ASSEMBLY APPROPRIATIONS COMMITTEE

STATEMENT TO

ASSEMBLY, No. 5432

STATE OF NEW JERSEY

with committee amendments

DATED:  MAY 15, 2025

      The Assembly Appropriations Committee reports favorably and with committee amendments Assembly Bill No. 5432.

     As amended and reported, this bill codifies the test, provided in State case law, for determining whether a rent increase is unconscionable. 

     To determine whether a rent increase is unconscionable, a court would consider:

· the amount of the proposed rent increase;

· the landlord’s expenses and profitability, including the considerations provided in the bill;

· how the existing and proposed rents compare to rents charged at comparable rental properties in the geographic area, including the federal Department of Housing and Urban Development Fair Market Rents and Small Area Market Rents;

· the relative bargaining position of the parties, including consideration of the availability of rental housing in the geographic area;

· whether the rent increase would shock the conscience of a reasonable person;

· the length of time since the last rent increase by the current owner against the residential tenant, the length of tenancy, and the length of property ownership; and

· the condition of the property, including whether there are claims related to the habitability of the premises and certain outstanding code violations affecting health and safety. 

     The bill specifies that no one factor enumerated in the bill and considered by a court is to be the sole factor in the court’s decision concerning whether a rent increase is unconscionable, and that the factors enumerated in the bill are not to be deemed an exhaustive list.  The bill permits a court to consider other factors which, on a case-by-case basis, the court determines to be relevant in determining whether an increase in rent is unconscionable.

     The bill also codifies paragraph (11) of subsection f. of R.1:38-3 of the Rules of Court, to provide that the following court records are to be excluded from public access:

     (1)  records concerning an eviction action against a residential tenant pursuant to section 2 of P.L.1974, c.49 (C.2A:18-61.1), which was adjudicated or otherwise disposed of and for which no judgment for possession has ever been entered; and

     (2)  records concerning any residential eviction action, whether pursuant to N.J.S.2A:18-53 et seq. or section 2 of P.L.1974, c.49 (C.2A:18-61.1), in which a judgment for possession was entered seven years ago or longer.

     The bill specifies that its provisions would not be applicable to rent increases that are subject to and compliant with a local rent control ordinance or approved variance, or subject to regulation by a local, State, or federal affordable housing program. 

     The bill would take effect immediately, except that the provisions of the bill establishing the confidentiality of certain court records related to an eviction, would take effect on the first day of the sixth month following the date of enactment. 

COMMITTEE AMENDMENTS:

      The committee amended the bill to:

(1)  remove the definition of the term “geographic area”;

(2)  specify that a court is to consider how the existing and proposed rents compare to rents charged at comparable rental properties, instead of similar rental properties, and that the analysis is to include the federal Department of Housing and Urban Development Fair Market Rents and Small Area Market Rents;

(3)  provide that the factors enumerated in the bill are not to be deemed exhaustive, and that a court may consider other factors on a case-by-case basis that the court determines to be relevant in determining whether an increase in rent is unconscionable; and

(4)  specify that the following court records are to be excluded from public access:

· records concerning an eviction action against a residential tenant pursuant to section 2 of P.L.1974, c.49 (C.2A:18-61.1), which was adjudicated or otherwise disposed of and for which no judgment for possession has ever been entered; and

· records concerning any residential eviction action, whether pursuant to N.J.S.2A:18-53 et seq. or section 2 of P.L.1974, c.49 (C.2A:18-61.1), in which a judgment for possession was entered seven years ago or longer.

FISCAL IMPACT:

      This bill is not certified as requiring a fiscal note.