This is an action in lieu of prerogative writs to review the action of the Union City Rent Leveling Board (Board) in granting a 15% rent reduction based upon reduced services and maintenance. The landlord attacks the action procedurally as failing to follow the requirements of the ordinance and substantively as being unsupported in the record.
Section 12-10.5 of the Union City Rent Stabilization Ordinance reads as follows:
Rent Reduction Appeal; Decline in Care and Services. Whenever services, care or maintenance decline in any dwelling, any tenant may apply to the rent stabilization board for a decrease or reduction in rent. True copy of such notice shall be served upon the landlord and all other tenants in such building simultaneously setting forth in detail the reasons for such application. At least one month shall elapse prior to the date fixed for hearing thereon.
Plaintiff is the owner of a 400-unit high-rise residential apartment at 100 Manhattan Avenue, Union City, known as the Doric. On January 6, 1981 tenants of Doric applied to the Board for a rent reduction due to alleged decreases in services and maintenance. There is no evidence that copies of the notice were served upon the landlord and other tenants, although a hearing set for January 7, 1981 (the day following the filing of the notice with the Board) was adjourned until January 21, 1981
to give the landlord an opportunity to obtain an attorney. It appears that the landlord's attorney examined the complaints on January 20, 1981. Although no transcript is available, it appears that the adjourned hearing was held on January 21, 1981, at which time a member of the Union City Fire Department testified as to building inspections he made and violations he noted, as, for example, tenant property being stored in electrical rooms. Apparently a report of the Bureau of Housing Inspection showing a November 20, 1980 inspection and follow-up examinations was also introduced and made part of the record. Whether this report was that of the Fire Department representative is unclear since it is unsigned and deals primarily with maintenance problems, such as loose bricks, leaks, needed painting and the like. It is an apartment-by-apartment listing of every violation of the Housing Code that could be found -- listed quantitatively but not qualitatively; that is to say, one cannot tell from the November 20, 1980 report the magnitude of any particular violation. In addition, testimony was apparently taken from tenants with respect to lack of security, reduction of reasonable maintenance, landscape deterioration, inferior television reception, lack of a master key, late opening of the pool, lack of repairs, debris in hallways and incinerators and generally poor and inadequate maintenance. Despite the landlord's objection to the lack of notice required by the ordinance, the Board proceeded to make findings of marked deterioration of services and maintenance throughout the building and ordered a 15% reduction of rent effective April 1, 1981, retroactive to February 1, 1981, unless the violations were abated by March 15, 1981, such abatement to be determined by inspectors from the appropriate city departments. On March 13, 1981, finding less than 30% of the violations had been abated, the Board granted the rent reduction.
While the actions of the Rent Leveling Board are presumed to be correct and will withstand judicial interference in
the absence of a showing that they are arbitrary, capricious and unreasonable, see In re Millburn Tp. , 110 N.J. Super. 330, 335 (App.Div.1970), the determination must be capable of standing judicial review, Application of Howard Savings Institution of Newark , 32 N.J. 29, 52 (1960). Since the power of the Board derives from the ordinance, it is also axiomatic that the Board's actions must conform to the requirements of the mandate which is the source of its existence.
In the instant case, from a procedural point of view, the Board's action was defective in two fatal respects. In the first place, the Board failed to comply with those provisions of § 12-10.5 which are intended to insure that the landlord has proper notice and an opportunity to be heard -- in other words, that the landlord receives due process. When the complaints were filed with the Board on January 6, 1981, notices should have been served upon the landlord and all of the tenants in the building setting forth in detail the reason for such application, and a date for hearing should have been fixed not sooner than one month later. The Board's failure to follow this procedure not only violated the provisions of the ordinance but unfairly impaired the ability of the landlord to meet the charges and obtain a fair hearing. In the second place, the Board failed to make a record such as would ...