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Franklin Tower One, L.L.C. v. N.M.

October 22, 1997


On appeal from Superior Court of New Jersey, Law Division, Special Civil Part, Hudson County.

Approved for Publication October 22, 1997.

Before Judges Havey, Newman and Collester. The opinion of the court was delivered by Newman, J.A.D.

The opinion of the court was delivered by: Newman

The opinion of the court was delivered by


Defendant, tenant, appeals from a judgment in favor of plaintiff, landlord, in a summary dispossess action, holding that a landlord is not required under N.J.S.A. 2A:42-100 to accept federal Section 8 rental assistance payments, pursuant to 42 U.S.C.A. § 1437f, from an existing tenant where no other tenants in the same building were receiving Section 8 voucher payments. Because we are convinced that Section 8 payments are encompassed by N.J.S.A. 2A:42-100, prohibiting landlords of multi-dwelling units from refusing to rent to an individual because of the "source of any lawful rent payment," and the statutory anti-discrimination provision of 2A:42-100 is not preempted by federal legislation, we reverse.

The relevant facts are not disputed. Sava Holding Corporation (Sava) was the owner of an eighteen-unit residential building located at 211 64th Street in West New York, New Jersey. Every tenant resides in the building subject to an oral month-to-month tenancy. Defendant, who has been a tenant in the building since 1991, is sixty-four years old and unable to work. Her sole income is a monthly grant of Social Security in the amount of $521.80. Defendant also receives between $100 and $200 a month in food stamps. Her monthly rent is $450 per month, but Sava agreed to defendant's request to reduce the rent to $425 per month. With her remaining $89, defendant pays her electric bill and rents a mattress on which to sleep. Eighty-six percent of defendant's disposable income is used for rent and related shelter costs. Defendant applied for subsidy assistance through the Section 8 program when she first became a tenant in 1991. The property is subject to the West New York Rent Control Ordinance.

On April 22, 1996, the West New York Housing Authority issued defendant a Section 8 rental voucher. This voucher provided that the Housing Authority would, pursuant to a contract with the landlord, make monthly payments to Sava to assist defendant in paying the rent. Two days later, defendant tendered the Section 8 voucher and requisite documents to Sava, but Sava refused to execute the documents and accept rental payments from the Housing Authority because it did not want to become enmeshed in the "bureaucracy" of the Section 8 program. Sava had never been involved in the Section 8 rental assistance program nor any other federal or state rental assistance program.

On May 10, 1996, plaintiff filed a summons and complaint in tenancy against defendant for nonpayment of rent. Trial was held on July 30, 1996. On September 13, 1996, the trial Judge issued a written opinion in which he determined that Sava could not be compelled to accept Section 8 vouchers as payment for rents lawfully due and owing. The trial Judge held that, because of the "considerable administrative burden," and because compelled participation in the Section 8 program would alter the preexisting contractual agreement between the parties to plaintiff's detriment, plaintiff had a valid and lawful right to refuse to participate in the Section 8 program. He further concluded that the landlord's refusal did not constitute a breach of its implied covenant of good faith. The trial Judge found that the plain language of N.J.S.A. 2A:42-100 did not encompass Section 8 voucher payments, and that even if it did, the statute was preempted by 42 U.S.C.A. § 1437f(a).

The corresponding judgment was entered on October 7, 1996, in which it was ordered that the total amount of rent due and owing as of September 1996 was $2,125, and that a warrant of removal would issue if defendant did not tender that amount to plaintiff by October 9, 1996. *fn1

On appeal, defendant contends that she is entitled to have the Section 8 voucher payment, pursuant to N.J.S.A. 2A:42-100, accepted as lawful payment for rent. Defendant argues that the statute is not preempted by 42 U.S.C.A. § 1437f because both the state and federal statutes share a common goal of affordable, decent housing for low-income individuals. Defendant further asserts that New Jersey's public policy of protecting the state's most vulnerable citizens from being displaced from affordable housing buttresses its position as an existing tenant to have the Section 8 voucher payments accepted by the landlord. In addition, defendant claims that the landlord's refusal to accept the Section 8 voucher payments constitutes a breach of its implied covenant of good faith.

In M.T. v. Kentwood Const. Co., 278 N.J. Super. 346, 651 A.2d 101 (App. Div. 1994), we recognized that Section 8 voucher payments were encompassed within both the letter and spirit of N.J.S.A. 2A:42-100, which prohibits the refusal "to rent or lease any house or apartment to another person because of the source of any lawful income received by the person or the source of any lawful rent payment to be paid for the house or apartment." Plaintiff attempts to distinguish the Kentwood case, arguing that the landlord there had engaged in unjustifiable discrimination by accepting Section 8 rent payments from other tenants while refusing to accept such payments from M.T., an existing tenant.

In our view, the distinction drawn by plaintiff is of no consequence. Section 8 payments clearly fall within the ambit of N.J.S.A. 2A:42-100. It matters not that plaintiff has no other tenants receiving Section 8 voucher payments in this particular building. This existing tenant is entitled to utilize the Section 8 subsidy to assist in the payment of rent. Plainly stated, N.J.S.A. 2A:42-100 prohibits discrimination as to source of rental payment. Plaintiff must therefore accept those payments and execute the necessary documents to insure that the Section 8 voucher payments continue to be made on defendant's behalf.

We further reject the contention that federal legislation has preempted the provisions of N.J.S.A. 2A:42-100 insofar as they include Section 8 voucher payments. Both 42 U.S.C.A. § 1437f and N.J.S.A. 2A:42-100 share the common goal of seeing that low-income residents obtain affordable, decent housing. The heart of 42 U.S.C.A. § 1437f is aiding low-income residents in obtaining affordable housing. This very issue was addressed in Attorney General v. Brown, 400 Mass. 826, 511 N.E.2d 1103 (Mass. 1987). There, a landlord was charged with violating a statute which prohibited landlords from discriminating against recipients of public assistance or housing subsidies, including rental assistance, "solely because the individual is such a recipient." Brown, 511 N.E.2d at 1105. The landlord claimed ...

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