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Block 268, LLC v. City of Hoboken Rent Leveling and Stabilization Board

June 12, 2008

BLOCK 268, LLC, PLAINTIFF-RESPONDENT,
v.
CITY OF HOBOKEN RENT LEVELING AND STABILIZATION BOARD, CITY OF HOBOKEN, CAROLE MCLAUGHLIN, DIVISION CHIEF CITY OF HOBOKEN, DEPARTMENT OF HUMAN SERVICES, RENT LEVELING AND STABILIZATION, DEFENDANTS, AND RAUL G. PEREZ, JR. AND ELIZABETH L. PEREZ, DEFENDANTS-APPELLANTS.



On appeal from the Superior Court of New Jersey, Law Division, Hudson County, Docket No. L-3146-06, whose opinion is published at ___ N.J.Super. ___ (Law Div. 2008).

The opinion of the court was delivered by: R.B. Coleman, J.A.D.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

APPROVED FOR PUBLICATION

Submitted December 12, 2007

Before Judges Parker, R.B. Coleman and Lyons.

Defendants Raul and Elizabeth Perez (collectively "the Perezes") appeal from a November 8, 2006 order granting plaintiff Block 268, LLC (Block 268) summary judgment against defendants City of Hoboken Rent Leveling and Stabilization Board (the Board), the City of Hoboken (the City), Carole McLaughlin (McLaughlin), the division chief of the Board, and the Perezes (collectively "defendants").*fn1 Only the Perezes have appealed. After reviewing the record in light of the arguments advanced on appeal, we affirm.

The Perezes are tenants in one of two buildings owned by Block 268, located at 1500 Hudson Street, Hoboken, that are commonly known as the Hudson Tea Buildings. BDLJ Associates, LLC (BDLJ) owned both buildings from 1998 to 2004. In 1998, BDLJ renovated and converted the buildings from industrial and commercial use to residential buildings containing 525 units. In March 2000, Barry Light (Light), wrote to the construction official of Hoboken to give notice of his claim, pursuant to N.J.S.A. 2A:42-84.1, for exemption from the rent control ordinance that would have otherwise applied to the two buildings.

In February 2004, the Perezes entered into an eighteen-month lease with BDLJ for an apartment in the 1500 Hudson Street building. The lease contained a provision indicating that the unit was exempt from the rent control pursuant to the Act. Specifically, paragraph 31 of the Perezes' Lease, entitled "EXEMPTION FROM RENT CONTROL," provides as follows:

The Unit is exempt from the provisions of Hoboken's Rent Control Ordinance and will be exempt from any future rent control, rent stabilization or rent leveling ordinance of the City of Hoboken pursuant to N.J.S.A. 2A:42-84.1 et seq. for a period of thirty years from completion of construction of the building.

Furthermore, immediately prior to the Perezes' execution of the Lease, they executed and acknowledged a "Notice to Prospective Tenants," which also advised them that the Property was exempt from the provisions of the Ordinance. Specifically, the "Notice To Prospective Tenants," signed by Raul Perez on February 3, 2004, provides as follows:

BDLJ Associates, LLC is exempt from the provisions of Hoboken's Rent Control Ordinance and will be exempt from any future rent control, rent stabilization or rent leveling ordinance of the City of Hoboken pursuant to N.J.S.A. 2A:42-84.1 et seq. for a period of thirty years from completion of construction of the building. The undersigned is considering executing a Lease for Unit 1L in the project known as "The Hudson Tea Building" . . . and has been furnished a copy of this notice by the Landlord prior to executing the Lease to the Unit.

In May 2004, BDLJ sold the buildings to Toll Brothers, Inc. Approximately two months later, Toll Brothers sold the buildings to Block 268. In September 2005, Block 268 filed a "Master Deed" converting the apartments to condominiums. Block 268 used a "non-eviction plan" to effectuate the conversion, allowing existing renters to remain in occupancy after the conversion was completed.

The Perezes' lease expired in August 2005, and they signed an option to renew form, indicating that they agreed to continue leasing the unit at an increased rate of $3,050 per month. BDLJ subsequently agreed to change that rate and offered the Perezes a monthly rent of $2,970, an amount not calculated in accordance with the rent control ordinance. Despite executing the option to renew, the Perezes believed their unit was subject to rent control and refused to sign the new lease. On January 15, 2006, the Perezes filed a request with McLaughlin, seeking to have their rent calculated in accordance with the Hoboken Rent Control Ordinance (the Ordinance). In response, McLaughlin informed the Perezes that State law precluded her from imposing a rent control regulation on their dwelling. The Perezes appealed McLaughlin's determination to the Board and requested that the Board determine that their unit "falls under the rent control laws" and that the Board make a rent calculation.

At a hearing on May 10, 2006, the Board entertained arguments from Block 268 and the Perezes. The Board voted in favor of the Perezes, finding that their unit was subject to rent control. That determination ...


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