S4552

An Act to establish a Rent Control Enforcement Unit in the Department of Community Affairs 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 the Commissioner of Community Affairs.

"Department" means the Department of Community Affairs.

"Local rent restriction" means an ordinance, rule, or regulation regarding rent control, rent leveling or rent stabilization, or any other similar law, adopted by the governing body of a municipality, or administrative entity thereof, that limits rent increases on residential tenants. A "local rent restriction" shall also include, but shall not be limited to, a rent increase limit on low- or moderate-income housing established by an administrative agent pursuant to the "Fair Housing Act," P.L.1985, c.222 (C.52:27D-301 et al.).

"Rent Control Enforcement Unit" means the office in the Department of Community Affairs established pursuant to section 2 of P.L. , c. (C. ) (pending before the Legislature as this bill).

2. a. There is established in the Department of Community Affairs the Rent Control Enforcement Unit. The Commissioner of Community Affairs shall appoint the director of the Rent Control Enforcement Unit, who shall serve at the pleasure of the Commissioner.

b. The Rent Control Enforcement Unit shall receive petitions to investigate violations of local rent restrictions, initiated by tenants pursuant to section 3 of P.L. , c. (C. ) (pending before the Legislature as this bill), and shall enforce penalties as the Rent Control Enforcement Unit determines appropriate. A penalty enforced by the Rent Control Enforcement Unit against a landlord for a violation of a local rent restriction may consist of any combination of the following:

(1) a mandatory rent reduction to an amount as low as the lowest rental rate charged for the dwelling unit at any time during the 12 months prior to the date when the challenged increase was proposed or took effect;

(2) a penalty, that may be collected in a summary proceeding pursuant to the "Penalty Enforcement Law of 1999," P.L.1999, c.274 (C.2A:58-10 et seq.), in an amount that shall not exceed 4 months of rental payments, as high as the highest rental rate charged for the dwelling unit at any time during the 12 months prior to the date when the challenged increase was proposed or took effect; or

(3) authorization for the tenant to prematurely terminate the lease agreement.

c. The Rent Control Enforcement Unit shall provide and administer a dedicated helpline and portal on the department’s Internet website to provide assistance to tenants and permit reporting of violations of local rent restrictions.

3. A residential tenant may petition the Rent Control Enforcement Unit, established pursuant to section 2 of P.L. , c. (C. ) (pending before the Legislature as this bill), to investigate and modify a rent increase, or proposed rent increase, that the tenant believes is in violation of an applicable local rent restriction. The authority provided to a tenant pursuant to this section shall be in addition to, and not in place of, any process to challenge a rent increase provided by the governing body of the municipality or other law. The rules and regulations adopted by the department to enforce P.L. , c. (C. ) (pending before the Legislature as this bill) may require a residential tenant to exhaust other avenues for an administrative challenge, made available by the municipality or administrative entity thereof that administers the local rent restriction, before the tenant petitions the Rent Control Enforcement Unit pursuant to this section.

4. a. There is established in the Department of Community Affairs a special nonlapsing fund to be known as the "Rent Control Enforcement Fund." Moneys in the fund shall be used for the administration and enforcement of P.L. , c. (C. ) (pending before the Legislature as this bill). Any penalty collected pursuant to paragraph (2) of subsection b. of section 2 of P.L. , c. (C. ) (pending before the Legislature as this bill) shall be deposited into the fund.

b. The Legislature shall annually appropriate the funding necessary for the purposes of P.L. , c. (C. ) (pending before the Legislature as this bill) to the Rent Control Enforcement Unit to the extent that the amounts collected in penalties pursuant to paragraph (2) of subsection b. of section 2 of P.L. , c. (C. ) (pending before the Legislature as this bill) are not sufficient to address the costs necessary for the administration of P.L. , c. (C. ) (pending before the Legislature as this bill).

5. In accordance with the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), the Commissioner of Community Affairs shall adopt rules and regulations necessary to effectuate the purposes of P.L. , c. (C. ) (pending before the Legislature as this bill), on or before the first day of the fifth month next following enactment.

6. There is appropriated $3,000,000 from the General Fund to the Department of Community Affairs for deposit in the "Rent Control Enforcement Fund," established pursuant to section 4 of P.L. , c. (C. ) (pending before the Legislature as this bill), to defray the costs associated with establishing the Rent Control Enforcement Unit pursuant to section 2 of P.L. , c. (C. ) (pending before the Legislature as this bill).

7. This act shall take effect on the first day of the fifth month next following enactment, except the commissioner shall take such anticipatory actions as necessary to comply with the provisions of this act.

STATEMENT

This bill establishes a Rent Control Enforcement Unit (RCEU) in the Department of Community Affairs (DCA), and authorizes a residential tenant to petition the RCEU to investigate and modify a rent increase, or proposed rent increase, that the tenant believes is in violation of a local rent restriction.

As used in the bill, a "local rent restriction" refers to an ordinance, rule, or regulation adopted by the governing body of a municipality, or administrative entity thereof, that limits rent increases on residential tenants. A "local rent restriction" also includes, but is not limited to, a rent increase limit on low- or moderate-income housing established by an administrative agent in compliance with the "Fair Housing Act," P.L.1985, c.222 (C.52:27D-301 et al.).

The bill authorizes the RCEU to require a residential tenant to exhaust other avenues for an administrative challenge, made available by the municipality or administrative entity thereof that administers the local rent restriction, before the tenant petitions the RCEU.

The bill provides that the director of the RCEU is to be appointed by the Commissioner of Community Affairs (commissioner), to serve at the pleasure of the commissioner.

The bill directs the RCEU to receive petitions to investigate violations of local rent restrictions, initiated by tenants, and enforce penalties as appropriate. A penalty enforced by the RCEU for a violation of a local rent restriction may consist of any combination of:

· a mandatory rent reduction to an amount as low as the lowest rental rate charged for previous year;

· a penalty in an amount of up to four months of rental payments, to be retained by the department to provide for continued enforcement of the bill; or

· authorization for the tenant to prematurely terminate the lease.

The bill requires the RCEU to provide and administer a dedicated helpline, and a portal on the department’s Internet website, to provide assistance to tenants and permit the reporting of violations of local rent restrictions.

The bill establishes a nonlapsing fund for penalties retained by the department, and appropriates $3 million from the General Fund to the fund to defray the costs associated with establishing the RCEU. The bill specifies that the Legislature is to annually appropriate the funding necessary for the purposes of the bill to the RCEU, when taking into account the amounts anticipated to be annually collected in penalties.

The bill directs the commissioner to adopt rules and regulations necessary to effectuate the purposes of the bill on or before the first day of the fifth month following enactment of the bill. The bill takes effect on the first day of the fifth month following enactment, except that the commissioner is to take such anticipatory actions as are necessary to comply with the provisions of the bill.