[Adopted by Ord. No. 2-82; amended by Ord. No.
1990-17 (Sec. 12-2 of the 1987 Revised General Ordinances)]
As used in this article, the following terms shall have the
meaning indicated:
In the case of the renewal of leases, shall mean the starting
date of the last renewal term.
The actual legal monthly rental a tenant is paying for his apartment. At the time of adoption of this article, if the present monthly rent being paid by a tenant is $280 and the tenant is also paying a $20 a month tax surcharge, the existing legal rent for the next permissible increase will be $300, and the next permissible increase will be 80% of the increased percentage in CPI, as set forth in § 530-2B of this article, multiplied by this $300. Thereafter, the "existing rent" will be this $300 plus any CPI increases.
Shall mean and include the portion of a structure rented
or offered for rent for living and dwelling purposes to one individual
or family unit; together with all privileges, services, furnishings,
furniture, equipment, facilities, parking and garage facilities (whether
optional or mandatory), and improvements connected with the use or
occupancy of such portion of the property. Included are any building,
structure, mobile home or land used as a mobile home park, rented
or offered for rent to one or more tenants or family units. Exempt
from this chapter are motels, hotels and similar-type buildings; commercial
buildings; two or less housing units and housing structures of two
units or less. Housing units newly constructed and rented for the
first time are exempt under state statute, N.J.S.A. 2A:42-84.2, which
may provide a temporary exemption for newly constructed multiple dwellings
for a period of time not to exceed the time of amortization of any
initial mortgage loan obtained for the multiple dwelling or for 30
years following completion of construction, whichever is less. The
new construction exemption shall be in accordance with and per the
requirements of N.J.S.A. 2A:42-84.1 et seq., as amended, with new
construction defined per the Act under the phrase "constructed" to
mean constructed, erected or converted, but excludes rehabilitation
of premises rented previously for residential purposes without an
intervening use for other purposes for a period of at least two years
prior to conversion. Mere vacancy shall not be considered an intervening
use for the purposes of this chapter. Further exemption may exist
by the preemption or partial preemption by federal and state statutes
regulating residential rents, such as, but not limited to, dwellings
owned by HUD, financed under the federal programs and subject to regulations
promulgated by the Department of Housing and Urban Development and
housing regulated and provided under the New Jersey Housing Finance
Agency Law of 1967 (N.J.S.A. 55:14J).
[Amended 11-23-2021 by Ord. No. 2021-22]
Either certified mail, or regular mail or hand delivery acknowledged
by written receipt; or if the party refuses to claim or acknowledge
delivery, by regular mail.
The most recently available monthly "Consumer Price Index
for Urban Wage Earners and Clerical Workers, Northern New Jersey/New
York/Long Island Area" published by the Bureau of Labor Statistics,
United States Department of Labor.
[Amended 10-9-2006 by Ord. No. 2006-49]
That the housing space and dwelling are free from all heat,
hot water, elevator and all health, safety and fire violations as
well as 90% qualitatively free of all other violations of the Red
Bank Property Maintenance Code.[1]
A.
Establishment of rents between a landlord and a tenant in any dwelling
shall hereafter be determined by the provisions of this chapter. Any
rental increase in excess of that authorized by the provisions of
this chapter shall be void.
B.
Upon proper notice at the expiration of a lease or periodic tenancy,
no landlord may request or receive an increase greater than the percentage
increase, if any, in the Price Index published in the fourth month
prior to the month in which the lease or periodic tenancy terminates
over the Price Index published in the 16th month prior to the month
of termination. The final rent resulting from the imposition of any
increase provided hereunder shall be rounded to the nearest dollar.
The establishment of the rental increase allowed by this section shall
be subject to review by the Board at least every two years. No landlord
shall request or receive more than one rental increase per year per
housing space unless said housing space is decontrolled by vacancy.
By way of example, a rent increase computed in accordance with the
provisions of this section shall be computed as follows:
[Amended 10-9-2006 by Ord. No. 2006-49; 4-11-2012 by Ord. No. 2012-7]
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EXAMPLE
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Assuming a lease or periodic tenancy expires in April 2012,
use the CPI published in the fourth preceding month, or December of
2011 (a. below). Take the CPI published in the 16th month preceding
the month of termination, or December of 2010 (b. below) and subtract
b. from a. To calculate the percentage change in the CPI, take c.
and divide it by b. (d. below).
