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Wayne Village Tenants'' Association v. Wayne Village

Decided: March 27, 1972.

WAYNE VILLAGE TENANTS' ASSOCIATION AND LEONARD BENNETT, INDIVIDUALLY AND AS A REPRESENTATIVE OF MEMBERS OF A CLASS, PLAINTIFFS-RESPONDENTS,
v.
WAYNE VILLAGE, A CORPORATION OF THE STATE OF NEW JERSEY, AND JAMES QUARRY AND EVELYN QUARRY, DEFENDANTS-APPELLANTS



Collester, Mintz and Lynch.

Per Curiam

On the return day of the order to show cause, the parties agreed that the matters in issue be considered presented as cross-motions for summary judgment.

Plaintiffs challenge the validity of the provision in the leases for the respective apartments which provides that "If any rent increase is allowed by governmental authorities having jurisdiction, tenant agrees to pay such increase from date granted." The project was financed by an insured mortgage loan made by Federal Housing Authority (F.H.A.)

Wayne Village, owner of the garden apartment complex, submitted a formal request to the Department of Housing and Urban Development (under whose jurisdiction the F.H.A. falls) for an increase in rentals based on an increase in cost of operation, maintenance and taxes. The request was accompanied by a certified financial statement for the year ending December 31, 1969, including required profit and loss and project expense accounts. Formal approval for rental increases was granted on July 22, 1970. The tenants were notified that the permitted increases would become effective on September 1, 1970.

Plaintiffs allege in their complaint that they requested, but were refused, copies of the data furnished the governmental agency upon which the increases were allowed. They further allege that the increase in rentals was effected without notice and an opportunity to be heard, and therefore violative of due process of law.

The trial court denied plaintiffs' motion for summary judgment but granted defendants' motion for summary judgment upon the following terms and conditions:

2. * * *

(a) Defendant submit itself to complete discovery referable to the basis upon which it applies to the Federal Housing Authority (FHA) for a rental increase so as to afford plaintiff an opportunity to determine whether or not it wishes to assert a cause of action by way of amended complaint in this cause against defendant based upon tortious or fraudulent conduct which induced action by the FHA which action in turn had its impact upon and damaged plaintiffs.

(b) Discovery is hereby extended for a period of 45 days and plaintiff, if it so desires, shall file its amended complaint on or before June 1, 1971.

(c) That hereinafter, before defendant, Wayne Village, can apply to the FHA for a rental increase, it shall forward to each tenant at least 30 days prior to such application the precise factual foundation upon which the same is predicated.

3. All tenants who executed leases subsequent to the FHA approved increase contested herein are not affected thereby, and are remitted to such rental as they paid prior thereto.

Defendant appeals contending that the trial court erred in imposing the aforementioned terms and conditions. ...


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