Cassidy, J.J.D.R.C. (temporarily assigned).
This matter involves the novel issue of the statutory interpretation for the proper distribution of an unbudgeted school aid rebate, as between landlord-owners and their tenants in connection with real properties subject to a local rent leveling board.
A second issue is whether strict statutory interpretation is mandatory where it results in a refund to tenants, but leaves the landlord with a deficit due to the rent leveling board's limited rental increase insufficient to cover the local annual tax expansion.
Plaintiff Central Towers Company owns and operates an apartment building located in the Borough of Fort Lee. Plaintiff Le Cross Associates is a ground-lessee of a similar apartment complex in the Borough of Fort Lee.
During the year of 1976 there was an unbudgeted school aid rebate totaling $9,691.93 which resulted in a tax decrease of the same amount.
As per the statutory formula, defendant contends that a portion of the unbudgeted school aid refund, $6,299.75, should be rebated to the tenants occupying plaintiffs' apartments.
Plaintiffs contend that their subject properties experienced a net property increase between the years 1976 and 1977. Their position is that if the unbudgeted school aid refund be retained for the property in question, and applied against the property tax increase, each building still suffers a net property tax increase for the year 1977.
This occurred because the local rent control ordinance restricts a landlord from passing on to his tenants all of the increases in property taxes on his apartments. Because of this local rent control ordinance, the landlord can only recoup a portion of the increased property taxes from the tenants through rent increases.
Plaintiffs' position is that it would be inequitable and unfair for them to pass on the unbudgeted school aid refund to the tenants through a tenant tax rebate while still suffering a net property tax increase to be borne paid by the property owner.
N.J.S.A. 54:4-6.3, as amended by section 1 of L. 1977, c. 81, provides that the property owned and operated by plaintiff Central Towers Company is subject to the Tenants' Property Tax Rebate Act.
a. "Qualified real rental property" means any real property containing a mobile home park or two or more spaces which are rented or leased or offered for rent or lease for occupancy by mobile homes, or any building or structure of complex of buildings or structures in which housing units are rented or leased or offered for rental or lease for residential purposes except hotels, motels or other guest houses serving transient or seasonal guests, . . . and owner-occupied structures of three units or less.
Since the property comes under the Tenants' Property Tax Rebate Act, it is also controlled by the provisions dealing with rebates or refunds of school property taxes of the ...