On appeal from the Superior Court, Law Division, Essex County.
Matthews, Morgan and Morton I. Greenberg. The opinion of the court was delivered by Morton I. Greenberg, J.A.D.
Plaintiffs Branch Brook Gardens Tenants Association and Wanda Tucker, president of the association (hereinafter called "tenants"), brought this action against the Rent Leveling Board (hereinafter called "board") of the Town of Belleville and against Branch Brook Gardens (hereinafter called "landlord"), the owner of a 404-unit apartment complex in Belleville.*fn1 The members of the association as well as Tucker individually are tenants in the apartment complex. The action was generated by the landlord's application in October 1978 for an increase in rent in accordance with the rent leveling ordinance of the Town of Belleville. This application was considered by the board on February 8, 1979 and resulted in a motion being passed granting a rent increase. A further motion with respect to the matter was adopted by the board on March 1, 1979.
This action in lieu of prerogative writ was commenced March 30, 1979. Plaintiffs alleged that the proceedings of February 8,
1979 were procedurally defective in that counsel for the tenants as well as any unrepresented tenants had no opportunity for cross examination, that the board accepted the landlord's figures without inquiry into their validity, that proper findings of fact were not made, that the rent leveling ordinance is self-contradictory, that the hardship provision of the ordinance is void, capricious and unworkable, that the anniversary dates of the tenants' leases were improperly changed and that appropriate notices of the March 1, 1980 meeting were not mailed to the tenants. The trial judge heard oral argument and decided the case by a letter opinion dated August 2, 1979. He reasoned that plaintiffs had 45 days from February 8, 1979 to challenge the action taken that day and that since the case had been commenced on March 30, 1979 it was not timely.*fn2 R. 4:69-6(a). He further held that adoption of the motion of March 1, 1979 did not extend the time for bringing the action since it was simply an explanation of the earlier motion. He also decided that the ordinance was not unconstitutional as it provided a reasonable basis for determining rate increases. The trial judge thus granted summary judgment for defendants and entered the appropriate order September 10, 1979. Plaintiffs appeal from that order.
Disposition of this appeal requires consideration of the rent leveling ordinance and the procedures followed by the board in this case. The ordinance does not preclude a landlord from charging the rent in existence at its adoption. But it does provide that:
At the expiration of a lease or at the termination of the lease of a periodic tenant, or at the annual anniversary of a lease for a term of more than one (1) year (if the lease so provides), no landlord may request or receive a percentage increase in rent which is greater than 5% of the total monthly rents for the preceding calendar year except on formal application to the Rent Leveling Board with notice to all tenants affected.
Periodic tenants will be included under this ordinance and shall be entitled to the same protection as tenants under lease except that a landlord seeking an increase with respect to periodic tenants shall give said tenant thirty (30) days notice with respect to any proposed increase in rent.
A periodic tenant is defined as a person who is a "month to month tenant or any tenant at will, or sufferance, or any tenant having a lease for less than one (1) year." A landlord is required to give notice to the tenant of any proposed rent increase allowed by the 5% clause and the calculations justifying it.
The ordinance has a provision for rent increases above those provided by the 5% provision. It reads as follows:
In the event that a landlord cannot realize a 10% return on his investment based on the annexed formula.*fn3 The Board may grant the landlord a hardship rent increase to meet these payments for good cause shown. Prior to any such appeal to the Rent Leveling Board a landlord must serve notice on all affected tenants at least ten (10) days prior to the hearing date and the landlord must post in the lobby of each building, or if no lobby is present, in a conspicuous place in and about the premises, a notice of said appeal, setting forth the basis for said appeal. Said notice must be posted for at least ten (10) days prior to the published date of the appeal. The affected tenants shall have the right to challenge the basis of the facts for the hardship increase on the hearing date thereof.
In computing rental increase or rental rebates as provided under this Ordinance, the amount so computed shall be rounded off to the nearest dollar.
A landlord shall be limited to one (1) request for a rental increase annually.
FORMULA USED BY THE RENT LEVELING BOARD IN DETERMINING RENT INCREASES.
The total assessed valuation of land and building figure is to be used to determine a 10% return on your investment.
Expenses to be taken into ...