What's The Latest With 'Unconscionable' Rent Increases In Hoboken?

HOBOKEN, NJ — It doesn't matter if your building is new or old, under local rent control or not — by state law, landlords of apartment buildings in New Jersey must keep rent increases to an amount that's not considered "unconscionable or unreasonable."

Theoretically, the state law helps renters know what to expect and budget for increases each year. While the state has left it up to courts to decide, local advocates have said the limit has hovered around 20-25 percent at most.

Also, landlords can't refuse to renew tenants' leases just because the owner is selling the building, because the tenant had a change in financial circumstances, or a host of other reasons. The main reason for eviction is nonpayment of rent. (See the specific reasons a landlord can decline to renew a tenant's lease in New Jersey here.)

But when these state laws are ignored, what's the recourse?

When landlords raise rents 25 percent or more, add "amenities fees," or tell their tenants they have to leave because they're planning to knock the building down, tenants face a hard choice: seek legal help to battle with their landlord, or uproot themselves and face new rent applications and moving costs.

What's Hoboken Doing About Increases?

Recently, some landlords in Hoboken have raised rents more than 25 percent. In other cases, they've run afoul of the city's more limiting Rent Control Ordinance, which applies to many apartments older than 30 years, as well as to newer apartments that can't prove they received a state exemption.

READ MORE: Rivington Rent Hikes Reduced; Hoboken Says They're An 'Injustice'

In the last year, Hoboken officials have communicated with at least four management companies and owners of luxury buildings in town, telling them their rent increases appeared "unconscionable."

Most recently, 5th Ward Councilman Phil Cohen wrote in his May newsletter, "Mayor Bhalla and I have been communicating with ... the management company of The Ballpark (1017 Jefferson St./1020 Adams St.), regarding illegal rent hikes, and significant maintenance issues including a long-inoperable elevator ... [The managers] committed to renegotiating lease renewals with substantially reduced rent hikes, advised that the building’s inoperable elevator was now back in service, and committed to address a host of specific property maintenance issues."

But what of non-luxury buildings and smaller buildings, whose tenants may have more trouble banding together?

Local advocates say the city needs to go further in making all tenants aware of the laws and how to get help.

"There are some that ignore [rent control] on some units and follow it on others ... they follow it more or less for existing tenants but ignore it for new tenants, or just AirBnB/short-term rent units when tenants leave, and charge outrageous rents," said one local tenant advocate this week.

Nondisclosure Agreements

With apartment prices in Hoboken and Jersey City becoming among the highest in the nation — Jersey City topped a new national list this week, just behind New York City — longtime Hoboken residents have said that they faced the choice of either leaving and pulling their kids out of the schools, or staying and trying to fight a corporation.

READ MORE: Rents In Jersey City, Hoboken Highest In Country. But Are They Legal?

In one Hoboken luxury building, according to residents, a family that was vocal about a high increase this year was able to negotiate with the management company, who then asked them to sign a Nondisclosure Agreement — meaning their neighbors lost a vocal advocate who was spreading awareness. (Luxury landlords in other parts of the country have also asked tenants to sign such agreements after negotiating individually on increases.)

When landlords overcharge, they may eventually have to pay the money back, sometimes in triple, according to the law — but there appears to be no immediate penalty, and some tenants may not realize the rent hikes ran afoul of state law until after they've left.

Now, tenants are asking exactly what "unconscionable" means in terms of increases.

Local advocates have said that judges have backed tenants when an increase was 20 to 25 percent or higher — but what about a 15 percent increase two years in a row? The laws remain nebulous.

What Is An 'Unconscionable' Increase, And Will Hoboken Find Out?

Several towns near Hoboken have dealt with unexpected rent increases by passing citywide legislation limiting them, or addressing various other issues that are related.

In Newark recently, the City Council passed a law expanding local rent control to almost all buildings, and another law saying that LLC's that buy buildings in town must state who the owners are, rather than hide behind the LLC name. (It's unclear whether the rent control expansion will stand up in court.)

READ MORE: Newark Law Will Shine Light On Anonymous Corporate Home Buyers

Jersey City recently passed a "right to counsel" rule giving tenants free lawyers for eviction court.

After a dark history during gentrification, Hoboken has, for decades, retained a lawyer whose job it is to help tenants navigate choppy legal waters, free of charge, and a rent control office that can provide a calculation of what one's legal rent should be.

In Hoboken, officials and tenant advocate Andrew Sobel told residents earlier this year that the city would file a "test case" in county Superior Court to determine just how high of an increase was "unconscionable," said sources at a tenant meeting.

Patch reached out to the city Thursday morning for an update, and will include one when it's available.

A group of state tenant advocates said earlier this year that the state should make it clearer what constitutes an "unconscionable" increase.

“Families are suddenly being told to find hundreds of dollars more in their budget to keep a roof over their head,” said advocate Staci Berger.

Property Owner Speaks Up

Ron Simoncini, the leader of a local taxpayers' association who often gives the property owner's take in rent control debates, said that in some cases, landlords may have significantly lowered the rent during the pandemic. But he said that it's important for lawmakers and property owners to think through any changes.

"When apartments are exempt from rent control, the property owner may believe that an increase of any amount is lawful," he said. "While there are very few legal precedents for what 'unconscionable' means, there is important context here to consider. For example, during COVID, in an attempt to attract tenants to New Jersey cities, rents were cut dramatically from pre-COVID market standards."

He added, "As we saw in Montclair and other places, elected officials will act quickly to protect their residents and rent control seems an appropriate solution when, in fact, most owners are quite reasonable with rent increases on existing tenants because it is very costly to deal with turnover, and rent escalations create turnover. So this issue is deeper than it seems on the surface, and the best advice we can give to landlords and municipalities is, don’t do anything rash."

Ironically, in some cases over the past year, tenants only checked into local rent control laws because of rent increases of more than 20 percent — and said they wouldn't have checked if not for the size of the spike. As a result, landlords were forced to limit rents to around 5 percent instead of higher amounts the tenants likely would have paid.

Meeting Planned Friday

Sources said the city planned to hold a virtual meeting Friday with tenants of one luxury building, Avalon Hoboken, to discuss ongoing rent issues in that building.

Avalon was one of the luxury companies to whom Mayor Ravi Bhalla sent a letter this year, as the city has also determined that the building, while newer, falls under local rent control laws.

Presently, increases in rent controlled buildings must be kept to 5 percent per year or less, with landlords allowed to pass along certain surcharges, including for sewer fees and taxes. (However, "amenities fees" and other types of fees may not be legal in those buildings.)

City Council members also have been working on potential changes to the existing Rent Control Ordinance for more than a year, and recently agreed to take their latest proposal off the table for more work.

How To Get Help

• To talk to the city's free tenant lawyer, click here. To talk to the director of constituent services, click here.
• To find out what your legal rent should be, fill out this form. The fee is $30 and your landlord will find out that you have asked.
• Find out more about that Hoboken landlord and tenant laws here.
  
• Read about state laws about increases, eviction, and Truth in Renting here, here, and here.

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