Wednesday, November 9, 2011

Rent Control Referendum Fails.... Amendment Changes Passed Unanimously in April Go Into Effect

Just in case any of you missed what was going on... back in April the City Council unanimously passed an Ordinance the amended Hoboken's Rent Control Ordinance to add better controls and limits to rent control disputes back in April.  A group of long term Tenants challenged it by getting enough petition signatures within the requisite time from when the amendments passed to put the question to a public vote by way of referendum.

The question on the ballot was asking 'do you wish to reverse the April changes'?  The public answered with a resounding "NO".

The changes in April in a nutshell were as follows:

The amendment reset the base year from which rent increases were calculated from 1981 to 1985 based on the belief that the amendment that went into effect in 1981 lacked an adequate registration process opening up the Ordinance for lack of clarity on what was the proper base rent - ie  if someone didn't properly record the 1981 rent, how could it be enforced?

The amendment in April also required Landlords to provide a disclosure, disclosing that Hoboken has a rent control Ordinance giving the Tenant 2 years to investigate and file a claim of non-legal rent.  That is, the Landlord has to inform the Tenant that rent control exists and the Tenant has 2 years to put in a claim that they were over charged.  In the event the Tenant does not act in that period, he/she can file a claim and have the rent rolled back to the proper amount but cannot collect overpayments.

The way the original Ordinance was written the word "Tenant" was not limited to who was in the apartment at the time the claim was made but included all Tenants back to the point where a proper rent was documented and charged.  For example, if a Tenant files a claim of overpayment and he was in the apartment for let's say, 13 months but a legal rent has not been charged or documented for 10 years spanning 5 Tenants, under the old Ordinance, the current Tenant was entitled to collect over payments not just for 13 months but 10 years and 5 Tenants back.  The amendment changes put in in April that will now be implemented prevent this win fall for Tenants and protect Landlords who may have unwittingly bought a property not knowing that rents have not been charged properly.

Part of the rationale was that a courts case involving the rent control ordinance showed that the city, at times, failed to keep proper records even though the Landlord could evidence in court that proper papers were filed.  There really was no sure fire way of being able to determine prior to purchase that proper rents were being charged.  These amendments attempt to amicably resolve the conflict created by poor city record keeping yet giving Tenants some recourse to act in a reasonable timeframe.

It also allows a landlord to use alternate proof other than having registered annual rents with the city, to prove the rental history.  Previously, you were suppose to fill out a form where you stated what rents your are charging.  If a Tenant moved out and the landlord were to move in and move out again the landlord could have raised the rent by 25% based on the vacancy decontrol rules.  Many landlords did not file this paperwork but increased the rent.  Because they had not filed the vacancy decontrol paperwork, the city would not give them credit for having lived in the unit and landlords were found to charged too much rent even though they had lived in the unit and had they only filed the form the rent charged would have been legal.  Landlord's can now use alternate proof such as fully executed leases. 

Keep original Lease copies.

I always tell my clients you want original lease copies at the end of the lease process.  I know people have scanners and fax machines and you can use that to receive a lease from a new Tenant in order to stop showing the property but in the end you want to make sure all parties have a fully executed lease copy.  This is a good reason why.  You need to hold onto your originals until you sell the property.

As soon as the new amendment is codified, I will update my rent control section on the lower right of the home page with the new ordinance.

Here are some prior articles on rent control.

As usual, information here is deemed reliable but not guaranteed.  Please consult an attorney on the interpretation of the law and all legal matters.

Proposed Rent Control Changes (Article posted prior to April 2011 Amendment)

Information provided by
Donna Antonucci

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