nonpayment or habitually late payment of rent due during the emergency period, except where the impacted tenant has failed to repay rent due during the emergency period in accordance with a repayment plan entered in compliance with the bill. No later than 60 days following enactment of the bill, the plaintiff landlord in any landlord/tenant action pending before the court would also be required to certify that the landlord-tenant complaint is not brought to evict an impacted tenant of the impacted tenant's primary residence due to nonpayment or habitually late payment of rent due during the emergency period, unless the impacted tenant has failed to repay rent due during the emergency period in accordance with a repayment plan entered in compliance with the bill. However, rent due from a period prior to the emergency period is not to restrict a tenant from accessing the protections provided under the bill to other impacted tenants, so long as the payments has subsequently was made.
Consistent with federal law, a landlord is required not to furnish rental payment data to a collection or credit reporting agency related to the non-payment of rent during the emergency period. The bill further prohibits landlords from refusing to rent to a tenant or submit the tenant's information for placement on a list for the use of other landlords because of any record or information reflecting the tenant's non-payment of rent during the emergency.
Under the bill, in response to a complaint to the Attorney General from an impacted tenant, the Attorney General may bring an action alleging a landlord has violated prohibition on the furnishing of information to a collection or credit reporting agency. However, if a landlord furnishes rental payment data to a collection or credit reporting agency related to the non-payment of rent during the emergency period, but before the enactment of this bill, then the landlord would not be subject to this penalty provision, except for an order to retract of the report.
Additionally, the bill provides that, in order to avoid mass evictions and widespread homelessness following the conclusion of the moratorium on evictions required under the bill, a landlord shall offer each tenant who has missed any partial or full rent payments prior to the end of the emergency period the ability to enter into an agreement, which would be an addendum to the lease agreement, for the repayment of any partial or full rent payments not made during the emergency period, provided the tenant's rent payments were current including payments held in escrow as of the effective date of Executive Order No. 106 of 2020. The bill also establishes an income tax credit for certain landlords who permanently forgive a portion of rent unpaid during the emergency period.
The bill prohibits a tenant from accepting an offer from a landlord if the tenant's gross household income exceeds 100 percent of the area median income after hardship unless the landlord makes an exception; or the tenant possesses one or more bank accounts that collectively contain reserves equaling six months' or more of the tenant's gross household income for 2019.
To prevent a landlord from losing their primary home in a foreclosure due to COVID-19 economic hardship, the bill would exempt owners of owner-occupied properties with four or less units from having to enter into a rent repayment plan with their impacted tenant if after the owner has completed an application for a mortgage forbearance, but is denied the forbearance. Creditors covered in this bill would be prohibited from denying a landlord of an owner-occupied property a mortgage forbearance if their tenants cannot pay rent.
During the repayment period, a landlord would be prohibited from imposing any late fees or any other fees, including attorney's fees, for rent payments not made during the emergency period.
Additionally, the bill requires the Department of Community Affairs to prepare and make available on its Internet website a statement of the rights and responsibilities of impacted tenants and landlords for the repayment of missed rent payments and an explanation of, and model template for, the default repayment plans available pursuant to the bill. This statement and templates shall be printed in the English, Spanish, Arabic, French, Russian, Korean, Chinese, and Vietnamese languages. Under the bill, not later than 30 days after the statement is made available by the department, every landlord is required to distribute one copy of the statement and templates prepared and made available to each of their impacted tenants within 10 business days after it has been made available by the department, and landlords may not demand payment of unpaid rent until after the statement and templates have been distributed to each impacted tenant. If a landlord fails to comply with this distribution requirement, this failure may be used by the impacted tenant as an affirmative defense to an action seeking the recovery of rent, or to a landlord-tenant complaint seeking a judgment for possession against the impacted tenant, if brought by the landlord to recover rent due during the emergency period.
The bill provides that, within 10 business days following the conclusion of the emergency period, a landlord is required to calculate all partial or full rent payments legally owed and not made during the emergency period by each impacted tenant liable for rent repayment pursuant to the bill. After determining the amount of the missed payments and applying all credits, if any, due to the impacted tenant, the landlord is required to provide each impacted tenant with a written notice, using the template to be prepared and made available on its website by the department, of the amount owed by the impacted tenant in a form that specifies, in detail, the amount claimed to be due and an itemization of all credits to which the impacted tenant is entitled. All amounts shall be legal and in compliance with all applicable laws, including local rent control ordinances.
