On appeal from Superior Court, Law Division, Bergen County.
Allcorn, Morgan and Horn. The opinion of the court was delivered by Horn, J.A.D.
This case was decided at the trial level on stipulated facts from which the following appears. Max Victor, one of the defendants-respondents, prior to 1971 was a tenant in Horizon Tower North, an apartment building in the Horizon House complex in Fort Lee, New Jersey. This complex was managed by Helmsley-Spear, Inc., plaintiff, as agent for the owner. Plaintiff sent to said Victor during the summer of 1971 an invitation to renew his lease for Apartment 1401, the term of which would expire on October 31, 1974, at a monthly rental of $700, which for the proposed three-year term amounted to $25,200. The parties entered into a lease dated August 31, 1971 for a three-year term commencing on November 1, 1971, calling for payment of the following rental installments: $632 a month from 11/1/71 to 4/30/72 ($7,584), $699 a month from 5/1/72 to 10/31/72 ($8,388) and $765 a month from 11/1/72 to 10/31/74, the expiration dated of the term ($9,180), for a total rent of $25,152.
Thereafter defendant Borough of Fort Lee enacted Ordinance 72-1, regulating rent increases. The ordinance became effective on February 1, 1972 and was subsequently superseded by Ordinance 74-32, which became effective on November 6, 1974 and retained substantially all the provisions of Ordinance 72-1. On November 1, 1974 plaintiff and Victor entered into a one-year
renewal lease at a monthly rent of $835. Thereafter, on September 29, 1975 they entered into a further renewal lease for a one-year term commencing November 1, 1975, at the same monthly rent of $835. In June 1976 the provisions of the rent leveling ordinances were preempted by the U.S. Department of Housing and Urban Development (HUD), which determined that the maximum allowable rent on the Victor apartment was $785 a month. Nevertheless, plaintiff and Victor entered into a two-year lease, the term of which ran from November 1, 1976 to October 31, 1978, at a monthly rent of $870.
On May 27, 1977 Victor filed a complaint with the Rent Leveling Board, claiming "excess rent increases in new lease and graduated increases in [prior] leases." The Board made a preliminary finding that plaintiff owed Victor a refund of $2,178 for excessive rents paid under the 1971-1974 step-up lease.
On July 21, 1977 the Board held a hearing on Victor's complaint and affirmed its preliminary finding of the refund owed Victor. The Board decided that the step-up provisions of the lease were governed by the ordinance even though the lease was entered into prior to the ordinance's enactment.
Plaintiff appealed the decision of the Board to the governing body of the borough pursuant to § 16 of Ordinance 74-32. By resolution the governing body declined jurisdiction of the matter. Plaintiff then instituted this action in lieu of prerogative writs.
At the hearing before the trial judge the parties stipulated that a decision in favor of Victor for overpayment of rent would only affect the credits due Victor for the period from November 1, 1971 until November 1, 1976, as a result of HUD's preemption. The judge, by letter opinion dated September 21, 1978, affirmed the action of the Board and awarded $4,498 to Victor, based on the rents received by plaintiff in excess of those permitted by the respective ordinances. The accuracy of the figure was not in dispute. Plaintiff then appealed.
The issues raised in this appeal are: (1) whether the rents reserved under the 1971 lease were prohibited by the terms of the first rent leveling ordinance, No. 72-1, and (2) if so, whether the application of the provisions of the ordinance to the payments required under that lease was an ...