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Housing Authority & Urban Redevelopment Agency of the City of Atlantic City v. Taylor

February 26, 2002

HOUSING AUTHORITY & URBAN REDEVELOPMENT AGENCY OF THE CITY OF ATLANTIC CITY, PLAINTIFF-RESPONDENT,
v.
VANESSA TAYLOR, DEFENDANT-PETITIONER.



On certification to the Superior Court, Appellate Division, whose opinion is reported at 334 N.J. Super. 573 (2000).

The opinion of the court was delivered by: Zazzali, J.

Chief Justice Poritz PRESIDING

Argued October 23, 2001

In this appeal, we consider 42 U.S.C.A. § 1437a(a)(1) (Brooke Amendment), which limits the amount of rent that public housing tenants can be charged. The question before us is whether the Brooke Amendment prohibits a public housing authority (PHA) from assessing tenants attorneys' fees, late charges, and court costs in an eviction proceeding where the express language of the lease defines such fees as "additional rent."

The Housing Authority and Urban Redevelopment Agency of the City of Atlantic City (Housing Authority) instituted a summary dispossess action against a tenant, Vanessa Taylor, for nonpayment of rent pursuant to N.J.S.A. 2A:18-61.1a. On the date of the hearing, Taylor remitted the past due rent but contested the attorneys' fees, late charges, and court costs that she was obligated to pay under the terms of the lease. The trial court entered judgment in favor of the Housing Authority, holding that federal law did not preempt state contract law and the Appellate Division affirmed, Housing Authority & Urban Redevelopment Agency of the City of Atlantic City v. Taylor, 334 N.J. Super. 573, 580- 81 (App. Div. 2000). We granted certification. 167 N.J. 633 (2001). We also granted the motions of the Housing Authorities of the Cities of Hackensack and Newark, and the motion of Legal Services of New Jersey for leave to appear as amicus curiae.

I.

The facts of this case are not in dispute. Petitioner Vanessa Taylor resides in the Stanley Holmes public housing development in Atlantic City, New Jersey. Respondent Housing Authority is a federally-funded public housing agency that owns and operates the development. Taylor has lived in the development for approximately fifteen years and occupies a three-bedroom apartment with her six children and her granddaughter. Pursuant to the Brooke Amendment, Taylor's rent is calculated at thirty percent of her adjusted gross monthly income which equals $324 per month. 42 U.S.C.A. § 1437a(a)(1)(A). Her lease with the Housing Authority includes the following provisions:

(c) Late Charges – A charge of $20.00 per month for rent, or other charges paid after the 5th calendar day of the month. . . . The Authority shall provide written notice of the amount of any charge in addition to Tenant Rent, and when the charge is due. Charges in addition to rent are due no sooner than two weeks after Tenant receives the Authority's written notice of the charge. . . .

(d) Legal Fees – In the event eviction proceedings are instituted by or on behalf of the Authority for possession of the leased premises due to the tenant's failure to pay rent, utility and maintenance fees, late fees, court costs or any other violation of this lease, the tenant agrees to pay, as additional rent, the reasonable fees charged by the attorney handling the matter, plus costs. The attorney's fees shall include, but are not limited to, the costs of filing, serving and litigating any notice to cease, notice to quit, complaint for possession, or warrant for removal. Attorney's fees shall be charged to the tenant only if the Authority prevails or if it is agreed that such fees will be paid in settlement of the case. [Emphasis added.]

Beginning in February 1999, Taylor fell behind in her monthly rent payments. Consequently, on March 10, 1999, the Housing Authority initiated a summary dispossess action for nonpayment of rent pursuant to N.J.S.A. 2A:18-61.1a. In its complaint, the Housing Authority sought $972 in rent arrearages for the months of February, March, and April. Pursuant to the lease agreement, the Housing Authority also sought $144.50 in attorneys' fees and court costs and $20 in late fees.

On the date of the hearing, Taylor remitted $972 in back rent, but contested the additional charges sought by the Housing Authority. Taylor argued that the charges were not "additional rent" and therefore did not have to be paid to avoid eviction. Specifically, she asserted that the Housing Authority was prohibited from collecting the additional charges by a provision in the Brooke Amendment limiting public housing tenants' total rent to thirty percent of her adjusted gross income.

The trial court held that the Housing Authority was permitted to demand the additional charges as part of the eviction action, declaring that the Brooke Amendment did not preempt state contract law. The court noted that the express language of the lease required Taylor to pay attorneys' fees and costs in the event that the Housing Authority instituted eviction proceedings. Further, the lease specifically characterized such charges as "additional rent." Consequently, the trial court entered a judgment of possession against Taylor, ruling that if she did not deposit $164.50 by the next day, a warrant of removal would issue.*fn1 The Appellate Division affirmed, holding that requiring Taylor to pay attorneys' fees, late fees, and court costs in order to avoid entry of a judgment of possession did not violate the Brooke Amendment. Taylor, supra, 334 N.J. Super. at 580-81. We now conclude that federal law preempts state law and thus compels reversal.

II.

A court must enforce a lease as it is written, absent some superior contravening public policy. Marini v. Ireland, 56 N.J. 130, 143 (1970); Fargo Realty, Inc. v. Harris, 173 N.J. Super. 262, 265-66 (App. Div. 1980); Mury v. Tublitz, 151 N.J. Super. 39, 44 (App. Div. 1977). In the absence of such public policy, the parties are free to define the terms of the lease agreement, including "rent." Fargo Realty, supra, 173 N.J. Super. at 266. New Jersey courts long have held that parties to a residential lease may treat attorneys' fees and other costs related to an eviction as "additional rent." Community Realty Mgmt., Inc. v. Harris, 155 N.J. 212, 234 (1998); Fargo Realty, supra, 173 N.J. Super. at 266; see also Vineland Shopping Ctr., Inc. v. DeMarco, 35 N.J. 459, 471 (1961) (holding that sewerage charges may be characterized in lease as "rent"); University Court v. Mahasin, 166 N.J. Super. 551, 553-54 (App. Div. 1979) (observing that attorneys' fees may be treated as "rent"); Mury, supra, 151 N.J. Super. at 44 (same); Housing Auth., City of Trenton v. Green, 118 N.J. Super. 544, 545-46 (App. Div.), certif. denied, 61 N.J. 159 (1972) (same).

Good cause to evict exists where "[t]he person fails to pay rent due and owing under the lease whether the same be oral or written." N.J.S.A. 2A:18-61.1(a). To establish good cause for eviction, and to require the payment of outstanding late fees to avoid an eviction under N.J.S.A. 2A:18-55, the late fees must either constitute "additional rent" or the "accrued costs of the proceedings." In that event, a court may order payment of rent, including any authorized "additional rent," to obtain dismissal of a summary dispossess complaint and avoid eviction. N.J.S.A. 2A:18-55; see also Harris, supra, 155 N.J. at 234 (stating that landlord could recover such charges as "additional rent" in summary dispossess proceeding if "[t]he written lease . . . expressly permit[s] a landlord to recover reasonable attorneys' fees and damages"). On the other hand, the force of this type of provision may be limited by rent control ordinances or federal law. Harris, supra, 155 N.J. at 242.

The Supremacy Clause of the United States Constitution deems federal law "the supreme Law of the Land." U.S. Const., art. VI, cl. 2. To the extent that state law conflicts with federal law, state law is preempted, "?whether Congress' command is explicitly stated in the statute's language or implicitly contained in its structure and purpose.'" R.F. v. Abbott Labs., 162 N.J. 596, 618 (2000) (quoting Gade v. National Solid ...


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