Landlords file lawsuit to end freeze on rent increases
By JAIMIE JULIA WINTERS
The landlord group that has called for the issue of rent control to be put before Montclair voters has asked a judge to stop further rent freeze extensions and reverse previous freezes.
Class attorney Charles Gormally filed the papers in Essex County Superior Court today, March 1.
The most recent extension of the rent freeze will expire on March 31. Tonight’s council agenda provides for another extension that will expire on May 31 and will be discussed.
The township implemented a rent freeze in May 2020 as the pandemic took hold and a group of landlords successfully sued the township to impose a restraining order on a township rent control ordinance passed in April 2020.
The ordinance sets limits on annual rent increases at 4.25% and 2.5% for seniors, on multifamily properties of four or more units, except where rent control is prohibited by law. federal or state law. It would also limit post-vacancy rent increases to 10%, which has been a sticking point for some landlords.
The rent freeze is a separate measure from the contested rent control ordinance. It has been authorized under the ongoing pandemic state of emergency, but depends on renewal by the city council every three months.
Recent negotiations between a group of tenant advocates and landlords seeking to avoid a referendum on the rent control ordinance broke down in mid-February. In response to the deadlock, Mayor Sean Spiller said he expected the issue to go to a referendum.
In the meantime, tenant advocates have called on the council to extend the rent freeze again, fearing that without rent controls in place, tenants could face “unreasonable rent increases” once the freeze is lifted.
In a letter to acting township attorney Paul Burr and provided to the Montclair Local, Gormally said the owners were disappointed with the lack of progress in negotiations, which could have resulted in a mutually accepted and the withdrawal by the owners of their request for a referendum.
“However, the decision by the governing body to continue to freeze rents in retaliation for our customers’ successful protest against the rent control ordinance while the referendum process continues cannot be tolerated and is addressed in this application to the court,” Gormally wrote.
In its latest filing, the landlords are asking the court for an order restraining the township from implementing, extending and enforcing rent freezes in the future and allowing landlords to collect duly recorded rent increases effective immediately. today, March 1.
They are also asking that rent freezes dating back to May 19, 2020 be declared unconstitutional and invalid.
“The rent freeze should be declared void as soon as it comes into force. There is no statutory or other authority for the township to enact a rent freeze,” Gormally told Montclair Local.
If the rent freeze is declared totally invalid, it remains to be seen whether landlords could then retroactively collect tenants who were notified of the increases with lease renewals while the freeze was in place.
“If an increase was correctly noted but not collected, theoretically a landlord could go back and recover it from a tenant. However, if the tenant chooses not to pay, the landlord has very limited recourse. It’s more about exposing the council’s reprisals against the committee [of petitioners] rather than an owner collecting money. Many, many landlords didn’t think about raising rents during COVID for practical reasons at the height of the pandemic,” Gormally said.
But members of the Montclair Tenants’ Organization repeatedly called council meetings to relay stories of landlords trying to raise rents during the freeze. And tenants’ attorney Mitch Kahn, who sat at the negotiating table, said that in April, when the rent freeze expires and with no rent controls in place, many tenants will face price increases. “inadmissible” rent.
The lawsuit also seeks the collection of legal fees based on civil rights violations.
Spiller and Burr did not return emails sent March 1 seeking comment on the lawsuit or whether the township will still seek to extend the rent freeze.
While rent control negotiations have made progress – with groups somewhat agreeing on an overall rent increase limit of 4% and scrapping the overall rent increase limit of 10% on flats vacated by tenants and instead allowing post-holiday increases without limits, but no more often than once every five years – landlords still had sticking points.
The tenants’ group tried to set a 2.5% rent increase limit for seniors, make the order retroactive to April 2020, and require landlords to release private information about tenants in the part of the landlord registration process with the city, which the landlords claimed was unconstitutional.
The law was originally due to come into force 20 days after it was approved by council, but was halted when the owners launched an electronic petition to force the issue to a referendum. After the township clerk rejected their petition due to signatures she claimed did not match those handwritten in the voters lists, the petitioners sued the township.
Essex County Superior Court Judge Jeffrey Beacham ultimately ruled that the clerk had acted “arbitrarily and capriciously” and ordered the clerk to certify the motion. The township appealed Beacham’s decision and lost.
The case was returned to the Beacham courtroom for an evidentiary hearing on December 20, but the township did not appear.