S2953 SS

An Act concerning rent increases for certain dwelling sites for modular or industrialized buildings or manufactured homes and supplementing chapter 27D of Title 52 of the Revised Statutes.

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. As used in P.L. , c. (C. ) (pending before the Legislature as this bill):

"Commissioner" means Commissioner of Community Affairs.

"Covered dwelling site" means a parcel of land within a manufactured home park that is leased to the owner of a modular or industrialized building, or a manufactured home for living and dwelling purposes for tenancy on the site.

"Industrialized or modular building" means any building of closed construction, including, but not limited to, modular housing that is factory-built single-family and multi-family housing, including closed-wall, panelized housing, as well as other modular, nonresidential buildings. "Industrialized or modular building" shall not include any structure subject to the requirements of the National Manufactured Home Construction and Safety Standards Act of 1974 (42. U.S.C. s.5401 et seq.).

"Landlord" means a person or entity who owns or manages a manufactured home park, and who rents, leases, or charges a lot fee, or offers to rent, lease, or charge a lot fee, for a term of at least one month, a covered dwelling site.

"Manufactured home" means a structure for which the manufacturer has filed a certification required by the Secretary of the United States Department of Housing and Urban Development pursuant to 42 U.S.C. s.5415 and which complies with the federal standards established pursuant to the National Manufactured Home Construction and Safety Standards Act of 1974 (42. U.S.C. s.5401 et seq.).

"Manufactured home park" means a parcel of land, or two or more contiguous parcels of land, designed and improved such that the land contains two or more sites, each of which is equipped for the placement of modular or industrialized buildings or manufactured homes, and which sites are under common ownership and control, other than as a cooperative, for the purpose of leasing each site to the owner of a modular or industrialized building or a manufactured home for installation thereon, and where the owner provides services, which may include, but shall not be limited to:

(1) Construction and maintenance of streets;

(2) Lighting of streets and other common areas;

(3) Garbage removal;

(4) Snow removal; and

(5) Provision for the drainage of surface water from home sites and common areas.

"Rent" means the amount currently payable by the tenant to the landlord pursuant to a lease or other agreement, without regard to any modification thereof by any authorized board or agency, or any court. "Rent" shall include lot fees, including license fees, charged by a landlord to a tenant, in addition to tax surcharge costs passed on to the tenant, and any other special expenses.

"Tenancy" means the lawful occupation of a covered dwelling site, and which includes a lease or sublease, oral or written.

"Tenant" means a person who leases, rents, or pays a lot fee for a covered dwelling site.

2. a. Except as provided in subsections c. and g. of this section, a landlord shall not, over the course of a 12-month period, increase the rent on a covered dwelling site by more than three percent over the rent charged during the prior 12-month period.

b. A tenant of a covered dwelling site shall not enter into a sublease that results in a rental rate for the covered dwelling site that exceeds the allowable rate authorized by subsection a. of this section. Nothing in this subsection shall be construed to authorize a tenant to sublet or assign the tenant’s interest where otherwise prohibited.

c. A landlord may, notwithstanding subsection a. of this section, establish the initial rate for a new tenancy in which no tenant from the prior tenancy remains in lawful possession of the covered dwelling site. Subsection a. of this section shall only apply to subsequent increases after that initial rate has been established with respect to the new tenancy.

d. Except as allowed following a petition to the commissioner pursuant to subsection g. of this section, if the landlord of a covered dwelling site requests or accepts an increase in rent exceeding the amount permitted pursuant to subsection a. of this section:

(1) the applicable rent for the duration of the present lease or agreement term, or subsequent lease or agreement term if the present term is month-to-month, shall be the rent for the rental term preceding the rent increase in violation of this section; and

(2) the landlord shall be liable for a penalty of $1,000 per violation per unit. The penalty shall be collected and enforced by summary proceedings pursuant to the "Penalty Enforcement Law of 1999," P.L.1999, c.274 (C.2A:58-10 et seq.). The Superior Court, Law Division, Special Civil Part in the county in which the residential rental property is located shall have jurisdiction over the proceedings described pursuant to this paragraph. Process shall be in the nature of a summons or warrant, and shall issue upon the complaint of the Commissioner of Community Affairs or the Attorney General.

