Borough of Fort Lee, NJ
Bergen County
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Table of Contents
Table of Contents
[Amended 11-12-2009 by Ord. No. 2009-37]
A. 
A landlord may apply to the Rent Leveling Board (hereinafter "Board") for an increase in rent in excess of that permitted in Article II hereof upon a showing that:
(1) 
The increases permitted in Article II hereof will not yield a rental such that the landlord will earn a fair and reasonable return pursuant to § 324-20; or
(2) 
The increase is permitted due to capital improvements or additional services pursuant to §§ 324-28 and 314-29.
B. 
A tenant may file a complaint with the Board for:
(1) 
Relief declaring a rental increase void on grounds that it exceeds the maximum allowable rent increase permitted under this chapter;
(2) 
A decrease in rent on grounds that services for which the landlord previously received a rental increase pursuant to § 324-28 and 324-29 have been terminated or reduced since the increase was granted;
(3) 
A rebate from the landlord for any rent paid by the tenant to the landlord from the date the complaint is filed and for six years prior to the date of filing on grounds that any rental increases exceed the maximum allowable rent increase permitted under this chapter, or services for which the landlord previously received a rental increase pursuant to § 324-28, or 324-29 have been terminated or reduced since the increase was granted. For purposes of calculation of any rebate which may be ordered pursuant hereto, that calculation shall not predate or look back past the six-year statute of limitations set forth herein; or
(4) 
An assessment of penalties pursuant to § 324-9.
C. 
In determining whether to grant the relief provided for under this section, it shall be the landlord's burden to demonstrate, by a preponderance of the evidence, that:
(1) 
Where an application is filed pursuant to § 324-16A, the landlord is entitled to relief for the reasons provided for in this section; and
(2) 
Where a complaint is filed pursuant to § 324-16B, the tenant is not entitled to relief for the reasons provided for in this section.
[Amended 11-12-2009 by Ord. No. 2009-37]
Prior to filing an application pursuant to § 324-16;
A. 
A landlord-applicant shall notify the tenant by certified mail or by personal service (provided a receipt is obtained from the tenant or an affidavit of service is sworn to), which notice shall include, but not be limited to, the amount of increase applied for, if possible, and a statement that all documentation filed with the Board shall be available for inspection at the office of the Board.
B. 
A tenant-applicant shall notify the landlord by certified mail or by personal service (provided a receipt is obtained from the landlord or an affidavit of service is sworn to) of his or her intent to file an application pursuant to § 324-16 and, generally, the reasons(s) the tenant is seeking a reduction and/or rebate.
C. 
Proof of notice shall be filed along with any application to the Board. No application will be acted upon unless such proof is provided.
[Amended 11-12-2009 by Ord. No. 2009-37]
A. 
Immediately upon receipt of an application and proof of notice, the Board shall notify the tenant(s) and landlord of the scheduled hearing date.
B. 
If the subject of the application is an increase pursuant to § 324-16A(1), the landlord, upon receipt of the hearing date, shall post notice thereof in conspicuous locations within the premises, including but not limited to mail rooms, lobbies, elevators and laundry rooms.
[Amended 11-12-2009 by Ord. No. 2009-37]
A. 
For purposes of § 324-16A(1), the year of application shall be the calendar or fiscal year immediately succeeding the calendar or fiscal year last utilized by the landlord in maintaining his books and records, and it shall be the period of operation upon which the Board shall base its determination.
B. 
Except as provided below, no increase in rent may be collected by a landlord and no decrease in rent may be withheld by a tenant, where such increase or decrease, as the case may be, is the subject of an application, until granted by the Board. The Board shall not unreasonably delay the rendering of its determination of any application.
C. 
For purposes of § 324-16A(1), in the event the Board does not render a determination within four months of the filing of the landlord's application, 1/2 of the increased rentals sought shall, at the discretion of the landlord, be collected in accordance with this chapter and shall be subject to retroactive adjustment by the Board upon its determination. Such four-month period may be extended by written consent of the landlord. In the event the Board concludes that its delay in rendering a decision is caused by the landlord, the landlord shall be prohibited from commencing any collection of increased rentals sought until the Board renders its determination.
