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Wednesday, April 8, 2020

Newark rent-control law can prohibit 'additional rent' collected by landlords

State Court

By Karen Kidd | Aug 21, 2019


NEWARK, N.J. (Legal Newsline) –  Late fees, attorney’s fees and other costs collected from tenants as “additional rent” can be barred in New Jersey's rent-controlled cities, according to a recently published superior court decision.

In its 13-page decision written by Essex County Superior Court Judge Stephen L. Petrillo, the court ruled that collecting "additional rent" from tenants who are being evicted would violate Newark's rent control ordinance if the fees caused the total due to exceed the maximum allowed by the ordinance.

The court handed down the decision in the case of the suburban New York City-based property management company Opex Realty Management and its evicted tenants, Robert and Mildred Taylor. Opex's case against the Taylors will be dismissed after the couple pay Opex their outstanding rent due "without consideration of late and legal fees," the decision said.

"This case squarely presents an unresolved issue of landlord-tenant law with important implications in a fast-changing residential rental market in our state’s largest city," Petrillo wrote in the court's opinion. 

"The court must determine whether the city of Newark’s rent control ordinance is violated when a landlord seeks to evict a tenant for non-payment of late and legal fees, deemed 'additional rent' in the lease, if the addition of the 'additional rent' would cause the total rent due to exceed the maximum rent allowed by local ordinance."

The Taylors argued that Opex should not claim late and legal fees as rent "but then deny these same charges constitute rent under Newark’s rent control ordinance," the decision said. 

"The court agrees," Petrillo wrote.

Opex and other Newark-area landlords possess a contractual remedy regarding late and legal fees for "contract damages" if rent goes unpaid, the decision said.

"The landlord is not foreclosed from seeking a money judgment in the appropriate court," Petrillo wrote. "To be clear, it is not this court’s opinion that late fees and legal fees, to name just two potential items of 'additional rent,' may never be collected as 'additional rent' in this or some other similar rent control paradigm. Rather, it is this court’s ruling that rent, additional or otherwise, may not ever exceed the maximum allowable cost provided by an applicable rent control ordinance."

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U.S. Superior Court of New Jersey - Essex County