JULIE BRANDT v. JOSEPH et al.

 

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-5445-04T55445-04T5

JULIE BRANDT,

Plaintiff-Appellant,

v.

JOSEPH and ELEANOR DIEGO,

Defendants-Respondents.

________________________________________

 

Submitted November 30, 2005 - Decided

Before Judges Parker and Grall.

On appeal from Superior Court of New

Jersey, Law Division, Hudson County,

LT-4862-05

Lawrence B. Diener, attorney for appellant.

Korona, Beides & Eaton, attorneys for

defendants (Jeffrey M. Beides, on the brief).

PER CURIAM

Plaintiff Julie Brandt appeals from the dismissal of her complaint for eviction of defendants Joseph and Eleanor Diego. She alleged that they failed to pay a reasonable rent increase. The trial judge determined that: the condominium unit plaintiff rents to defendants is subject to the Jersey City Rent Control Ordinance; the increase in rent is invalid; and plaintiff must seek approval for any rent increase from the Rent Leveling Board. Because we conclude that the ordinance does not apply to plaintiff, who is the owner of a single condominium unit, we reverse and remand for further proceedings.

The trial judge stated the undisputed facts as follows:

Plaintiff owns one residential condominium unit in a building with [thirty-four] residential units. The property is in Jersey City, and Jersey City has enacted a rent control ordinance. Defendant[s have] been [] tenant[s] in that unit since 1976 . . . . The building was converted to a condominium form of ownership during the tenancy by defendants, but, although defendants are pre-conversion tenants, they have not qualified as "protected" tenants [presumably pursuant to N.J.S.A. 2A:18-61.11 or N.J.S.A. 2A:18-61.31].

[(Footnote omitted)]

On June 7, 2004, plaintiff purchased the condominium occupied by defendants from the owners, Jersey City Partners, the entity which converted the building to condominium ownership in July 1988.

The sole question on this appeal is whether Jersey City's Rent Control Ordinance exempts the owner of a single condominium unit that is located in a building that houses thirty-four such units. No other issues were decided below. "In determining the scope of the [o]rdinance, we consider its language, the probable intent of its drafters, the reasonableness of our interpretation, and the condominium conversion policy of the State as expressed in our statutes." AMN, Inc. of New Jersey v. South Brunswick Twp. Rent Leveling Bd., 93 N.J. 518, 521-22 (1983).

The probable intent of the drafters is protecting tenants from exploitation by landlords when housing is scarce; that is the permissible goal for rent control. See Inganamort v. Borough of Fort Lee, 62 N.J. 521, 527 (1973). The State policy governing condominium ownership precludes a construction of a rent control ordinance that "discriminate[s] against condominium owners." AMN, supra, 93 N.J. at 527 (discussing N.J.S.A. 46:8B-1 to -38).

The terms of the Jersey City Rent Control Ordinance, especially when considered in light of its purpose and the State policy on condominium ownership, do not support the trial judge's construction. Section 260-2 of that ordinance provides that the rent control ordinance governs the "[e]stablishment of rents between a landlord and tenant in housing space in dwellings to which this chapter is applicable . . . ." Section 260-1 defines the operative terms. For purposes of rent control, a "dwelling" is "[a]ny building or structures rented or offered for rent to one or more tenants or family units." But, "[d]wellings with four or less housing spaces" are "[e]xempt from this definition." "Housing space" is defined as "that portion of a dwelling rented or offered for rent for living and dwelling purposes . . . ." The trial judge construed these provisions to apply based on the number of condominium units in the building. We conclude that this ordinance cannot be read to apply to the rent for a condominium unit unless the landlord has five or more rental units in the "dwelling."

The definition of "housing space" is critical to our understanding of the ordinance. Application of the rent controls is dependent upon the number of "housing spaces" and that term is defined to include only rental units. As noted above, "housing space" means a "portion of a dwelling that is rented or offered for rent for living and dwelling purposes . . . ." If the governing body had intended to control rent on the basis of the total number of "units for living and dwelling" in the "dwelling" it would have done so, but instead the governing body carefully limited rent control based on the number of units in the "dwelling" that are "rented or offered for rent." See AMN, supra, 93 N.J. at 526 (noting that applicability of rent control based on physical structure of a building bears no reasonable relationship to the purposes of rent control).