A landlord shall be entitled to an increase in rent under this section if said landlord is being deprived of earning a fair and reasonable return on his actual investment.
A. 
The Board shall make a determination regarding the landlord's investment in the subject premises and a fair return thereon. In computing the income necessary to achieve a fair return, the Board shall allow reasonable operating expenses, considering their useful life and debt service.
(1) 
The "useful life of an expense item" shall be defined as that number of years reasonably expected to pass before that same expense will again be incurred. The past history of the building, where applicable, shall be used as a guideline in determining useful life. Where the useful life of an expense item exceeds one year, such expense shall be prorated over the entire useful life of the expense item. When relief has been granted for an expense item having a useful life in excess of one year, and having a cost equal to a greater than 1% of the then-current roll, such increase shall be treated as a surcharge on the tenant's rent only for the period of the useful life of the expense item and shall thereafter terminate unless the same expense recurs. The surcharge shall not be part of the base rent. At the time of such recurrence, the newly calculated prorated expense may be added to the rent as a new surcharge as determined by the Rent Leveling Board over its then determined useful life.
(2) 
Debt service shall include interest, principal reduction and mortgage insurance premium, where applicable. In the event there has been a refinancing of prior mortgages, the Board shall review actual disposition of the proceeds of the refinancing as a part of its determination of investment and debt service. Depreciation is specifically excluded as an allowable expense. Real estate tax increases directly attributable to conversions of premises to a condominium or cooperative are specifically excluded as an allowable expense. The "landlord's investment" is hereby defined as the original cash investment at the time of purchase, less any withdrawals at the time of refinancing or at any other time. No inflation factor may be applied to such investment.
B. 
The Board shall use actual expenses for the period of relief insofar as it is known at the time of the filing of the application for relief. Where such actual costs are unknown, the Board shall project said unknown costs in accordance with the following formula:
The actual costs for the calendar or fiscal year of the landlord prior to the date of filing of the application for relief shall be multiplied by the Percentage Inflation Factor (PIF) which shall yield the allowable operating expense. The "PIF" is defined as the percentage change of the New York/Northeastern New Jersey Consumer Price Index available for the latest 12 consecutive months available at the time of filing of the application for relief.
C. 
As a part of the application for relief, a landlord shall submit to the Board its anticipated income for the period of relief, considering all automatic increases to base rent that may come due during said period. Anticipated income shall include, but not be limited to, income from residential rents, garage rents, additional facilities and laundry and vending commissions.
D. 
The Board shall deny all or a part of the relief requested where specific findings of fact support the conclusion that the landlord purchased the subject premises for an excessive price. Excessive purchase price is hereby defined as the purchase price such that at the time of purchase a reasonable investor could not expect to earn a fair return upon his investment.
E. 
The relief granted shall increase the actual income yielded by the subject premises to that income necessary to enable the landlord to earn a fair return upon his actual investment.
F. 
Wherever practicable, the Board shall require of the applicant professionally certified documentation of all pertinent financial data offered in support of an application under this section, except that the Board may exercise its reasonable discretion to waive this requirement if the cost to the applicant is deemed to outweigh the need for professional certification.
G. 
On all applications subsequent to a conversion, the Board shall singularly analyze each item of alleged increased expenses and disregard and disallow any items attributable to said conversion.
H. 
Any increase granted under this section shall be in lieu of and not in addition to any increase granted under Article II.
I. 
No increase granted pursuant to this section shall take effect until the Borough's construction official or designated representative, after a reasonable inspection of the premises, notifies the Board in writing that said premises is in substantial compliance with the Borough's maintenance code and State Uniform Construction Code.
J. 
No increase granted pursuant to this section shall take effect until the Borough's Tax Collector notifies the Board in writing that all property taxes are current, except for arrearages authorized by law, and any tax rebates due have been paid.
Notwithstanding anything to the contrary herein, no landlord shall be entitled to a percentage increase greater than that permitted under Article II hereof unless the average expense ratio of the landlord for the three years preceding the year immediately preceding the year of application is less than the expense ratio for the year immediately preceding the year of application. The expense ratio means reasonable and necessary operating expenses, as defined in § 324-20 hereof, divided by total income.
