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Inganamort v. Borough of Fort Lee

Decided: December 18, 1974.

JOHN F. INGANAMORT, MICHAEL J. INGANAMORT, LA SALLE CONTRACTING CORP., A JOINT VENTURE TRADING AS MEDITERRANEAN TOWERS, ALEXANDER SUMMER, TRUSTEE UNDER LINWOOD BUILDINGS NO. 1 THROUGH 13, ROBERT SLATER AND BRUCE SLATER, A PARTNERSHIP TRADING AS SLATER ASSOCIATES, HARRY B. HELMSLEY AND ALVIN SCHWARTZ, GENERAL PARTNERS OF A LIMITED PARTNERSHIP TRADING AS HORIZON HOUSE ASSOCIATES, AND FORT LEE TAXPAYERS AND PROPERTY OWNERS' COMMITTEE, PLAINTIFFS,
v.
BOROUGH OF FORT LEE, MAYOR AND COUNCIL OF BOROUGH OF FORT LEE AND RENT LEVELING BOARD OF THE BOROUGH OF FORT LEE, DEFENDANTS. HELMSLEY-SPEAR, INC., MANAGING AGENT FOR HORIZON HOUSE ASSOCIATES, PLAINTIFF, V. RENT LEVELING BOARD OF THE BOROUGH OF FORT LEE, MAYOR AND COUNCIL OF THE BOROUGH OF FORT LEE, BOROUGH OF FORT LEE, JACK ADLER, ROGER HILTON, TERRY PARKER AND FRIDA PARKER, HIS WIFE, EDWARD S. ZORN, LEW RASKIN, DAVID ROSS, ARTHUR BAUM AND ROSE HENRI BAUM, HIS WIFE, DEFENDANTS. HELMSLEY-SPEAR, INC., MANAGING AGENT FOR HORIZON HOUSE ASSOCIATES, PLAINTIFF, V. RENT LEVELING BOARD OF THE BOROUGH OF FORT LEE, MAYOR AND COUNCIL OF THE BOROUGH OF FORT LEE, BOROUGH OF FORT LEE, LEONARD RUSKIEWICZ, MARTIN SILVERSTEIN, MARCO CANNALONGA, GILBERT WYLAND AND MARY WYLAND, HIS WIFE, MARTIN ROFFMAN, GERALD BUXBAUM, MILTON WASSERBERGER & BLANCHE WASSERBERGER, HIS WIFE, CHARLES GEIER, FRANK VOGEL, FREDA MESSINGER & LEONIA JONES, DEFENDANTS. HELMSLEY-SPEAR, INC., MANAGING AGENT FOR HORIZON HOUSE ASSOCIATES, PLAINTIFF, V. RENT LEVELING BOARD OF THE BOROUGH OF FORT LEE, MAYOR AND COUNCIL OF THE BOROUGH OF FORT LEE, BOROUGH OF FORT LEE, DAVID B. GOLDSTEIN, MOLLIE NUSSBAUM, MICHAEL DE MASI, THOMAS FLANAGAN & MAY FLANAGAN, HIS WIFE, WILLIAM BRONSON, ELLEN B. ROBB, JOSEPH WEISSMAN, HAROLD ZIMMERMAN & MYRNA ZIMMERMAN, HIS WIFE, AND MURRAY SCHWARTZ, DEFENDANTS. ALEXANDER SUMMER, INC., A NEW JERSEY CORPORATION, PLAINTIFF, V. RENT LEVELING BOARD OF THE BOROUGH OF FORT LEE, MAYOR AND COUNCIL OF THE BOROUGH OF FORT LEE, BOROUGH OF FORT LEE AND ROBERT HEINER, DEFENDANTS. JOHN F. INGANAMORT, MICHAEL J. INGANAMORT, LA SALLE CONTRACTING CORP., A JOINT VENTURE T/A MEDITERRANEAN TOWERS, HARRY B. HELMSLEY AND ALVIN SCHWARTZ, GENERAL PARTNERS OF A LIMITED PARTNERSHIP T/A HORIZON HOUSE ASSOCIATES, R.R.H. & ASSOCIATES, A PARTNERSHIP T/A CARRIAGE HOUSE, SLATER ASSOCIATES, A CORPORATION OF THE STATE OF NEW JERSEY, T/A PRESIDENTIAL APARTMENTS, CENTER AVE. REALTY INC., A CORPORATION OF THE STATE OF NEW JERSEY, T/A CRYSTAL HOUSE, PEMBROKE DEVELOPERS, A PARTNERSHIP T/A PEMBROKE OF FORT LEE, GEORGE ROTHMAN, IRA GROSSMAN, HELENA CANTOR, SANDRA FEINMAN, AND KAREN WAXBERG T/A REGENCY TOWER, A PARTNERSHIP, CHARLES LUPPINO AND ROSARIO LUPPINO, A PARTNERSHIP, T/A HAMPSHIRE HOUSE, TAMBURELLI PROPERTIES, INC., A CORPORATION OF THE STATE OF NEW JERSEY T/A BELLA VISTA APARTMENTS, NEW JERSEY REALTY COMPANY, A CORPORATION OF THE STATE OF NEW JERSEY T/A PALISADE GARDENS APARTMENTS, AMERICANA ASSOCIATES, INC., A CORPORATION OF THE STATE OF NEW JERSEY T/A COLONY HOUSE APARTMENTS, WINCHESTER ASSOCIATES, TERRACE ASSOCIATES, WHITE MANOR ASSOCIATES, AND DEARVILLE TOWERS, LIMITED PARTNERSHIP OF THE STATE OF NEW JERSEY, RIVERVIEW REALTY CO., A PARTNERSHIP OF THE STATE OF NEW JERSEY T/A RIVERVIEW TOWERS APARTMENTS, PLAINTIFFS, V. THE BOROUGH OF FORT LEE, A MUNICIPAL AND BODY POLITIC OF THE STATE OF NEW JERSEY, MAYOR AND COUNCIL OF THE BOROUGH OF FORT LEE AND RENT LEVELING BOARD OF THE BOROUGH OF FORT LEE, DEFENDANTS