e. This section shall function in addition to, and not in place of, the existing prohibition on unconscionable rent increases pursuant to subsection f. of section 2 of P.L.1974, c.49 (C.2A:18-61.1). A tenant may assert a violation of this section as a defense to an eviction action as an unconscionable rent increase.

f. (1) A tenant shall have the right to petition a court of competent jurisdiction to terminate a lease or agreement containing a provision in violation of P.L. , c. (C. ) (pending before the Legislature as this bill), and shall be permitted to recover reasonable attorney’s fees or expenses.

(2) A landlord who violates P.L. , c. (C. ) (pending before the Legislature as this bill) shall also, at the discretion of the tenant, be subject to a separate cause of action by the tenant in the Superior Court, Law Division, Special Civil Part in the county in which the covered dwelling site is located. A tenant may recover $500 from the landlord for a first offense, and $1,000 from the landlord for a second and any subsequent offense, in addition to reasonable attorney’s fees or expenses.

(3) A landlord shall be subject to the penalties set forth in this subsection for each violation against each tenant, which may be brought pursuant to paragraph (2) of this subsection at the tenant’s discretion.

g. (1) (a) A landlord may petition the commissioner to request approval to increase the rent, in an amount specified by the landlord, on a covered dwelling site in excess of three percent:

(i) by demonstrating that the present rental income and additional charges from the manufactured home park on which the landlord seeks relief, are insufficient to cover unanticipated increases in the costs of: the abatement of hazardous conditions, taxes, assessments, maintenance to the manufactured home park, utilities, insurance, and management of the manufactured home park; or

(ii) by submitting proof or documentation of capital improvements to the property, which require the increase in rent.

(b) In determining whether to grant a landlord’s petition pursuant to this subsection, there shall be a rebuttable presumption that the rent increase is reasonable and not unconscionable. If the tenant offers evidence sufficient to overcome the rebuttable presumption, the commissioner may, after a hearing, grant the landlord a rent increase sufficient to meet the landlord’s requirements or needs after consideration of either the proofs or documentation presented, for approval of a petition submitted pursuant to sub-subparagraph (ii) of subparagraph (a) of this paragraph, or the proofs presented, the physical condition of the manufactured home park, the landlord’s profitability with and without the proposed rent increase, the arguments presented by affected tenants, and the relative bargaining position of the parties, for approval of a petition seeking relief pursuant to sub-subparagraph (i) of subparagraph (a) of this paragraph. The commissioner shall schedule a hearing and make a final determination on a petition pursuant to this paragraph within 90 days after the landlord submits the petition to the commissioner. If the commissioner fails to act within 90 days after the landlord submits the petition, the rent increase on a covered dwelling site shall be deemed approved, provided the rent increase otherwise complies with the provisions of this subsection.

(2) A landlord that seeks to file, or files, a petition pursuant to paragraph (1) of this section, shall:

(a) prior to filing the petition, post notice of the petition setting forth the basis for the petition in a conspicuous place in and about the manufactured home park;

(b) prior to filing the petition, serve each affected tenant personally, or by certified mail, with the petition to be filed with the commissioner;

(d) post notice of the hearing in a conspicuous place in the manufactured home park for at least 10 days prior to the date set for the hearing.

3. The provisions of P.L. , c. (C. ) (pending before the Legislature as this bill) shall not preempt an ordinance, rule, or regulation, or other law regarding rent control, rent leveling, or rent stabilization adopted by the governing body of a municipality that would result in a rent increase on a covered dwelling unit that is less than or equal to three percent over the course of a 12-month period. The provisions of P.L. , c. (C. ) (pending before the Legislature as this bill) shall preempt an ordinance, rule, regulation, or other law regarding rent control, rent leveling, or rent stabilization adopted by the governing body of a municipality that would otherwise allow for a higher permitted rent increase on a covered dwelling unit over the course of a 12-month period.