A. 
As soon as available, but not later than six months from the date of the filing of an application for increased rental, the landlord shall file with the Board a statement of operations setting forth its actual costs for the first six months of the year of application.
B. 
In the event the landlord provides the Board with its actual cost expense reflecting the first six months of the year of application, the Board may dispense with the review as provided for in this section.
C. 
The Board shall review the statement of operations, may hold public hearings and/or require the filing of additional data. Within two months of receipt of the statement of operations, the Board shall make such adjustments to the relief granted as is manifested by the actual six-month cost experience. The Board is not required to make any adjustments in the relief in the event that the actual six-month cost experience does not significantly differ from the reasonable and necessary operating expenses as determined by the Board heretofore. In the event the Board shall fail to make an adjustment within the two-month period, the original relief granted shall become final. In the event the landlord shall fail to file the statement of operations within the six-month period, the relief granted shall automatically terminate and base rent shall revert to the base rents in effect prior to the date of application. For good cause shown, the Board may extend the six-month filing period for an additional period not to exceed three months. Simultaneously with the filing of the statement of operations, the landlord shall notify the affected tenants of the filing. Notwithstanding anything contained in this section, the initial determination of the Board shall be deemed final for purposes of appeal.
D. 
Any increased or adjusted rental granted pursuant to § 324-20 and this section shall be subject to further and retroactive adjustment subsequent to distribution from an escrow fund established in the action entitled HELMSLEY, ET AL V. BOROUGH OF FORT LEE, ET AL.
The Board shall not grant an increased rental to a landlord upon more than one application for any one year.
[Amended 11-12-2009 by Ord. No. 2009-37]
From time to time, the Board may promulgate forms to be utilized whenever notice is required and may adopt such rules and regulations as are necessary to implement the intent of this article.
A. 
Upon submission of an application, and in addition to any fees established in § 324-37 hereof, the applicant shall be required to establish an escrow account with the Borough.
B. 
Upon receipt of an application for relief, the Board shall forthwith send a copy thereof to any professional experts retained to assist the Board in the processing of the application. Within five days of receipt, the professional experts shall submit to the Board an estimate of funds sufficient in amount to undertake the professional services to be rendered.
C. 
The applicant shall forthwith deposit such funds in the escrow account maintained by the Tax Collector of the Borough. The professional experts shall submit vouchers for all reasonable and necessary fees for the professional services rendered, which fees shall be paid from the escrow account in the manner prescribed by N.J.S.A. 40A:5-16 through 40A:5-18.
D. 
The professional expert shall, at the time of submission of any such voucher, forward a copy of same to the applicant. In the event that the applicant questions the reasonableness of any such voucher, the applicant shall, not later than five days after receipt of a copy of the voucher, make written protest of such voucher to the Board. In no event shall the Board authorize the payment of any voucher submitted pursuant to this section sooner than 10 days from its submission.
E. 
Any of the aforesaid moneys left in the escrow account upon completion of the application shall be returned to the applicant as soon as is practicably possible.
F. 
Should additional funds be required after the original funds are exhausted, such funds shall be necessary, in the judgment of the Board, shall be paid by the applicant to the Tax Collector of the Borough and placed in the escrow account.
G. 
The Board shall take no formal action on any application unless and until all escrow funds have been deposited with the Tax Collector of the Borough and any time limitations set forth in this chapter shall be extended until all such escrow funds are deposited with the Tax Collector.
No relief shall be effective as to any new or renewal tenancy relationship entered into after the effective date of this chapter unless the landlord, as part of a lease, has provided written and conspicuous notice of the pendency or possibility of any application for relief and for the six-month review provided for in § 324-22 hereof, which notice shall be separately signed by the tenant. In the event of an oral lease, the landlord, at the time of the creation or renewal of the tenancy relationship, shall provide written actual notice of the aforesaid.
Where a lease is due to expire within 60 days from the granting of any relief by the Board pursuant to § 324-20, the tenant shall have the right to remain in possession, without renewing the lease for a period not to exceed 90 days following the date of receipt of the Board's determination. The tenant shall pay the increased rentals granted by the Board until the premises are vacated.