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Next, multiply the current rent (e. below) by d. to arrive at
the permissible CPI increase (f. below). Add f. and current rent (g.)
to arrive at new rent (h. below).
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a.
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CPI published in December 2011
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248.307
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b.
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CPI published in December 2010
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241.847
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c.
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Difference in CPI
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6.433
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d.
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Percentage change in CPI
6.433 divided by 241.874 =
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0.265
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e.
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$400.00 (current rent) =
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400.00
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f.
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Permissible increase is $400 multiplied by .0265 =
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$10.60
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g.
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Plus current rent
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+ 400.00
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h.
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New rent is (rounded to nearest dollar)
|
411.00
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A.
Any landlord seeking an increase in rent shall, at least 60 days prior to the effective date of the increase, notify the tenant of the calculations involved in computing the increase, including the Price Index at the respective dates as required in § 530-2 of this article, the allowable percentage increase, the allowable rental increase, the previous year's base rent, and a certification by the landlord that the dwelling is in substantial compliance with the municipal property maintenance codes. Failure to comply with this provision shall result in the rental continuing at old rent until proper notice is given.
B.
Any landlord seeking a rent increase, a lease renewal or an agreement
to extend or renew leases, shall provide notice of said action in
writing and in duplicate to the tenant at least 60 days prior to the
effective date of increase renewal, extension or other action and
further, that no tenant shall be required to sign any such rent increase
notice, renewal or agreement to extend or renew lease until such tenant
has had the opportunity to review the documents for a period of five
business days.
A.
In the event that a landlord cannot receive a fair return after having received the increase provided in § 530-2 of this article, he may appeal to the Rent Leveling Board for increased rental. The Board may grant a hardship rent increase to meet this requirement. The landlord must provide evidence according to the standards recognized at law for determining fair return. The Board will rely upon the recognized standard that a landlord should receive a net operating income of at least 40% of the gross annual income after deducting reasonable and necessary operating expenses, in the absence of an adequate showing that utilization of this standard will result in an unfair return to the landlord. Operating expenses shall not include mortgage principal or interest payments, depreciation or amortization. Any hardship increase granted by the Board will take the place of the annual CPI increase and shall be equally prorated to all units within the structure 30 days after the decision of the Rent Leveling Board, provided that no increase shall take effect with regard to any tenant who has a written lease until the expiration of the lease unless the lease provides otherwise.
B.
Landlord may seek additional surcharges for major capital improvements
or services. To qualify for a major improvement surcharge, claimant
must show a benefit to the tenant, in the form of improved lifestyle,
convenience, ease and/or security. The landlord must notify each tenant
of the total cost of the completed capital improvement or service,
the number of years of useful life of the improvement as claimed by
the landlord for purposes of depreciation for income tax purposes,
the cost of the improvement, the total number of square feet to the
dwelling or garden apartment complex, the total square feet occupied
by the tenant and the capital improvement surcharge he is seeking
from each tenant. The landlord seeking a capital improvement or service
surcharge shall appeal for the surcharge to the Rent Leveling Board,
who shall determine if the improvement is a major improvement and
if so, may permit such increase to take place and may direct that
the increase shall be collected in equal monthly payments spread over
the useful life of the capital improvement. If the increase is granted,
it shall not be considered rental and calculated in cost of living
increases. In any event, no increase authorized by this section shall
exceed 15% of the tenant's rent.
C.
Prior to any such appeal to the Board provided for in Subsections A and B of this section, a landlord must post in the lobby of each building, or if no lobby is present, in a conspicuous place in and about the premises a notice of the appeal setting forth the basis for the appeal. The notice must be posted for at least 15 days prior to the proposed date of appeal. The landlord shall also send a separate notice by certified mail/return receipt requested or personal service to each tenant at least 15 days prior to the proposed date of the appeal, which notice shall include a copy of the complaint filed or application, including all exhibits suppled in connection with the appeal, and the date, time and place that the appeal will be heard. Landlord must also submit to the Board a certification from the Borough's Construction Official or his/her authorized designee that the building and grounds are in substantial compliance with the municipal property maintenance code. The landlord must also provide proof to Board that there are no outstanding property taxes and water and sewer charges at the time of the appeal.
[Amended 11-6-2013 by Ord. No. 2013-23]
D.
