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Danmark Inc. v. Township of South Brunswick

Decided: March 2, 1982.

DANMARK, INC., A CORPORATION OF THE STATE OF NEW JERSEY/T/A BARRETT COUNTRY CLUB ESTATES, PLAINTIFF,
v.
TOWNSHIP OF SOUTH BRUNSWICK, RENT LEVELING BOARD OF THE TOWNSHIP OF SOUTH BRUNSWICK: AND ELEANOR JOHNSON, DEFENDANTS, AND BARRETT GARDENS TENANTS ASSOCIATION, INTERVENOR-DEFENDANT



Skillman, J.s.c.

Skillman

This prerogative writ action is a sequel to Orange Taxpayers' Council, Inc. v. Orange , 83 N.J. 246 (1980). In that case the court upheld the validity of a municipal rent control ordinance which required, as a precondition to approval of a rent increase, that a landlord obtain a certification that a multiple dwelling is in "substantial compliance" with municipal housing regulations. The court held that the maintenance of housing which complies with municipal housing regulations bears a proper relationship to the purpose of rent control, which is to enable a municipality's residents to "obtain decent housing within their means." Id. at 257.

The rent control ordinance of South Brunswick Township challenged in this case seeks the same basic objective -- the maintenance of decent housing for municipal residents -- and employs the same general mechanism to achieve that objective -- the denial of the full amount of rent a landlord otherwise would be permitted to charge. However, the operation of the South Brunswick ordinance differs from the Orange ordinance in several significant respects. Whereas the Orange ordinance required a one-time certification of compliance with municipal housing regulations before a rent increase could become effective, the South Brunswick ordinance authorizes a rent reduction at any time during the term of a lease if a housing deficiency is found to exist. Furthermore, whereas the determination of compliance with municipal housing regulations required by the Orange ordinance related to an entire building, a rent reduction may be sought under the South Brunswick ordinance by any tenant of an individual unit in which there is an alleged deficiency. Lastly, whereas the Orange ordinance imposed upon the municipal housing department a responsibility to determine whether any housing deficiency exists, the South Brunswick ordinance imposes that responsibility upon the Rent Leveling Board itself. In short, the primary feature of the South Brunswick ordinance distinguishing it from the ordinance upheld in the Orange Taxpayers' Council case is that it confers quasi -judicial

decision-making authority upon the Rent Leveling Board to adjudicate allegations of individual housing violations.

Plaintiff Danmark, Inc. is the owner of a garden apartment complex known as Barrett Country Club Estates, located in South Brunswick. One of its tenants, defendant Eleanor Johnson, applied for a rent reduction pursuant to the challenged South Brunswick ordinance. The South Brunswick Rent Leveling Board determined after a hearing that there were several housing deficiencies in Johnson's apartment and ordered her rent to be reduced by 5% until those deficiencies were corrected. This prerogative writ action was then initiated. While the complaint is directed in part at the action taken by the Rent Leveling Board on Johnson's individual rent reduction application, the primary thrust of the action has been a broadside attack upon the validity of the South Brunswick ordinance. Recognizing that the primary purpose of the action is to invalidate the South Brunswick rent reduction ordinance, the Barrett Gardens Tenants Association, representing a majority of tenants in the plaintiff's garden apartment complex, applied for and was granted leave to intervene as a defendant.

I

The principal challenge to the South Brunswick ordinance arises from the fact that it confers quasi -judicial decision-making authority upon the Rent Leveling Board to determine the existence of housing deficiencies in individual building units. Plaintiff contends that the adjudication of such claims by a rent leveling board would intrude upon, and hence is preempted by, the jurisdiction conferred by the Legislature upon county district courts to hear disputes concerning the habitability of residential premises. This issue was not raised in the Orange Taxpayers' Council case, probably because the Orange ordinance made approval of a rent increase contingent upon compliance with housing regulations of a whole building rather than individual dwelling units, and such compliance was determined by

certification of a housing official rather than through quasi -judicial proceedings before the Rent Leveling Board.

The statutory provisions upon which plaintiff relies in contending that the South Brunswick ordinance has been preempted are N.J.S.A. 2A:42-85 et seq.*fn1 These provisions authorize a tenant to bring a judicial action based upon an alleged lack of habitability of a rental unit. N.J.S.A. 2A:42-88. If such a claim is upheld, the court may authorize a tenant or group of tenants to deposit rent monies with the court to be used in correcting the condition of uninhabitability. N.J.S.A. 2A:42-92.

The basic approach employed in determining whether municipal ordinances are preempted by state legislation was concisely summarized by former Chief Justice Weintraub in Summer v. Teaneck , 53 N.J. 548 (1969):

A municipality may not contradict a policy the Legislature establishes. . . Hence an ordinance will fall if it permits what a statute expressly forbids or forbids what a statute expressly authorizes. Even absent such evident conflict, a municipality may be unable to exercise a power it would otherwise have if the Legislature has preempted the field. . . But an intent to occupy the field must appear clearly. . . It is not enough that the Legislature has legislated upon the subject, for the question is whether the Legislature intended its action to preclude the exercise of the delegated police power. . . The ultimate question is whether, upon a survey of all the interests involved in the ...


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