Articles Tagged with Rent

On April 13, 2020 at 9:00am, the NJ Economic Development Authority’s Small Business Emergency Assistance Loan program will go “live” for online applications. NJ landlords and property managers suffering from or anticipating an immediate reduction in rental income should seriously consider applying for a loan. These loans have fairly straightforward eligibility criteria and favorable repayment terms. The following is a basic primer on the borrower qualifications and loan terms.

Who Can Apply: Eligible small businesses check all of the following boxes:

  1.  Have a physical commercial location in NJ (no home offices);

While the CARES Act imposes an eviction moratorium on landlords of “covered properties” the Act is not without relief to landlords. Landlords/borrowers with “federally backed mortgage loans” or  “federally backed multi-family mortgage loans” are entitled to monthly mortgage payment forbearance for up to 90 days.

Section 4022 (1-4 family mortgage loans) and Section  4023 (5+ family mortgage loans)  of the CARES Act provide some relief to multi-family borrowers. To qualify,  a borrower/landlord must fall into any of the below categories:

  1. Borrowers with “Federally Backed Mortgage Loan” meaning, a 1-4 family property with mortgage bought by Fannie/Freddie (above) or involving FHA, VA or other related federal agency. This is the overwhelming majority of 1-4 family mortgage loans. Or;

On March 27, 2020, President Trump signed the COVID-19/Coronavirus Rescue bill or “CARES Act” into law.  The CARES Act has important implications for borrower/landlords of properties identified as “Covered Properties.” In short,  CARES Act “Covered Properties” are subject to specific eviction restrictions lasting until the end of July 2020. These restrictions are identified in Sections 4022 through 4024 of CARES.

“Covered Properties” are:  (1) properties that participate in a federal housing program or (2)  properties that have a “federally backed mortgage  loan” or “federally backed multi-family mortgage loan”.  The below table identifies the types of covered properties. The bolded terms are more common federal programs or “backed” loans.

Federal Housing Program

Federally Backed Mortgage Loan/Multi-Family Loan

•              Public housing (42 U.S.C. § 1437d)

•              Section 8 Housing Choice Voucher program (42 U.S.C. § 1437f)

•              Section 8 project-based housing (42 U.S.C. § 1437f)

•              Section 202 housing for the elderly (12 U.S.C. § 1701q)3

•              Section 811 housing for people with disabilities (42 U.S.C. § 8013)

•              Section 236 multifamily rental housing (12 U.S.C. § 1715z–1)

•              Section 221(d)(3) Below Market Interest Rate (BMIR) housing (12 U.S.C. § 17151(d))

•              HOME (42 U.S.C. § 12741 et seq.)

•              Housing Opportunities for Persons with AIDS (HOPWA) (42 U.S.C. § 12901, et seq.)

•              McKinney-Vento Act homelessness programs (42 U.S.C. § 11360, et seq.)

•              Section 515 Rural Rental Housing (42 U.S.C. § 1485)

•              Sections 514 and 516 Farm Labor Housing (42 U.S.C. §§ 1484, 1486)

•              Section 533 Housing Preservation Grants (42 U.S.C. § 1490m)

•              Section 538 multifamily rental housing (42 U.S.C. § 1490p-2)

•              Low-Income Housing Tax Credit (LIHTC) (26 U.S.C. § 42)

•              The Rural Housing Voucher Program (42 USC § 1490r)

• Federally Backed Mortgage Loan, 1-4 Family purchased or securitized by Fannie/Freddie (Note: Fannie and Freddie purchase the overwhelming majority of 1-4 family mortgages on the secondary market)

 

• Federally Backed Mortgage Loan, 5+ family  purchased or securitized by Fannie/Freddie

 

• Federally Backed Mortgage Loan or Multi-Family Loan insured, guaranteed, supplemented, or assisted in any way by the Federal Government.

 

 

 

For 120 days, measured from March 27, 2020 (in other words until July 25, 2020), landlords of covered properties cannot:

  1. Initiate/file any non-payment of rent proceedings against Tenants in covered properties;
  2. Charge/collect late fees from tenants.

This federal law preempts any state law or executive action which may have permitted the filing of non-payment cases but stayed the execution of a judgment for possession. Where New Jersey Governor Murphy’s EO106 permitted the filing of a nonpayment case, the CARES Act does not. The CARES Act specifically prohibits “any filing” or “initat[ion] of legal action to recover possession.

In short, if you are a landlord of a “Covered Property” you cannot initiate a nonpayment of rent case against a tenant, nor can you collect late fees for unpaid rent, during the time period March 27, 2020 to July 25, 2020.

If you a landlord of a property which does not meet the definition of a “Covered Property” (in its entirety) but you have tenants who receive Section 8 voucher assistance, those tenants who receive the voucher are protected by the eviction moratorium–even if other tenants are not.

Offit Kurman, P.A., maintains a broad-based landlord and property owner representation practice. In New Jersey, Offit Kurman represents landlords and property managers in maximizing return, resolving disputes and avoiding unnecessary and costly delays. The Firm’s New Jersey geographic practice area includes: Jersey City, Hoboken, Bayonne, Hudson County, Newark, Essex County, Woodbridge, Middlesex County, Paterson, Passaic County, Hackensack, Bergen County and other points across New Jersey.

On November 5, 2019, voters in Jersey City, NJ approved expansive regulations on “short term rentals” commonly listed on Airbnb, VRBO and similar sites. These regulations (codified in Chapter 255 of the Jersey City Municipal Code) permit short rentals only in limited circumstances. This post is one of series which will discuss the effects of Ordinance 19-077 on multi-family properties in Jersey City. The discussion begins with: Who can list on Airbnb after 19-077?