As used in this section:
(1)
"Fair net operating income" shall mean the amount determined by subtracting
reasonable and necessary operating expenses from gross annual income,
which amount should not be less than 40% of the gross annual income.
(2)
"Gross annual income" shall mean all income resulting directly or
indirectly from the operation of a property or building such as all
rent received or collectable, including any rent from a less than
arm's length transaction, the landlord's share of interest on security
deposits, all earnings from commission, vending machines, late fees,
pet fees, parking fees, pool fees, key charges, finder's fees, amount
received from successful tax appeals, income from rebates, tax surcharges,
capital improvement surcharges, computed in accordance with the provisions
and limitations of this section.
(3)
"Reasonable and necessary operating expenses" includes all expenses
incurred and paid by a landlord necessary to the operation and maintenance
of the residential rental property during the period reflected in
the income computed in this section, excluding mortgage, principal
or interest payments, depreciation or amortization, computed with
these limitations:
(a)
Taxes shall be limited to amounts actually paid, including those
in escrow for appeal;
(b)
Repairs and maintenance shall be limited to arm's length transactions
and shall be reasonable and necessary. Cost of service contracts shall
be prorated over the period covered. Painting shall be prorated at
a period of three years for the interior of dwelling units or five
years for the exterior and common areas;
(c)
Purchase of new equipment shall be reflected and prorated over
the useful life of the item;
(d)
Legal and auditing expenses shall be limited to reasonable and
necessary costs of the operation of the property;
(e)
Management fees shall be limited to actual services performed,
such as the resident manager's salary, telephone expenses, postage,
office supplies, stationery, and the value of the apartment provided
if included in income. In no event shall management fees exceed 5%
of the first $50,000 of gross maximized annual income, 4 1/2%
of the next $25,000, 4% of the next $100,000, 3 1/2% of the next
$100,000, and 3% of any amount over $250,000;
(f)
Salaries not included in management fees shall be limited to
actual services performed and reasonable for similar position in the
area, including rental value, if included in income and expenses and
wages and benefits paid;
(g)
Advertising shall be actual costs that are reasonable to insure
occupancy only;
(h)
Utilities such as gas, electric, water and oil, shall derive
from arm's length transactions, and the landlord shall demonstrate
that all reasonable efforts to conserve energy and fuels have been
used;
(i)
Insurance costs shall derive from all arm's length transactions
prorated over item of policies;
(j)
The history of the income and expense shall be consistent with
the application or fully documented as to any changes.
E.
In any such application for a hardship increase, the landlord shall
specifically submit adequate proof to demonstrate:
(1)
He is an efficient operator of the residential rental property;
(2)
The residential rental property is in a safe and sanitary condition
and in substantial compliance with State Health Codes and the Property
Maintenance Code;
(3)
If, during consideration of a hardship increase, the Rent Leveling
Board shall determine that the landlord is not in substantial compliance
with any or all of the above, the Board may temporarily withhold further
consideration of the hardship increase application until the landlord
has corrected any such deficiency.
F.
If after a full hearing, the Rent Leveling Board shall determine
that the landlord is in full compliance with the provisions of this
article, it may permit a rental increase sufficient to reestablish
the 60% relation of reasonable and necessary operating expenses to
the 40% fair net operating income. Any increases shall be equally
prorated to all of the affected units within the structure or on the
property, upon 30 days notification after the Board has approved the
hardship increase.
G.
Reasonable rate of return.
(1)
In determining rent increases under this section, the Rent Leveling
Board shall consider whether the rent increase permitted by this section
provides the landlord with a just and reasonable rate of return. The
Rent Leveling Board shall be guided in its determination by whether
the rental increase will result in a rate of return which is sufficiently
high so as to:
(2)
If the Rent Leveling Board determines that the rental increase does not provide the landlord with a fair and reasonable rate of return under Subsection G(1)(a), (b) and (c),the Rent Leveling Board shall have the authority to appropriately adjust the rental increase to provide the landlord with a fair and reasonable rate of return.
A.
