A5674

An Act concerning certain mandated lease fees imposed by a landlord for residential dwelling units and supplementing Title 2A of the New Jersey Statutes.

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

1. a. As used in this section:

“Landlord” means any person who rents or leases or offers to rent or lease, for a term of at least one month, one or more residential dwelling units.

“Mandatory lease fee” means any fee, charge, assessment, or recurring expense, other than base rent, security deposit, or government-imposed tax or fee, that a tenant is required to pay as a condition of entering into or maintaining a residential lease. A “mandatory lease fee” shall include recurring fees, fees for service, fees for insurance, utility charges to the extent the utility billing is controlled by the landlord, and amenity fees.

b. In addition to the base rental price, security deposit, or government-imposed tax or fee, a landlord shall provide, in a listing and application for a residential dwelling unit, all mandatory lease fees that a tenant should reasonably anticipate in association with the residential dwelling unit on a monthly basis, including, but not limited to, renter’s insurance, expenses for amenities, and any utilities that are to be paid by the tenant to the landlord. This information shall distinguish between expenses to be billed by the landlord or their agent, and housing expenses to be billed through the landlord for insurance, utilities, or other mandated services. Upon approval of an application, the landlord shall provide all costs associated with the residential dwelling unit within the lease. A landlord shall be prohibited from charging a mandatory lease fee between the application and lease execution unless the applicant agrees to the additional mandatory lease fee and receives an updated disclosure.

c. A landlord shall verify that a prospective tenant has seen the information provided pursuant to subsection b. of this section and shall provide the prospective tenant with no less than three business days after the landlord provides the required mandatory lease fee disclosures, but before the prospective tenant is required to execute the lease, to look for quotes from outside vendors for consumer products that are equivalent to a landlord’s mandatory lease fee in order for a prospective tenant to rent a residential dwelling unit with the landlord, including, but not limited to, renter’s insurance. If a prospective tenant identifies and provides proof of equivalent coverage for a mandatory lease fee, the landlord shall accept the tenant’s substitute coverage and shall not charge that tenant for those mandatory lease fees for which the tenant has provided proof of substitute coverage. A landlord may establish a minimum coverage requirement provided that the landlord accepts a policy found by a prospective tenant that meets the minimum coverage requirements regardless of the insurer or agent through which the prospective tenant has obtained coverage. A landlord shall not deny, delay, or penalize, a prospective tenant for exercising the right to obtain substitute coverage or services.

d. A landlord shall be prohibited from restructuring, renaming, dividing, or characterizing a mandatory lease fee for the purpose of avoiding the requirements of subsection b. of this section.

e. A landlord that violates the provisions of this section shall be subject to a civil penalty of $2,500 for each offense, to be collected in a civil action by a summary proceeding under the “Penalty Enforcement Law of 1999,” P.L.1999, c.274 (C.2A:58-10 et seq.) before the Superior Court, Law Division, Special Civil Part. A penalty recovered under the provisions of this subsection shall be paid to the municipality in which the violation occurred for the general uses of the municipality.

f. The Commissioner of Community Affairs shall adopt rules and regulations, pursuant to the “Administrative Procedure Act,” P.L.1968, c.410 (C.52:14B-1 et seq.), to effectuate the purposes of this section.

2. This act shall take effect on the first day of the fourth month following enactment.

STATEMENT

This bill requires a landlord to make certain disclosures of mandatory lease fees, as defined in the bill, that a prospective tenant should reasonably anticipate in a listing and application for a residential dwelling unit, in addition to the base rental price, security deposit, or government-imposed tax or fee. The bill requires costs to be disclosed that are to include but are not limited to, renter’s insurance, amenities, and any utilities that are to be paid by the tenant to the landlord, distinguishing between costs to be billed by the landlord from those to be billed by a utility company or other mandated service.

Additionally, the bill requires a landlord provide a prospective tenant with no less than three business days after the landlord provides the required mandatory lease fee disclosures, but before the prospective tenant is required to execute the lease, to look for quotes from outside vendors for consumer products that are equivalent to a landlord’s quoted mandatory lease fees in order for a prospective tenant to rent a residential dwelling unit with the landlord, including, but not limited to, renter’s insurance. If a prospective tenant identifies and provides proof of equivalent coverage for mandatory lease fees, the landlord is to accept the tenant’s substitute coverage and not charge that tenant for those mandatory lease fees which the tenant has provided proof of substitute coverage. The bill permits a landlord to establish a minimum coverage requirement provided that the landlord accepts a policy found by a prospective tenant that meets the minimum coverage requirements regardless of the insurer or agent through which the prospective tenant has obtained coverage. The bill prohibits a landlord from denying, delaying, or penalizing, a prospective tenant for exercising the right to obtain substitute coverage or services.

The bill prohibits a landlord from restructuring, renaming, dividing, or characterizing a mandatory lease fee for the purpose of avoiding the requirements

The bill provides that a landlord that violates the provisions of the bill is subject to a civil penalty of $2,500 for each offense, to be collected in a civil action by a summary proceeding under the “Penalty Enforcement Law of 1999,” P.L.1999, c.274 (C.2A:58-10 et seq.) before the Superior Court, Law Division, Special Civil Part. Monies recovered under the provisions of the bill are to be paid into to the municipality in which the violation occurred for the general uses of the municipality. The bill directs the Commissioner of Community Affairs to adopt rules and regulations to effectuate the provisions of the bill.

The bill is to take effect on the first day of the fourth month following enactment.