Smith, Harvey, J.c.c., Temporarily Assigned.

Harvey

This is a consolidation of six separate actions instituted by numerous owners of multi-family residences seeking to invalidate Fort Lee Rent Levelling Ordinance 74-26 and to overturn the actions of the Fort Lee Rent Levelling Board.

The ordinance in question purported to amend Ordinance 72-1 by limiting the landlord's maximum allowable rent increase per year to 2 1/2% of the previous 12 month rent charged for the premises. We must therefore explore the legislative history of Fort Lee rent levelling in light of recent case law.

Ordinance 72-1 was enacted on February 2, 1972. Rent gouging in multi-family dwellings had been found to so disturb the housing market that the Borough exercised its delegated police power to protect its citizens. As initially proposed, Section 20 provided for a three year term but before final enactment the viable life span was reduced to one year without proper public notice. The same section provided that termination was to be automatic ". . . unless specifically extended by the Governing Body by Resolution . . .". Because previously rent levelling had been solely within the State's ambit, this ordinance was the subject of court ordered restraints from its inception. The restraints were not lifted until the New Jersey Supreme Court found rent levelling delegable by the State and within the purview of municipal police power. Inganamort v. Fort Lee, 62 N.J. 521 (1973).

Prior to expiration of and pursuant to the terms of Ordinance 72-1, the Fort Lee governing body passed a resolution on January 17, 1973 stating that the emergency still existed, necessitating the continuance of rent levelling for another year. On May 15, 1974 the Borough recognized

a need to further restrict rent increases and enacted Ordinance 74-26 which is the subject of the litigation herein.

At about this time, companion Hudson County rent levelling cases were decided. Albigese v. Jersey City, 127 N.J. Super. 101 (Law Div. 1974); Woodcliff Managament v. Tp. of North Bergen, 127 N.J. Super. 123 (Law Div. 1974). In Albigese, supra, the court held that a windfall rise in rents during a non-controlled period could be subject to retroactive municipal control by legislation creating a base period from which increases would be calculated. Id., 127 N.J. Super. at 114. The same court held that such strictures could only be applied prospectively on landlord-tenant contracts in force prior to enactment and that no retroactive rebates from landlords to tenants could be exacted. Woodcliff Management, supra.

Thereafter landlords appealed the Albigese decision challenging the procedural validity of extension of an ordinance by means of resolution. It was held that extension of legislative matters, as opposed to administrative or procedural matters, could only be effected by ordinance. An extension by resolution was invalid. Albigese v. Jersey City, 129 N.J. Super. 567 (App. Div. 1974).

Section 20 of Fort Lee Ordinance 72-1 provided for extension by resolution. Construed in terms of the holdings outlined, the ordinance ceased to exist after February 2, 1973. Ordinance 74-26 cannot be said to have incorporated an invalid ordinance by reference. Standing alone, this later enactment was deficient because it stated no legislative purpose, set no time limit nor did it set out the rights, duties and liabilities of landlords and tenants pursuant to the enactment. Fort Lee was therefore free from rent levelling control until at least November 6, 1974 when a new ordinance was enacted. No opinion is here offered as to the validity of the November 6, 1974 enactment. The question remains as to what rights and liabilities accrued to landlords and tenants during this 23 month interstices.

The right of a landlord to freely contract with a tenant falls within the protection accorded private property by the United States and New Jersey Constitutions. U.S. Const., Amend. V; N.J. Const. Art. 1, para. 1. But valid legislation enacted pursuant to the governmental unit's police power for the benefit of the general public would suffice to force that private interest to yield. 5 McQuillin, Municipal Corporations (3d ed. 1969) ยง 19.37, pp. 493-497. Therefore until February 2, 1973 landlords could only ...


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