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Jersey City Rent Control: Owner Occupancy Decontrol? The Rent Control Board Thinks Not.

The Jersey City Rent Control Ordinance requires landlords to provide new tenants with specific information. At the start of each new tenancy a landlord must provide a tenant with a “rental statement” that informs of the tenant of “rent of the prior tenant and notification of the existence of the rent registration law.” The point is pretty simple: If a new tenant finds out her rent is three times what the old tenant paid, she’s more likely to question the legality of the rent. An interesting question presented itself a few weeks ago: What if the owner was the “prior tenant?” What notice is a tenant occupying an apartment after the owner entitled to?

In a recent case before the Jersey City Rent Control Board (the “Board”), a tenant asked for a “waiver” of the statute of limitations (in Jersey City, it’s two years) for a rent control overcharge that continued for 4 years. The tenant alleged that the landlord never provided her with with the rental statement, as required by the ordinance. The landlord’s position was that no rental statement was required since he occupied the unit prior to the tenant. Strengthening, his case, the landlord showed that he otherwise complied with rent control and DCA regulations. Accordingly, the landlord believed that the legal rent for the apartment was simply the new rent.

The tenant objected. For simple starters, a landlord-owner is not a “tenant” and does not pay “rent.” If anything a landlord is merely an occupant who has the fortune of not having to pay himself. Further, allowing a landlord to avoid the rental statement by owner-occupancy creates a type of “owner-occupancy decontrol.” A prior post explained that Jersey City’s Rent Control does not provide for vacancy decontrol. The legal rent charged must be contiguous between tenants. To allow the landlord to avoid the rental statement by occupancy is to create a type of decontrol where every tenant occupying after an owner loses the protection of ordinance.

One important fact was crucial to the tenant’s case. Before the landlord occupied the apartment, it was rented to another tenant. For the purpose of the Rent Control Ordinance, shouldn’t the landlord have to tell the new tenant what the prior (before his occupancy) tenant’s rent was? In a unanimous decision (that still may be appealed), the Board decided: “Yes.”

There are a few practical effects of this case. For landlords who own rent control buildings, each tenant should be given notice of the prior paying tenant’s rent. Even if the apartment was occupied by the owner, a new tenant is entitled to know what the what the last legal rent for that unit was. For tenants, it’s important to know that the legal rent for each rent controlled unit is contiguous. In other words, an owner’s occupancy will not obligate a tenant to pay any rent other than the legal rent for that unit.

Since the facts of each circumstance vary, a landlord or tenant should consult an attorney with his/her specific circumstances. The Major Law Firm practices landlord tenant law throughout New York and New Jersey assisting landlords and tenants in avoiding unnecessary and costly delays. The firm’s geographic practice area includes: New York City (Manhattan, New York County, Brooklyn, Kings County, Queens, Queens County, Bronx County, Staten Island, Richmond County) and New Jersey (Jersey City, Hoboken, Bayonne, Hudson County, Newark, Essex County, Woodbridge, Middlesex County, Paterson, Passaic County). The Firm invites you to visit the “Promises” page for our new way of doing business