If the impacted tenant does not agree with the amount claimed due, the notice shall provide that the impacted tenant shall notify the landlord within 25 days after the date on which the rent and arrearage repayments are to commence; provided, however, that the impacted tenant shall still begin repayment of missed rent pursuant to the repayment agreement. If the landlord fails to demonstrate the correctness of the amount assessed of rent due and owing by the impacted tenant, then the landlord shall refund any incorrectly assessed amount paid by the tenant plus a penalty of 20 percent of such amount within 30 days.
The bill would require an impacted tenant and landlord to enter into a written agreement for any unpaid rent during the emergency period. If the landlord and impacted tenant are unable to reach an agreement, or if the agreement is deemed to be unaffordable by the tenant, the bill would require any unpaid rent during the emergency period to be paid through a default repayment plan. The default repayment plan would provide an impacted tenant with six months to repay each month's-worth of rent that was unpaid during the emergency period. However, if this schedule would take over 30 months to repay, then the default repayment plan would require repayments for only 30 months, with each monthly repayment consisting of one-thirtieth of the total amount of rent left unpaid during the emergency period. that if any rent that went unpaid during the emergency period continues to be unpaid despite an impacted tenant's compliance with this repayment schedule, then that remaining unpaid rent would be due in full on the last day of the 30th month of the repayment period. A surrender of property by an impacted tenant would not relieve the impacted tenant from the obligation to pay any rent missed during the emergency period or restrict a landlord's ability to recover such rent.
The bill provides that it would be unlawful discrimination in violation of the "New Jersey Law Against Discrimination," P.L.1945, c.169 (C.10:5-1 et seq.) for a creditor or landlord to discriminate in application of the bill because of an impacted homeowners' or tenant's race, creed, color, national origin, ancestry, marital status, civil union status, domestic partnership status, pregnancy or breastfeeding, sex, gender identity or expression, affectional or sexual orientation, familial status, disability, liability for service in the Armed Forces of the United States, nationality, or source of lawful income used for rental or mortgage payments.
The bill would additionally require that, upon written request from a tenant, including electronic communication, money or other forms of security deposited would be applied to or credited towards rent payments due or to become due from the tenant during the emergency period.
When a tenant applies money or other forms of security deposited or advanced to pay rent, the following additional provisions would also apply for the duration of the tenant's current contract, lease, or license agreement:
(1) The landlord would be able to recoup from the tenant any monies the landlord expended that would have been reimbursable by the money or other forms of security deposited or advanced by the tenant, or interest or earnings thereon, at the time that reimbursement from such money, security, interest, or earnings would have taken place; and
(2) The tenant would otherwise be without obligation to deposit or advance further money or forms of security relating to the contract, lease, or license agreement. However, if the tenant and landlord extend or renew their contract, lease, or license agreement following the effective date of the bill, then the tenant would be obligated to replenish the money or forms of security required under the contract, lease, or license agreement in full on or before the end of the emergency period, or on the date on which the current contract, lease, or license agreement is extended or renewed, whichever is later.
The bill also would establish within the "New Jersey Housing and Mortgage Finance Agency" (HMFA) a "COVID-19 Impact Fund." Proceeds of the fund may be used: (a) to maintain mortgage payments and related fees and escrows owed to HMFA for properties which are approved for mortgage forbearance or otherwise materially impacted by the impact of COVID-19; and (b) in cases where the value of the Low-Income Housing Tax Credit has been reduced due to the impact of the public health crisis caused by the COVID-19 pandemic, to close the financing gap caused by the pricing drop and ensure that the production of affordable housing can continue. The Executive Director of HMFA would be permitted to petition the Commissioner of Community Affairs to transfer funds from the New Jersey Affordable Housing Trust Fund to the COVID-19 Impact Fund.
This bill would take effect immediately and would apply retroactively to rent and mortgage payments missed subsequent to March 9, 2020.