The drafters of this ordinance focused on the number of rental units. That focus cannot be reasonable unless the reference is to the number of units held by each landlord. This is so because the relationship addressed by rent control ordinances is the one between landlord and tenant; the ill sought to be cured by rent control is a landlord's exploitation of a tenant. See Inganamort, supra, 62 N.J. at 527. The Supreme Court has identified the rationale for excluding landlords who offer a small number of units for rent from the scope of rent control regulations:

Professional landlords of large apartment complexes were perceived as being less caring or responsive to tenants' demands than landlords of single-family or two-family rental units. There was less fear of unequal bargaining power between tenants and landlords of single-family or two-family rental units. Further, it was recognized that municipalities are reluctant to subject landlords of single-family or two-family rental units to the burden of complying with the complicated and burdensome provisions existing in most rent control ordinances.

[AMN, supra, 93 N.J. at 526.]

Considering the foregoing reasons for exempting "small-scale landlords" from rent control, the Court reasoned: "[W]e perceive no reason why the drafters of the [o]rdinance would have intended to treat owners of single dwelling units differently, based solely on whether their units are attached or unattached to other units." Id. at 525; see id. at 527. Similarly, there is no apparent reason why the drafters of this ordinance would treat an owner of a single housing space differently based upon whether other condominium owners rent or reside in their units.

Were we to read the ordinance to apply based upon the number of units in the building that are rented or offered for rent rather than on the number of units offered for rent by the individual landlord, the result would be unreasonable. That construction is not required by the terms of the ordinance, would not advance the purposes of the rent control law and would treat condominium owners differently than owners of single-family detached dwellings.

The following examples illustrate the irrationality of an exemption based on the individual landlord rentals. Five individuals who each own one unit in a condominium building with separate living units would each be subject to the rent control ordinance regardless of the number of units in the building. In contrast, one individual who owns four rental units in an identical building would not be subject to rent control unless another owner also rented a unit, and five individuals who own single-family, detached dwellings located on the same city street also would be exempt. Because such distinctions do nothing to further the purposes of rent control, we decline to construe the ordinance, which is at best ambiguous on this point, as if its drafters intended such unreasonable results. See id. at 525-29 (rejecting a reading that would both "lead to unfair, illogical, and anomalous results" and discriminate against condominium owners); see also Nutley, supra, 206 N.J. Super. at 245-56; G.D. Management Co v. Negri, 182 N.J. Super. 409, 412 (App. Div. 1982).

The Legislature has provided special protection from rent increases for tenants who remain in a building after conversion to condominium ownership. A separate, comprehensive legislative scheme "regulat[es] the creation, conversion and operation of condominiums" and regulates increases in rent charged to pre-conversion tenants. AMN, supra, 93 N.J. at 529 (quoting Plaza Joint Venture v. City of Atlantic City, 174 N.J. Super. 231 (App. Div. 1980)); see id. at 532 (discussing N.J.S.A. 2A:18-61.1 to -61.21 and N.J.S.A. 2A:18-61.22 to -61.39); G.D., supra, 182 N.J. Super. at 412-15. In this case, the trial judge found that "although defendants are pre-conversion tenants, they have not qualified as 'protected' tenants" under the relevant statutes. Defendants have not argued, as an alternate basis for affirmance of the trial judge's ruling, that the trial court erred in determining protected status.

 
The judgment dismissing the complaint is reversed, and the matter is remanded for further proceedings in accordance with N.J.S.A. 2A:18-61.1.

The judge prepared a written decision dated May 2, 2005, setting forth his findings, conclusions and memorializing his dismissal of the case. Although no order was entered, we exercise our jurisdiction based upon a Clerk's Certificate reporting that the case was dismissed and judgment entered in the Hudson County Superior Court, Special Civil Part, Jersey City, New Jersey on May 2, 2005.

Although the judge quoted the definition of "housing space," he did not apply it when construing the exemption for "[d]wellings with four or less housing spaces." The judge relied entirely on the number of living units in the building without considering the number of rentals at all. In effect, that construction rendered meaningless the reference to the number of units rented or offered for rent. See Strasenburgh v. Straubmuller, 146 N.J. 527, 539 (1996); cf. Nutley Inv. Group v. Rent Leveling Bd. of the Twp. of Nutley, 206 N.J. Super. 240, 242 (App. Div. 1985) (construing an ordinance that, "[r]ead literally" was based on the number of units in a building).

At least this is the case where each owner acts independently and title is not held so as to disguise unified ownership of the several units.

Defendants simply state that they are entitled to the protection of the "Anti-Eviction Act" and assert that the trial judge did not err in reading the ordinance literally.

(continued)

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A-5445-04T5

 

January 4, 2006