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Liberty Terrace, LLC v. Rent Leveling Board of the Township of North Bergen

April 18, 2011

LIBERTY TERRACE, LLC, PLAINTIFF-APPELLANT,
v.
RENT LEVELING BOARD OF THE TOWNSHIP OF NORTH BERGEN, DEFENDANT-RESPONDENT.



On appeal from the Superior Court of New Jersey, Law Division, Hudson County, Docket No. L-3927-09.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Telephonically Argued December 6, 2010

Before Judges Gilroy and Ashrafi.

Plaintiff Liberty Terrace, LLC, appeals from the March 17, 2010 order that dismissed its complaint in lieu of prerogative writs seeking to reverse defendant Rent Leveling Board of the Township of North Bergen's (the Board) denial of plaintiff's application for a capital improvement surcharge. We affirm.

On March 2, 2007, plaintiff filed an application for a capital improvement surcharge seeking to recoup the costs of installing two new heating boilers and related equipment in its 120-unit residential apartment complex in the Township of North Bergen (Township). On March 17, 2008, the Board adopted a resolution denying the application, determining that plaintiff did not qualify for the surcharge pursuant to that part of the Township's rent control ordinance that exempts recoupment of the costs for repairs, improvements or replacements made by a landlord to comply with the law or to cure a code violation.

On April 29, 2008, plaintiff filed a complaint in lieu of prerogative writs under Docket No. HUD-L-2157-08, challenging the denial of its application. On November 21, 2008, Judge Curran entered an order that: 1) determined Township Ordinance

No. 467-93, "AN ORDINANCE TO REGULATE, CONTROL AND STABILIZE RENTS AND TO CREATE A RENT LEVELING BOARD AND TENANT ASSISTANCE PROGRAM WITHIN THE TOWNSHIP OF NORTH BERGEN AND TO REPEAL ALL PRIOR ORDINANCES REGARDING RENT CONTROL AND REGARDING SECURITY POSTING BY LANDLORDS," as amended and supplemented, constitutional; 2) determined the Board's conclusion that the boilers were installed simply to "cure a code violation" was arbitrary, capricious, and unreasonable; and 3) remanded the matter to the Board pursuant to Georgian Gardens Tenants Ass'n v. Georgian Gardens, 249 N.J. Super. 475 (App. Div. 1991), to consider whether the new boilers contained any special features that benefited the tenants so that the boilers could be considered a capital improvement under the Township's rent control ordinance.

The Board conducted the remand hearing on March 16 and May 18, 2009. At the conclusion of the hearing, the Board adopted a resolution denying plaintiff's application determining in relevant part:

BE IT FURTHER RESOLVED that after carefully considering the testimony of all of the witnesses and after having read the memorandum submitted by counsel and having heard the arguments of counsel, it is the considered determination of the members of the North Bergen Rent Leveling Board that the new boiler does not qualify as a capital improvement pursuant to the North Bergen Rent Leveling Ordinance since it contains no enhanced features which "benefits tenants to some significant degree" as required by Section 2(b) for the following reasons:

A. The fact that the boiler turns on automatically provides no benefit to the tenants because if the older boiler were turned on in a timely fashion, the tenants would have been provided with the same amount of heat and at the same time. Further, the outside temperature is set at 56 degrees thereby requiring the boiler to be manually turned on if the temperature remains at approximately 57 degrees for several days.

B. The fact that the boiler is in four parts does not provide a significant benefit to the tenants because, notwithstanding the alleged ability of the boiler to provide heat in the event one of the sections breaks down, entire boiler has been shut off between 20 and 30 times, sometimes for as many as five hours because of leaks or other problems in the pipes.

C. The fact that the new boiler is safer than the old boiler does not qualify it as a capital improvement. The old boiler was "red-tagged" and shut down because it was unsafe. The new boiler was simply a[n] improvement or replacement required by law to comply with applicable state regulations and, therefore, does not qualify as a capital improvement pursuant to Section 2(b) of the Ordinance.

On August 4, 2009, plaintiff filed its present complaint in lieu of prerogative writs challenging the Board's May 18, 2009 decision denying its application for a capital improvement surcharge. On March 5, 2010, following oral argument on the complaint, Judge Costello rendered an oral opinion that affirmed the Board's decision. The court found that the Board properly addressed the remand issue, and concluded that plaintiff had failed ...


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