Rent Control amendments pass

Two-year statute of limitations implemented for collecting overcharged rent
By Tom Jennemann
Hoboken Reporter

The Hoboken City Council has passed an amendment to the city's Rent Control Ordinance that will limit how far back a tenant can go to recoup rent overpayments.

As the law was written, tenants could recover all of the money they overpaid in rent, no matter how long they have lived at an address. This has led to some landlords having to pay as much as $100,000 to long-term tenants.

The amendment would limit the amount of money a tenant could recover to only two years worth of overcharges. The amendment would also require landlords to give all current tenants a disclosure statement outlining the city's rent control law, and to inform their tenants that they are legally allowed to contest their rent with the city's Rent Control Board.

Wednesday night, the City Council chamber was polarized between tenants' advocates, who believe the new rules will encourage unscrupulous landlords to overcharge for rents, and landlords and property owners, who believe the previous law left them unfairly and indefinitely vulnerable.

The amendment passed with six council members voting in the affirmative, with council members Michael Cricco and Theresa Castellano abstaining, and Council President Christopher Campos voting no. Campos said that he would like to extend the time period to three or five years, and would like to exempt the disabled, seniors and low-income families.

Plenty of controversy

Those who spoke against the changes to rent control said the new amendment will erode protection of tenants' rights.

Several said that it is unfair that the amendments will be retroactive. This means that they lose the right to go back further than two years, even if they were tenants for a decade or more under the old rules, when there wasn't a statute of limitations.

There is also concern from many tenants' advocates that the statute of limitations will encourage landlords to purposely overcharge their tenants. For landlords, it might become a risk/reward situation where they might be willing to risking having to repay the tenants' rent without interest or penalty because they know if they get past the two-year mark they get to keep the overpayment of rent.

Another argument against the statute of limitations was that many tenants don't immediately realize they are being overcharged. Often they have another problem such as broken pipes or a faulty heater and are looking for some means of compensation for their inconvenience. So they go to the rent control office for a rent calculation, sometimes a decade or more after they first signed the lease. These people, say tenants' activists, will be out of luck now. The advocates argued that a two-year window isn't nearly long enough.

Finally, several advocates argued that the city shouldn't be bending over backwards for landlords, who are often more sophisticated and knowledgeable about rent control law. It should be the tenant that has the higher standard of protection, they argue.

Councilman Peter Cammarano countered those arguments. He opined that if a landlord is maliciously committing fraud then the tenant still has the ability to sue under state consumer fraud provisions. Under that law, tenants would have up to six years to file, and could recoup not only their rent overpayment but also three times that amount in penalties.

Cammarano countered that the amendments do provide protection for tenants. The landlord has to prove that they gave their tenants the disclosure statement, which outlines the tenants' rights. It will tell tenants, said Cammarano, how and where tenants can go for a rent calculation, and what their rights are if they are being overcharged.

If the landlord can't prove they delivered the disclosure form, then the clock doesn't start and the landlord isn't protected by the statute of limitations.

Mayor David Roberts, who support the changes, added that a reason for his support is that he believes that there have been lawyers that actively search for past tenants that have been overcharged, even if they don't even live in Hoboken any more. He added that this may leave landlords unfairly vulnerable.

Conflicts of interest?

Another issue Wednesday night was over a possible conflict of interest on the City Council. On the council there are seven landlords and one tenant, so many of the tenant activists argued that the council members have a personal interest in the outcome and therefore should not vote on the amendments.

According to city's attorney Joseph Sherman, there is a "document of necessity" provision that allows the council to vote on a matter if there is a public necessity even if there might be a possible conflict. He added that when the City Council originally passed the city's rent control law in the 1980s, eight members of that council were landlords.

Cathy Cardillo, a longtime tenant advocate and Hoboken attorney, said that she is forming an advocacy group to file a lawsuit to overturn the council's vote. She added that the council has failed to prove that these amendments are in fact a necessity.

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