There is hereby created a Rent Leveling Board within the Borough
of Red Bank. The Board shall consist of five members plus two alternate
members, who shall be designated at the time of their appointment
as "Alternate No. 1" and "Alternate No. 2." The members of the Board
shall be appointed by the governing body, and their terms of office
shall be for a period of three years each, with each member serving
without compensation. An alternate member may participate in discussions
of the proceedings, but may not vote except in the absence or disqualification
of a regular member. A vote shall not be delayed in order that a regular
member may vote instead of an alternate member. In the event that
a choice must be made as to which alternate member is to vote, Alternate
No. 1 shall vote first.
[Amended 11-6-2013 by Ord. No. 2013-23; 3-11-2015 by Ord. No. 2015-4]
B.
Except as provided herein, the powers herein granted to the Rent
Leveling Board are advisory powers, and its actions shall be subject
to review by the governing body of the Borough as hereinafter provided.
The Rent Leveling Board is hereby granted, and shall have and
exercise, in addition to other powers herein granted, all the powers
necessary and appropriate to carry out and execute the purposes of
this chapter, including but not limited to the following:
A.
To issue and promulgate such rules and regulations as it deems necessary
to implement the purposes of this chapter, which rules and regulations
shall have the force of law until revised, repealed or amended by
the Board in the exercise of discretion, providing that such rules
are filed with the Borough Clerk.
B.
To supply information and assistance to landlords and tenants to
help them comply with the provisions of this chapter.
C.
To hold hearings and adjudicate applications from landlords for additional
rental and surcharges.
D.
To hold hearings and adjudicate applications and complaints from
tenants for reduced or improper rentals. The Board shall give both
landlord and tenant reasonable opportunity to be heard before making
any determination.
E.
To issue
a written advisory opinion as to any issue of jurisdiction with regard
to the Board hearing any future matter. Any application or request
for an advisory opinion regarding jurisdiction shall be made in writing
by a person with interest in the subject matter of the requested opinion.
Notice to other interested parties shall not be required by the applicant.
The opinion of the Board shall not be binding, but shall be advisory
in nature and provide guidance for future actions, if necessary.
[Added 4-11-2012 by Ord.
No. 2012-7]
F.
To honor
settlements reached between a landlord and a tenant regarding any
complaint filed before the Board by either party. However, the Board
will not judge such settlement except to the extent that it will not
honor any settlement agreement between a landlord and tenant in which
the tenant agrees to a rent higher than that allowed by this article.
The Board will honor written settlements or settlements on the record
before the Board on complaints that do not violate this article and
will allow enforcement of any such settlement before the Board.
[Added 4-11-2012 by Ord.
No. 2012-7]
[Amended 11-6-2013 by Ord. No. 2013-23]
Both the landlord and tenant may appeal in writing the findings
of the Board to the governing body within 20 days from the date of
the determination. The Council shall hold a hearing on the record
before the Board. The Council, through the Borough Clerk, shall provide
any appellant written notice of the hearing date at least 20 prior
to the hearing date. The appellant shall provided all interested parties,
including, in the case of an appeal by the landlord, all affected
tenants, with notice of hearing no later than 10 day prior to the
hearing date set by the Council. Said notice shall be made by certified
mail/return receipt request or by personal service, which notice shall
include the date, time and place of the hearing. The notice shall
also indicate that any interested party may at their option review
the transcript of the Rent Leveling Board hearing(s) and all documentation
that is to be presented to the Council on appeal through inspection
at a convenient location on the premises that is the subject of the
appeal, and upon request, provide copies of said transcript and documentation
at a cost not to exceed what is charged by the Borough for reproduction
costs.
A.
In the event a tax appeal is taken by the landlord and the landlord
is successful in the appeal and the tax is reduced, the landlord shall
remit and tenant shall receive 50% of the reduction as applied to
its tax portion, after deducting all expenses incurred by the landlord
in prosecuting the appeal, within 45 days of receipt by the landlord
of the monies or the crediting of such monies against the landlord's
outstanding taxes. The landlord shall notify each tenant of such tax
reduction and of the calculations involved in computing the tenant's
credit, including the property tax for the dwelling place before the
appeal, the reduced property tax for the dwelling place after the
appeal, the number of square feet of all housing space in the dwelling,
the tax decrease per square foot of housing space, the number of square
feet occupied by the tenant, the credit to which the tenant is entitled,
and how it is being credited. The landlord shall provide the Board
in writing with a detailed list of the items of expense incurred by
him in prosecuting the tax appeal.
B.
