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Parsippany Hills Associates v. Rent Leveling Board of Township of Parsippany-Troy Hills

Decided: March 16, 1984.

PARSIPPANY HILLS ASSOCIATES, A NEW JERSEY LIMITED PARTNERSHIP AND CLEARVIEW GARDENS ASSOCIATES, A NEW JERSEY LIMITED PARTNERSHIP, PLAINTIFFS-APPELLANTS,
v.
RENT LEVELING BOARD OF THE TOWNSHIP OF PARSIPPANY-TROY HILLS AND TOWNSHIP COUNCIL OF THE TOWNSHIP OF PARSIPPANY-TROY HILLS, AND THE TOWNSHIP OF PARSIPPANY-TROY HILLS, A MUNICIPAL CORPORATION, DEFENDANTS-RESPONDENTS



On appeal from Superior Court, Law Division, Morris County.

Botter and O'Brien. The opinion of the court was delivered by O'Brien, J.A.D.

O'brien

The trial judge affirmed a decision of defendant township council which had affirmed a decision of defendant rent leveling board. That decision required plaintiffs-appellants landlords to rebate to their tenants 75% of the net reduction in real estate taxes resulting from decisions by the Tax Court which reduced assessments on their properties. The action was dismissed against the rent leveling board on the court's own motion. Rebates were ordered for the years 1977, 1978 and 1979. Although the reduced taxes would also apply to 1980 and 1981, the rent leveling board did not deal with those years and the trial judge remanded to the rent leveling board for consideration of those years.

Prior to the judgments of the Tax Court on the landlords's tax appeals, appellants had rebated to their tenants 65% of the amount by which their taxes went down in the years 1977, 1978 and 1979, as compared with the base year of 1976, pursuant to the Tenants' Property Tax Rebate Act, N.J.S.A. 54:4-6.2 et seq.

The decisions of the Tax Court were rendered on May 22, 1980 as to Clearview Gardens Associates (Clearview), and May 29, 1980 as to Parsippany Hills Associates (Parsippany), and dealt with the assessments of these properties for the years

1975, 1976, 1977 and 1978. The parties agreed to the same reductions for 1979 and 1980.*fn1

The assessment of the Parsippany property was reduced from $1,400,000 to $1,007,925 for 1975, 1976 and 1977, and to $971,535 for 1978, 1979 and 1980. Clearview's assessment was reduced from $360,000 to $260,855 for 1975, 1976 and 1977, and to $251,437 for 1978, 1979 and 1980. The parties agree that the dollar amounts of tax reductions which the township council ordered to be rebated to the tenants for the pertinent years are as follows:*fn2

YEAR PARSIPPANY CLEARVIEW

1977 $18,270.70 $4,639.99

1978 19,752.24 5,004.75

1979 19,795.08 5,037.32

The municipality adopted a rent leveling ordinance (No. 73:449) on April 24, 1973. Section 5 of that ordinance provided, in pertinent part,

A landlord may seek a tax surcharge from a tenant because of an increase in municipal property taxes.

A formula was provided for computation of the surcharge. Section 6 required the landlord seeking a surcharge to notify his tenant of the calculations. Section 7 provided that the tax surcharge be paid in six monthly payments commencing July 1 of each year. Section 8 provided that the tax surcharge shall not be considered rent for purposes of computing cost of living rental increases. Section 9 read as follows:

In the event a tax appeal is taken by the landlord and the landlord is successful in said appeal and the taxes reduced, the tenant shall receive fifty (50) percent of said reduction as applied to its tax portion, after deducting all expenses incurred by landlord in prosecuting said appeal.

On November 12, 1973 the municipality adopted Ordinance No. 73:472, which amended Section 9 to increase the percentage from 50% to 75%.

On October 12, 1978 the municipality adopted Ordinance No. 78:24, amending the rent leveling ordinance, effective October 31, 1978. Sections 5, 6, 7 and 8 were repealed. The new Section 5 established a form of vacancy decontrol and Section 6 authorized the landlord to add permitted C.P.I. formula increases to increases allowed under the vacancy decontrol. Section 7, as amended, reads as follows:

The landlord can, at the time of the next permissible rent increase, add to the base rent the total tax surcharges previously passed through or reserved.

Section 8 provided that the landlord waives permissible rent increases not charged and Section 9 was ...


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