Chapter 255 of the Jersey City Municipal Code regulates short-term rentals after January 1, 2020. To understand the ordinance, it is first necessary to know the definition of a short-term rental. Short-term rentals are those residences which meet three conditions. First, the property must be a residential property offered for occupancy by someone other than property’s owner for less than 28 consecutive days. Second, the property must be regularly used and kept open for the lodging of  transient guests. Lastly, the property must be advertised or “held out to the public” as a place regularly rented to transient occupants. Put simply, a short-term rental is one advertised for short stays by non-owners.

After January 1, 2020, short-term rentals not specifically permitted by Chapter 255 are prohibited. Permitted short-term rentals are capped at 60 nights, unless specific owner-occupancy criteria are met.  There are only 5 categories of permissible “cap free” short-term rentals. These categories, all predicated upon owner-occupancy are:

Local rent control laws are commonplace in New Jersey’s largest cities. Newark and Jersey City (New Jersey’s most populous cities) both maintain comprehensive rent control laws. The basics of these laws are well known. Rent control ordinances control the rent a landlord can charge and restrict the size of future rent increases. But, basic rent and rent increases are not the only financial obligations of tenancy. Many leases define late fees, attorney’s fees and other costs as “additional rent” to be collected from the tenant in an eviction action. Can these fees be collected from tenants in rent-controlled cities? Under Opex Realty Mgmt., LLC v. Taylor, (Law.Div.2019) the answer is: “No.” After Opex Realty (approved for publication on August 13, 2019), landlord and property managers of rent controlled properties should exercise care in drafting leases and initiating nonpayment evictions.

Opex Realty addressed a common-place but unresolved question. Does a rent control ordinance’s definition of “rent” necessarily preclude the collection of “additional rent” defined costs in a lease, when the collection of those costs exceeds the maximum rent under rent control? Prior to Opex Realty, tenants generally relied on Ivy Hill Park Apts. v. Sidisin, 258 N.J.Super. 19 (App.Div.1992). In Sidisin, the Appellate Division held that a landlord could not evict a tenant for “additional rent” (defined in a lease) when the same costs were not defined as “rent” under a rent control. The Opex decision arrives at the same conclusion of Sidisin, but with a different rationale.

Judge Petrillo’s Opex holding is that additional rent cannot be collected in a nonpayment eviction because the combination of additional rent and base rent exceeds the maximum allowable rent under rent control. Judge Petrillo held: “The court will not allow the landlord to circumvent rent control…and raise the rent beyond the lawful limits by labeling a late fee or legal fee as ‘additional rent…’” Emphasis added. The Opex decision is not that additional rent cannot be collected from rent controlled tenants. Rather, the decision is that additional rent cannot be collected when so doing exceeds the maximum legal rent. This is why, in dicta, Judge Petrillo added: “Were these tenants not already bearing the maximum rent allowed by law, the outcome might have been different.” A future post will address the practical implications of Opex and whether collecting “additional rent” is ever possible under rent control.

A NJ commercial landlord-tenant relationship can be challenging to manage. A commercial landlord must balance the benefit of having a rent paying tenant in a space that can be difficult to rent with the realities of the tenant’s behavior. In 2014, the Firm confronted this scenario: Pursue an eviction matter far enough to convince a commercial tenant to change his behavior while preserving the landlord-tenant relationship and rent payments to the Landlord.
Continue Reading ›

2014 was a busy year for the Firm on the landlord side of the ledger. Some particularly notable NJ landlord-tenant cases include (1) a successful eviction in connection with a tenant’s refusal to cooperate with the Landlord’s lease (required by the NJ Housing and Mortgage Finance Agency); (2) A chronically difficult commercial tenant’s total acquiescence to the Landlord’s demands minutes before trial; (3) A successful defense of a tenant’s illegal apartment claim against a landlord; (4) An eviction of a horrid with horrific behavior for damage to the apartment and (5) a trial judgment in favor of the landlord increasing a tenant’s rent (the tenant refused to pay rent increases for years). Each case, discussed in a separate post, is an example of the Firm’s commitment to delivering cost-effective results to Landlord’s trying to get the most out of their investment.

Many New Jersey landlords require that tenants pay extra money for certain “extra” rights. For example, a landlord may require a pet fee in exchange for the right to keep a pet on the property. Some landlords charge tenants “finder’s fees” for the right to rent an apartment (even though no real estate brokers are involved). Tenants often bristle at paying these extra fees, especially when a lease is renewed. This raises the question: Can a tenant be evicted for failure to pay additional fees?
Continue Reading ›

Late payment of rent is one of the more common landlord complaints. Late-paying tenants interfere with their landlord’s bottom line and create an atmosphere of disrespect toward the landlord’s investment. The NJ Anti-Eviction Act allows a Landlord to evict a tenant for “habitual late payment of rent” when the tenant “after written notice to cease, has habitually and without legal justification failed to pay rent which is due and owing.” N.J.S.A. 2A:18-61.1(j). Although the law seems clear, it’s easy to say a tenant pays rent habitually late; evicting for late payments is more difficult proposition.
Continue Reading ›

All New Jersey landlord-tenant cases have a mediation requirement. This means that the Landlord and the Tenant must, at least, try to resolve their dispute before the case goes before a judge. Mediation is a great opportunity to reach an agreement that works for both Parties and avoids the harshness of a judge calling a winner and a loser. In general, there are three types of landlord-tenant settlements.
Continue Reading ›

Contact Information