4. The commissioner shall, in accordance with the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), adopt rules and regulations as necessary to implement the provisions of P.L. , c. (C. ) (pending before the Legislature as this bill).

5. This act shall take effect on the first day of the third month next following the date of enactment, except that the commissioner may take anticipatory action necessary to implement the provisions of P.L. , c. (C. ) (pending before the Legislature as this bill). This act shall apply to tenancies commencing on or after the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill).

STATEMENT

This floor substitute limits the amount a landlord may increase the rent on a tenant of a dwelling site within a manufactured home park, upon which the tenant is permitted to install a modular or industrialized building, or manufactured home, as defined in the bill.

The bill prohibits a landlord, as defined in the bill, of a covered dwelling site, from increasing the rent over the course of a 12-month period by more than three percent. The bill defines the term "covered dwelling site" to mean a parcel of land within a manufactured home park that is leased to the owner of a modular or industrialized building, or manufactured home for living and dwelling purposes. Under the bill, "rent" includes lot fees, including license fees, charged by a landlord to a tenant, in addition to tax surcharge costs passed on to the tenant, and any other special expenses.

The bill provides, with limited exceptions, that if the landlord increases the rent in excess of the bill’s limitation: (1) the applicable rent for the duration of the present lease term, or subsequent lease term if the present term is month-to-month, is to be the rent for the year or term preceding the violation; and (2) the landlord would be liable for a penalty of $1,000 per violation per unit, upon the complaint of the Commissioner of Community Affairs or the Attorney General. The bill’s limitations would function in addition to the existing prohibition on unconscionable rent increases pursuant the Anti-Eviction Act, P.L.1974, c.49 (C.2A:18-61.1 et seq.), and would permit a tenant to assert the violation as a defense to an eviction as an unconscionable rent increase.

A violation of the bill would:

(1) permit a tenant to petition the court to terminate a lease or agreement in violation of the bill, and to recover reasonable attorney’s fees or expenses; and

(2) subject a landlord to a private cause of action, brought at the discretion of the tenant, who would be permitted to recover $500 for a first offense by the landlord, and $1,000 for a second and any subsequent offense by the landlord, in addition to reasonable attorney’s fees or expenses. A landlord would be subject to the penalties set forth in the bill for each violation against each tenant, brought at the tenant’s discretion.

The bill permits a landlord to petition the Commissioner of Community Affairs (commissioner) to request approval to increase the rent, in an amount specified by the landlord, on a covered dwelling site in excess of three percent, through procedures as specified in the bill. In determining whether to grant a landlord’s petition, there is to be a rebuttable presumption that the rent increase is reasonable and not unconscionable. If the tenant offers evidence sufficient to overcome the rebuttable presumption, the bill permits the commissioner, after a hearing and consideration as specified in the bill, to grant the landlord a rent increase sufficient to meet the landlord’s requirements or needs. The bill requires a landlord petitioning the commissioner for a rent increase to:

(1) prior to filing the petition, post notice of the petition setting forth its basis in a conspicuous place in and about the manufactured home park;

(2) prior to filing the petition, serve each affected tenant personally, or by certified mail, with the petition to be filed with the commissioner;

(3) notify each affected tenant personally, or by certified mail, of the hearing date set by the commissioner; and

(4) post notice of the hearing in a conspicuous place in the manufactured home park for at least 10 days prior to the date of the hearing.

The bill would: only preempt other laws regarding rent control, rent leveling, or rent stabilization adopted by the governing body of a municipality that result in a higher permitted rent increase over the course of a 12-month period, and not preempt laws regarding rent control, rent leveling, or rent stabilization adopted by the governing body of a municipality resulting in a rent increase that is less than or equal to three percent. The bill would take effect on the first day of the third month following the date of enactment, and be applicable to tenancies commencing on or after the effective date of the bill. The commissioner would be permitted to take anticipatory action necessary to effectuate the provisions of the bill.