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Bigel v. Director of Division of Local Government Services

Decided: May 8, 1980.

JOSEPH BIGEL, MILTON SHOENHOLZ AND MILTON M. LIEBERMAN, PLAINTIFFS-APPELLANTS,
v.
DIRECTOR OF THE DIVISION OF LOCAL GOVERNMENT SERVICES, THE DEPARTMENT OF COMMUNITY AFFAIRS OF THE STATE OF NEW JERSEY; TAX COLLECTOR OF THE BOROUGH OF RIVER EDGE; AND BOROUGH OF RIVER EDGE, DEFENDANTS-RESPONDENTS, AND RIVER EDGE TENANTS ASSOCIATION, INTERVENOR



On appeal from the Superior Court of New Jersey, Chancery Division, Bergen County.

Crane, Milmed and King.

Per Curiam

[173 NJSuper Page 542] In an action commenced in the Chancery Division plaintiffs, owners of garden apartments in the Borough of River Edge (borough), sought (1) a determination that N.J.A.C. 5:30-16.5, promulgated by the Director of the Division of Local Government Services (Director) pursuant to the Tenants' Property Tax Rebate Act, N.J.S.A. 54:4-6.2 et seq. , does not require them to

rebate to their tenants any part of the unbudgeted state school aid payments which they received in 1977, and (2) an injunction staying, pending determination of the matter, the operation of N.J.S.A. 54:4-6.11 and N.J.S.A. 54:4-6.12, relating to the owner's liability to his tenants, and his liability for penalties, respectively, for failure to provide required property tax rebates. The trial judge granted the injunction sought "with respect to tenants' rebates in this matter until the further order" of the court, and required a deposit of the funds in dispute "in an interest-bearing account in the name of" the attorney for plaintiffs, as trustee, "to abide determination" of the matter. Following joinder of issue and entry of a pretrial order, defendant Director moved before the trial judge for (a) an order dismissing plaintiffs' complaint or transferring it to this court, or (b) "an order granting summary judgment that the regulation being contested is constitutional and applies to plaintiffs."

In a letter opinion the trial judge decided in favor of plaintiffs "[o]n the merits" and, on March 6, 1979, filed a judgment which provides that:

1. Under a true construction of the Tenants Property Tax Rebate Act, N.J.S.A. 54:4-6.2 et seq., the plaintiff landlords are not required to make tax rebate to the tenants of the landlords' properties located in the Township [sic] of River Edge in any amount for 1977.

2. This matter should be and hereby is ordered transferred to the Appellate Division to test the judgment herein, as an appeal placing the defendants in the position of appellants.

3. In the interim, the stay by consent order of this Court dated December 30, 1977 is continued subject to such determination as may be made in the Appellate Division.

This judge designated plaintiffs as the appellants and allowed the River Edge Tenants Association to intervene in the appeal.

At the outset we note that we find no sanction in the Rules of Court for the action of the trial judge in transferring

the matter to this court after he had already disposed of the single issue in the case. At this advanced stage of the proceeding we will nonetheless proceed to review the matter as if it had properly come before us.

In essence, plaintiffs' single contention before us is: that while River Edge has a rent control ordinance, the ordinance "has no provision" authorizing "any increase in taxes levied against a landlord [to] be passed on directly to the tenants"; that this leaves them in the same situation as landlords in a municipality having no rent control ordinance, and that, accordingly, they should be treated in the manner provided in N.J.A.C. 5:30-16.5(b) rather than in the manner provided in N.J.A.C. 5:30-16.5(a). We find no merit in the contention and reverse the trial judge's holding to the contrary. A similar issue was raised in Central Towers Co. v. Fort Lee , 160 N.J. Super. 223 (Law Div. 1978). In that case one of the plaintiffs, Central Towers Company t/a Northbridge Park, was the owner of a 14-story, high-rise apartment building in Fort Lee, a municipality having a rent control ordinance, and the other plaintiff, LeCross Associates, was the tenant of a long-term ground lease of another 14-story, high-rise apartment building in the municipality. These plaintiffs contended, among other things, that N.J.S.A. 54:4-6.3(b) "applied in conjunction with the local [Fort Lee] rent control regulations is unfair in that even should the unbudgeted school aid returned for each building be netted against the property tax increase, each building still suffers a net property tax increase, requiring the landlord to make up the deficit." The trial judge held, however, that since N.J.S.A. 54:4-6.4 "clearly mandates that an owner shall provide ...


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