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Rosen v. Hoboken Rent Leveling and Stabilization Board

September 12, 2008


On appeal from the Superior Court of New Jersey, Law Division, Hudson County, Docket Nos. L-6334-05, L-5343-06, L-5344-06.

Per curiam.


Argued April 28, 2008

Before Judges Stern, A. A. Rodríguez and C. S. Fisher.

In these appeals, we construe some of the provisions of the City of Hoboken's Municipal Rent Control Ordinance, §§ 155-1 to 155-34 (the Ordinance). Specifically, we affirm the Board's construction of the Ordinance to require that the filing of a rent decontrol certificate and a current registration statement are prerequisites to the grant of a rent decontrol increase.

Charles and Suzanne Rosen (Landlords) purchased an eight-apartment dwelling in Hoboken in 1979. It is undisputed that the rental units in the building are subject to the Ordinance. The Ordinance, which was adopted in 1973, provides that the owner of the dwelling must file a registration statement with the Division of Rent Leveling and Stabilization every year by October 1st. Hoboken Gen. Ord. § 155-30A. The registration statement must disclose, among other things, the name of each tenant and the apartment number, the number of rooms in each unit, the current rent paid for each unit, and the date and amount of the last rent increase. Ibid. Failure to file the registration statement is punishable by a $500 fine. Id. at § 155-30C. Thereafter, the landlord may increase the rent on a yearly basis not to exceed 7.5% of the current rent, or a formula that is a function of the Consumer Price Index. Id. at § 155-5. The only exception to this limitation on rent increase is found at Section 155-31, which addresses a rent decontrol exemption as follows:

Provided that a dwelling is registered in accordance with § 155-30 upon the vacation of a residential apartment unit by a tenant, the apartment unit shall become decontrolled and exempt from the provisions of this chapter for the new tenant's initial rent; provided, however, that said rental shall be limited to an increase of twenty-five percent (25%) over the last rental paid by the tenant who voluntarily vacated the rental unit[.] [Hoboken Gen. Ord. § 155-31.]

Further, Section 155-33 requires that:

[w]hen any apartment unit is decontrolled under this Article, the landlord shall file a certificate . . . indicating the name of the vacating tenant, the existing rental, the circumstances under which the tenant vacated the apartment unit, the name of the new tenant, the new rental and the effective date of the new rental. [Id. at § 155-33.]

In April 2005, Susan Livesay, the tenant in Unit 2E, requested a Legal Rent Calculation (LRC) for her unit, pursuant to the Ordinance. When Livesay moved into Unit 2E in February 1999, her monthly rent was $1,400. The rent was increased by $35 in 2000, by $46 in 2001, by $29 in 2002, by $30 in 2003, by $43 in 2004, and by $17 in 2005. Thus, she paid $1,600 rent per month in 2005.

The Rent Leveling Officer, Carole McLaughlin, made a determination that the appropriate rent for the year 2005 was $1,056. Following the Ordinance, McLaughlin used a 1982 registration, the earliest known registration, to calculate the rent. The 1985 registration listed Unit 2E as being occupied by the superintendent and as having no rent. Therefore, the base rent for 1985 was determined by averaging the rent in other comparable units. McLaughlin also determined that a 25% decontrol increase would be allowed for 1994, pursuant to Section 155-33 of the Ordinance.

Landlords appealed to the Hoboken Rent Leveling and Stabilization Board (Board) challenging: (1) the amount of the starting rent, which served as the basis for future rent increases; and (2) the denial of a vacancy decontrol allowance. They argued that the fair market value of the unit should be used to determine legal rent, not an average of the other rents in the building.

The Board upheld McLaughlin's determination. It found that Landlords were not in compliance with Section 155-33 because no vacancy decontrol certificates were on file and no annual statement had been filed prior to the tenant's request for a LRC. The Board also found that it was bound by prior holdings of the New Jersey Superior Court interpreting the Ordinance as requiring a landlord to file both an annual registration and a vacancy decontrol certificate in order to obtain a vacancy decontrol increase. However, the Board did not identify the decisions, which are apparently unpublished.

Landlords challenged the Board's decision by filing an action in lieu of prerogative writs in the Law Division (the Livesay matter). While this action was pending in the Law Division, McLaughlin discovered a registration from 1982. Because Section 155-1 of the Ordinance requires that the oldest registration on file be used to calculate legal rent, there was a new computation. McLaughlin reversed her determination regarding the 25% vacancy decontrol allowance and disallowed it in 1994. Thus, ...

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