IMPORTANT UPDATES TO NEW JERSEY COMMUNITY ASSOCIATION AND LANDLORD-TENANT LAW

By Jennifer L. Alexander, Esq. April 14, 2020 Posted in Community Association Law, Landlord/Tenant Law Share

Yesterday was a heavy calendar for the Senate and Assembly. A number of impactful bills were up for consideration. Our office is providing you an update on bills relevant to you. Many of these bills were considered in the Assembly and the Senate simultaneously yesterday. They would provide relief for New Jersey residents and businesses due to the COVID‑19 pandemic. Please see the bullet-point summary of the bills that were up for consideration yesterday:

• S-2330 / A-3908

This bill is titled “COVID‑19 Financial Security for Consumers Act.”

1. It was held for further consideration, and it was not voted upon yesterday.
2. It is heavily disputed by community associations and landlords alike.
3. It would prevent instituting, and even threatening collection actions against New Jersey residents for 120 days after the end of the State of Emergency or Public Health Crisis.
4. This bill could have a detrimental impact on community associations or landlords as it would disincentivize residents from making rent or maintenance fee payments. 

• S-2332
  1. This bill was passed by Senate unanimously.
  2. It creates the “2020 New Jersey Emergency Rental Assistance Program.”
  3. The bill provides $100,000,000.00 of relief funds to the DCA for distribution to residents in need of rental assistance.
  4. The program created by the bill would pay certain amounts of rent for tenants who: 
     1. are at least thirty (30) days past due on a rent payment;
     2. are unable to pay rent without assistance; and
     3. have suffered a demonstrable loss in come due to the ongoing COVID‑19 crisis.

1. It modifies the Homeless Prevention Program (“HPP”)toallowlow‑,moderate‑, and medium-incomeNewJerseyans to be able to obtain relief funds.
   1. “Medium-income” is defined as those households with greater than 80% Area Median Income (“AMI”) and up to 120% AMI.
2. This bill maintains strong support all around, because, among other reasons, it applies to residents who have actually faced a hardship. 

• S-2363 / A-3921
  1. This bill was passed unanimously in Senate and close to unanimously in the Assembly.
  2. It allows for a three (3)-month rent suspension for certain commercial tenants only.
  3. It allows distressed commercial tenant to repay the amounts over six-to-nine (6‑9) months.
  4. This bill makes it a violation of the New Jersey Consumer Fraud Act for tenants to misrepresent their financial situation.
  5. Under this bill, a “distressed small business tenant“ refers to a business that, unless adjusted by the rent suspension executive order:
     1. employed 50 persons or fewer on February 10, 2020;
     2. leases real property for non-residential purposes; and

• as a result of the COVID‑19 pandemic, does not have monthly revenue that exceeds eighty percent (80%) of the tenant’s reasonable expectations of monthly revenue during the same season prior to the COVID‑19 pandemic.  

• S-2340
  1. This bill was passed by the Senate unanimously, but not provided to the Assembly.
  2. The bill authorizes the Governor to permit mortgage forbearance and payment responsibility reduction for residential property owners and tenants during the COVID‑19 crisis.
  3. Similarly, it would allow the Governor to issue an executive order allowing homeowners to apply for mortgage forbearance, so long as they have been impacted by the COVID‑19 crisis.
  4. The mortgage forbearance would not exceed three (3) months, and during that time mortgage and interest payments would be suspended.
  5. Landlords with buildings registered as multiple dwellings would be able to apply for this forbearance, but only if they commit to providing any emergency-impacted tenant in their property with an emergency rent reduction. The executive order passed pursuant to this bill could prevent landlords from charging late fees to residential tenants. 

• S-2341
  1. This bill was passed by the Senate unanimously, but not provided to the Assembly.
  2. This bill would allow the Governor to restrict rental increases on certain commercial tenants during emergency circumstances.
  3. This bill enhances the Governor’s similar, existing authority over rent increases on residential tenants.
  4. Under current law, the Governor may issue a Notice of Rent Protection Emergency (“NRPE”), which prohibits large rental increases (e., increases greater than twice the rate of inflation) on residential tenants in the area of the emergency. This bill would expand that power to certain commercial tenants as well.
  5. It allows for restrictions on residential increases based upon the CPI index and fair market value.
  6. The bill would further permit the Governor to prohibit any rental increase on residential properties or commercial properties rented by small businesses (e., those employing fewer than twenty (20) people prior to the emergency), regardless of the rate of inflation.

We understand that this is a time where everyone is living in uncertainty. You can count on our firm for the most recent updates. 

The information in this Client Alert is provided solely for information purposes. It should not be construed as legal advice on any specific matter and is not intended to create an attorney-client relationship. The information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based upon particular circumstances.  Each legal matter is unique, and prior results do not guarantee a similar outcome.

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