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Pinewood Estates of Michigan v. Barnegat Tp. Leveling Bd.

filed: March 7, 1990.

PINEWOOD ESTATES OF MICHIGAN AND PHILOU ASSOCIATES, LTD., APPELLANTS,
v.
BARNEGAT TOWNSHIP LEVELING BOARD, TOWNSHIP OF BARNEGAT, BARNEGAT TOWNSHIP COMMITTEE



On Appeal from the United States District Court for the District of New Jersey (N.J. Civ. No. 88-2629).

Stapleton, Greenberg, and Garth, Circuit Judges

Author: Greenberg

GREENBERG, Circuit Judge.

FACTS

Appellants, Pinewood Estates of Michigan and Philou Associates, Ltd., appeal from an order of June 20, 1989, granting, pursuant to Fed.R.Civ.P. 12(b)(6), a motion to dismiss by appellees, Barnegat Township Leveling Board, Township of Barnegat and Barnegat Township Committee. Appellants, which own and operate mobile home parks in the Township of Barnegat, New Jersey, rent space in their parks called pads to tenants who own their own mobile homes which they place on the pads. Appellants challenged the Barnegat rent leveling ordinance which they assert, in concert with applicable state law, effects an unconstitutional taking of their property without compensation. We will reverse the order of June 20, 1989, and will remand the matter to the district court.

The State of New Jersey regulates mobile home parks through the Truth-in-Renting Act, N.J. Stat. Ann. § 46:8-43 et seq. (West 1989), dealing with landlord-tenant relationships in general, and the Mobile Home Rights Act, N.J. Stat. Ann. § 46:8C-2 et seq. (West 1989), which is particularly concerned with mobile homes and mobile home parks.*fn1 The Truth-in-Renting Act is designed to facilitate the dissemination of information to tenants regarding their rights and to ensure that dwelling leases do not contain provisions inconsistent with the clearly established legal rights of tenants or responsibilities of landlords. Thus, it is procedural in nature. The Mobile Home Rights Act substantively regulates the relationship between mobile home residents and park operators and, as germane to this case, prohibits park operators from requiring park tenants to move or remove a mobile home solely because of the sale of the home. N.J. Stat. Ann. § 46:8C-3a (West 1989). The park operators may, however, reserve the right to approve buyers of homes in their parks as tenants, but cannot withhold approval unreasonably or exact a commission or a fee for the sale of homes unless earned as an agent pursuant to a written contract. Id. The Mobile Home Rights Act authorizes municipalities to adopt further regulations and licensing requirements for mobile home parks. N.J. Stat. Ann. § 46:8C-8 (West 1989). In a third law, New Jersey limits evictions of mobile home tenants to statutorily defined good cause. N.J. Stat. Ann. § 2A:18-61.1 (West 1987).

The Township of Barnegat has adopted a rent leveling ordinance, Ordinance No. 1977-19, which controls mobile home space rentals. Section 64.2 of the Barnegat Ordinance establishes the following formula for determination of rent:

§ 64.2 Determination of rents.

A. The establishment of rents between a landlord and a tenant to whom this ordinance is applicable shall hereafter be determined by the following provisions:

(1) At the expiration of the tenancy for a mobile home space, no landlord may request or receive any increase in the rental income or additional charges for that mobile home space from any tenant, new or continuing, which is greater than a combination of the following:

(a) Any increased cost to the landlord for utilities.

(b) Any increased cost to the landlord in mobile home space fees or license fee charged by the Township of Barnegat pursuant to any duly adopted ordinance.

(c) Any amount equal to three and one-half percent (3 1/2%) of the previous twelve-month rental income for the mobile home space or the percentage increase in the consumer price index over the twelve-month period ending one hundred twenty (120) days prior to the date of application for said increase, whichever shall be less.*fn2

Notably, the Barnegat Ordinance does not have a provision for vacancy decontrol permitting a mobile park owner to negotiate a new rent when a tenant removes a mobile home from a ...


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