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Gina Marie, L.L.C v. City of Hoboken

October 11, 2011

GINA MARIE, L.L.C., PLAINTIFF-APPELLANT,
v.
CITY OF HOBOKEN, HOBOKEN RENT LEVELING AND STABILIZATION BOARD AND AMY RYAN, DEFENDANTS-RESPONDENTS.



On appeal from the Superior Court of New Jersey, Law Division, Hudson County, Docket No. L-2146-09.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued September 13, 2011

Before Judges Carchman, Fisher and Baxter.

Plaintiff Gina Marie, L.L.C. (Gina Marie) appeals from a July 19, 2010 Law Division order that upheld a February 25, 2008 decision of the Hoboken Rent Stabilization Board (Board). The Board concluded that in the calculation of the maximum rent plaintiff was entitled to charge on the subject property, plaintiff was not entitled to the benefit of any changes in occupancy unless plaintiff, or its predecessors, had filed the annual registration forms and vacancy decontrol certificates required by the applicable Hoboken Rent Control ordinance. We reject plaintiff's claim that the Board's application of the ordinance was arbitrary and capricious, and affirm the Law Division order under review.

I.

On December 1, 2005, Gina Marie purchased a multi-unit apartment building at 608 Madison Street in Hoboken. At the time Gina Marie's principal purchased the building, she was aware that the building was rent-controlled, and that the setting of rents was subject to the provisions of the Hoboken Rent Control ordinance. See Hoboken Municipal Code §§ 155-1 to 155-34 (2009) (RCO).*fn1 The tenant in apartment #10 was defendant Amy Ryan, who had been living there since 1993.

On December 1, 2005, Gina Marie notified Ryan that it had recently purchased the building and that Ryan's rent would be increased to $758 per month, effective immediately. Two years later, on January 23, 2008, Ryan requested the Hoboken Rent Control Administrator (Administrator) to calculate the maximum legal rent Gina Marie was entitled to charge. On February 25, 2008, the Administrator notified Ryan that the maximum rent for her apartment was $289 per month.

Upon receiving such notice from the Board, the principal of Gina Marie met with the Administrator to review the Administrator's file concerning Ryan's apartment, and to determine whether there were any vacancy decontrol certificates in the file. Whenever a tenant has vacated a residential apartment under circumstances specified by the RCO, the RCO authorizes a "vacancy decontrol," which in turn allows for a twenty-five percent increase in the rent; however, the benefit of the vacancy decontrol is not available unless the required certificates are present in the file. Gina Marie asserted that it was entitled to the benefit of vacancy decontrols for both 1982 and 1985, when existing tenants had moved out and new tenants had moved in, and also for 1993, when a prior tenant had vacated the premises and defendant Ryan had moved in. The file contained no vacancy decontrol certificates. The annual registration statements in the file were limited to 1981, 1985, 1994, 2001, 2002, 2003 and 2004.

Because there were no vacancy decontrol certificates in the file, the Administrator advised Gina Marie that the only increases in the initial rent of $114 that she would permit were annual cost-of-living increases. The Administrator specifically rejected Gina Marie's effort to provide extrinsic evidence that tenants had voluntarily moved out in 1982, 1985 and 1993.

Having received an adverse decision from the Administrator, Gina Marie sought a hearing before the Board. After some intervening proceedings between the parties that are not relevant to the issues on appeal, the Board conducted a hearing. At the conclusion of that hearing, the Board affirmed the Administrator's determination that the maximum allowable rent was $289 per month.*fn2

On April 27, 2009, Gina Marie filed a complaint in lieu of prerogative writ challenging the Board's February 11, 2009 decision. Gina Marie argued before the Law Division, as it argues before us on appeal, that during the twenty-five years preceding Ryan's request for a calculation of the legal rent, the Board routinely accepted extrinsic evidence of vacancy decontrols without insisting that the vacancy decontrol certificates required by section 155-33 of the RCO be present in the file. Gina Marie contended that the Board's abrupt change of position, and its sudden insistence that the vacancy decontrol certificates be present in the file before the landlord could achieve the twenty-five percent rent increase, constituted arbitrary and capricious Board action.

At the conclusion of oral argument, Judge DeCastro issued a comprehensive written opinion in which she concluded that: the RCO serves a valid public purpose by preventing exorbitant rent increases; the filing of the vacancy decontrol certificates required by section 155-33 of the RCO ensures that the tenant vacated the premises only under the circumstances that entitle a landlord to the benefit of the twenty-five percent vacancy decontrol; without the filing of such certificates, a vacancy decontrol might be applied in error; and the Board's February 11, 2009 decision "was based upon a correct interpretation of the ordinance and thus it was not arbitrary, capricious or ...


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