On appeal from Superior Court, Law Division, Hudson County.
Skillman and Landau. The opinion of the court was delivered by Landau, J.s.c. (temporarily assigned).
This appeal tests whether the entire lump sum payment after death of a public sector pensioner should be considered as part of annual income for the purposes of determining whether the beneficiary, a senior citizen tenant, may be granted protected status from a condominium conversion plan under N.J.S.A. 2A:18-61.24(c) and N.J.A.C. 5:24-2.3(c). We conclude that the entire lump sum should not be considered for purposes of such income determination, and accordingly, reverse the trial court's contrary holding, but direct a remand for hearing and findings consistent with this opinion.
FACTS AND PROCEDURAL HISTORY
On June 1, 1984, the Prudential Insurance Company of America (Prudential), brought an action for possession against appellant Marion Klein (Klein) in the Special Civil Part. Klein, age 64, was a tenant in a Guttenberg building known as Galaxy Towers then in conversion to condominium ownership. See, N.J.S.A. 2A:18-61.1(k). On June 19, 1984, that matter was transferred to the Law Division under N.J.S.A. 2A:18-60.
On June 12, 1984, the Guttenberg Rent Control Board purported to grant Klein protected tenancy status as a qualifying senior citizen. See N.J.S.A. 2A:18-61.22, et seq. Following the action of the Guttenberg Rent Control Board, Prudential instituted
an action in lieu of prerogative writ challenging the Board's determination. This matter was consolidated with the suit for possession. Upon motion, the trial judge remanded the matter to the Board for a hearing, findings of fact and conclusions of law. A hearing was conducted and on July 29, 1985, the Board again granted protected tenancy status to Klein. This determination was reversed by the trial judge. Eviction was stayed pending appeal.
It is not disputed that the statutorily required notices of intent to convert, plan of conversion, and notice to quit were timely delivered to and received by Klein, and her late husband Herman, a former mayor of Guttenberg, who passed away prior to Klein's application for protected tenancy status. It is also clear that under the provisions of the "Senior Citizens And Disabled Protected Tenancy Act" (S.C.D.P.T.A.) (N.J.S.A. 2A:18-61.22 et seq.), Klein would otherwise be eligible for protection from the condominium conversion, subject to demonstrating that her "tenant's annual household income" for 1983, the last full calendar year before Klein's application, was less than $33,102.*fn1
Under the applicable regulation, N.J.A.C. 5:24-2.3(b)(1)(i), income documentation may include, but is not limited to, copies of income tax returns, and certification of amounts received in social security payments or in payments "from other sources of non-taxable income." Under N.J.A.C. 5:24-2.3(c),
taxable income shall include all income subject to the New Jersey Gross Income Tax, without allowance for any deductions or exemptions. Non-taxable income shall include without limitation, any excluded pension payments, any social security, SSI or Railroad Retirement payments, any payments from any public assistance program and any interest on tax exempt securities or accounts.
For 1983, Klein reported gross income on her State income tax form in the amount of $191,737. This included a $182,240 lump sum received under the public pension plan of her deceased husband, representing the unpaid amount in his "account" payable to his beneficiary. Klein could not herself choose a form other than lump sum distribution. In 1983, she received social security benefits amounting to $8,800, and the 1983 New Jersey gross income tax ...