A tenant who has resided in housing space for less than the entire
tax year to which a reduction pertains (hereinafter "tax year") shall
be entitled to receive a percentage of the tax refund pertaining to
his housing space, which percentage shall be equal to the percentage
of the tax year the tenant resided in the housing space.
C.
With respect to any tenant who is entitled to a tax refund but whose
whereabouts are unknown, the landlord shall, within 45 days after
receipt by him of his tax refund or the crediting of such refund against
outstanding taxes, deposit the tenant's portion in a bank account
maintained by the landlord.
D.
With respect to a tenant whose whereabouts are unknown, the landlord
shall make a reasonable effort to ascertain such tenant's whereabouts,
and refund to him any amounts to which he is entitled. If, after two
months from the date of the landlord's receipt of his tax refund or
the crediting of such refund against outstanding taxes, he has been
unable to ascertain the whereabouts of any tenant entitled to a refund,
the landlord shall apply such tenant's portion of the tax refund for
general maintenance purposes and/or making improvements to the common
elements of the dwelling.
E.
Within two months after the expiration of the two-month period during
which a landlord must attempt to locate a tenant whose whereabouts
is unknown, the landlord shall expend, and shall provide details to
the Board pertaining to the expenditure of, funds for general maintenance
purposes and/or for making improvements to the common elements.
[Amended 4-11-2012 by Ord. No. 2012-7]
During the term of this tenancy, the landlord shall maintain
the same standards of service, maintenance, furniture, furnishings
and equipment in the housing space and dwelling as he provided or
was required to do by law or lease at the date the lease was entered
into. In the event that the landlord fails to provide such service,
tenants may petition the Rent Leveling Board for a reduction in rent,
credit for reduced services or right of reimbursement in cases where
the tenant cannot receive a benefit through credits.
The owner of housing space or dwelling being rented for the
first time shall not be restricted in the initial rent he charges.
Any subsequent rental increases, however, shall be subject to the
provisions of this article.
Should a lease entered into between the landlord and tenant
prove to be in conflict with the Rent Leveling Ordinance, this article
shall take precedence.
A.
Any housing space which is presently vacant or which will become
vacant during or at the end of any lease term shall be decontrolled
and the rent may be raised by the landlord. The rent to be charged
to a new tenant as well as the rent previously charged for the same
space shall be reported to the Rent Leveling Board within 15 days
of renting the space. Upon being re-rented, the rental space shall
be considered recontrolled to the same extent and under the same conditions
as any space originally controlled.
B.
Failure to report the information required within the 15 days specified
shall result in the rental space remaining controlled to the same
extent and under the same conditions as if it had not been vacant
and any rental charged the new tenant in excess of that controlled
rate shall be void.
Any tenant filing a complaint with the Rent Leveling Board against
the landlord shall be required to sign a complaint and appear before
the Board to give testimony as requested by the Board. The landlord
and/or his representative, upon due notice, shall be required to appear
and give testimony. Any tenant appearing before the Board may select
someone to represent them who need not be an attorney, provided the
person representing the tenant is authorized to do so in writing.
Any person representing a tenant excepting an attorney is not permitted
to charge a fee for his service.
When the Rent Leveling Board shall request of any landlord any
information with respect to any rental unit, such information shall
be provided to the Rent Leveling Board within 15 days of such request.
Failure to report the information required within the 15 days specified
shall result in the rental space remaining controlled to the same
extent and under the same conditions as it had not been vacant and
any rental charged the new tenant in excess of that controlled rate
shall be void.
All landlords shall be required to have at all times a copy
of the Rent Leveling Ordinance posted in the lobby or other conspicuous
place in the premises.
A.
A willful violation of any
provisions of this chapter including, but not limited to, the willful
filing with the Rent Leveling Board of any material misstatement of
fact, shall be punishable by a fine and/or penalties not to exceed
the maximum allowed by N.J.S.A. 40:49-5 and shall be considered a
separate violation as to each leasehold.
[Amended 4-11-2012 by Ord. No. 2012-7]
B.
Upon recommendation to the Borough Council by the Rent Leveling Board
that a violation be prosecuted, it shall be the duty of the Borough
Code Enforcement Officer to sign the complaint, within 15 days after
the Council has authorized the same by resolution.
This article being necessary for the welfare of the Borough
and its inhabitants shall be liberally construed to effectuate the
purposes thereof.
