The Hoboken Tax Reform Coalition
HOBOKEN RENT CONTROL ORDINANCE FOUND UNCONSTITUTIONAL
FROM: MILE SQUARE TAXPAYERS ASSOCIATION
P.O. Box 344
Hoboken, NJ 07070
CONTACT: Ron Simoncini
(201) 348 8998 or (201) 424 9017 cell
HOBOKEN RENT CONTROL ORDINANCE FOUND UNCONSTITUTIONAL
Judge Rules City Failed to Administer Law Properly
HOBOKEN – (Sept 24, 2009) In a ruling that will permanently alter the landscape of rent control regulation in Hoboken, Hudson County Superior Court Judge Shirley Tolentino yesterday ruled that the Hoboken Rent Leveling Office was arbitrary, capricious and unreasonable in its administration of the rent control ordinance. The ruling rendered the “Legal Rent Calculation” process “unconstitutional.”
Judge Tolentino also determined that the enforcement of the Rent Control Ordinance by the “City Defendants,” which include the City of Hoboken, the City of Hoboken Municipal Council, Mayor of the City of Hoboken and the City of Hoboken Department of Human Services Rent Leveling Board, is in violation of the City’s police power because they “failed to administer the Ordinance with administrative regularity.”
The case pertains to a single building, but establishes precedent as the circumstances surrounding it are similar if not identical to those that have plagued real estate owners with the prospect of being liable for refunding rent increases despite having conformed to local regulations. The decision was preceded last month by another Superior Court opinion that stayed a judgment against another property owner pending the outcome of a similar claim against the City.
“For two years we have complained to the Council that the law was unconstitutional, but it responded to the politics instead of the equities of the situation and let injustice after injustice occur,” says Charles X. Gormally, attorney for Mile Square Taxpayers Association as well as the individual property owner in the suit. “In that time landlords have been forced to “roll back” rents, in some cases to 1981 levels, and in many cases paid triple damages in returning what we now know were legally- charged rents.
“This decision exposes the city as culpable for Rent Leveling Office errors that cost property owners as much as $10 million and perhaps more. Some owners were forced into bankruptcy as a result of the Legal Rent Calculation process despite that they did not even increase rents to allowed levels.”
The issue’s root is in the shifting policies of the Rent Leveling Officers who for nearly twenty-five years did not require “vacancy decontrol forms” be filed and at other times refused to accept them. In 2006 the Board changed its long standing policy and determined that if a property owner at any time was out of compliance with today’s procedures, ie, not having filed the form, all of their rental increases would be disallowed, despite that the owner had been in compliance with the procedures at the time.
An economist testified at the trial that in reviewing more than 1800 rent control files that the Rent Leveling Office acted in an arbitrary and capricious manner; that the records were corrupted by a lack of controls; and that those property owners who failed to follow any provision of the law were in an advantageous position and those who had acted lawfully were vulnerable to misapplication of the law. In effect, no property owner could demonstrate compliance, and therefore when the Rent Leveling Offices so-called “Legal Rent Calculation” was performed, legitimate rent increases were disallowed.
Among the many dire consequences of the law was that current owners who had done everything in their power to comply with the Rent Control Board's policies would be held liable for legal rent increases charged by prior owners because the City decided to apply rules retroactively, despite the fact that current owners had not collected the rent.
“We outlined this issue more than a year ago and several times appeared before the Council to urge that the City not jeopardize the stability of the rent control ordinance by risking a negative judicial outcome,” says Ron Simoncini, executive director of the Mile Square Taxpayers Association.
“The failure of the City to correct the systemic problem that it caused by decades of arbitrary administration of the Rent Control Ordinance has eroded the vitality of its multifamily rental properties and caused many owners to convert properties to condominiums in an effort to avoid the intolerable situation,” says Mr. Gormally. “Like its budget, currently under the control of a state-imposed monitor, the City lost its right to govern this issue to an impartial judge through neglect and denial. We are hopeful the City will expedite its review of the ordinance and enact a workable law that doesn’t deny property owners their constitutional rights."
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P.O. Box 344
Hoboken, NJ 07070
CONTACT: Ron Simoncini
(201) 348 8998 or (201) 424 9017 cell
HOBOKEN RENT CONTROL ORDINANCE FOUND UNCONSTITUTIONAL
Judge Rules City Failed to Administer Law Properly
HOBOKEN – (Sept 24, 2009) In a ruling that will permanently alter the landscape of rent control regulation in Hoboken, Hudson County Superior Court Judge Shirley Tolentino yesterday ruled that the Hoboken Rent Leveling Office was arbitrary, capricious and unreasonable in its administration of the rent control ordinance. The ruling rendered the “Legal Rent Calculation” process “unconstitutional.”
Judge Tolentino also determined that the enforcement of the Rent Control Ordinance by the “City Defendants,” which include the City of Hoboken, the City of Hoboken Municipal Council, Mayor of the City of Hoboken and the City of Hoboken Department of Human Services Rent Leveling Board, is in violation of the City’s police power because they “failed to administer the Ordinance with administrative regularity.”
The case pertains to a single building, but establishes precedent as the circumstances surrounding it are similar if not identical to those that have plagued real estate owners with the prospect of being liable for refunding rent increases despite having conformed to local regulations. The decision was preceded last month by another Superior Court opinion that stayed a judgment against another property owner pending the outcome of a similar claim against the City.
“For two years we have complained to the Council that the law was unconstitutional, but it responded to the politics instead of the equities of the situation and let injustice after injustice occur,” says Charles X. Gormally, attorney for Mile Square Taxpayers Association as well as the individual property owner in the suit. “In that time landlords have been forced to “roll back” rents, in some cases to 1981 levels, and in many cases paid triple damages in returning what we now know were legally- charged rents.
“This decision exposes the city as culpable for Rent Leveling Office errors that cost property owners as much as $10 million and perhaps more. Some owners were forced into bankruptcy as a result of the Legal Rent Calculation process despite that they did not even increase rents to allowed levels.”
The issue’s root is in the shifting policies of the Rent Leveling Officers who for nearly twenty-five years did not require “vacancy decontrol forms” be filed and at other times refused to accept them. In 2006 the Board changed its long standing policy and determined that if a property owner at any time was out of compliance with today’s procedures, ie, not having filed the form, all of their rental increases would be disallowed, despite that the owner had been in compliance with the procedures at the time.
An economist testified at the trial that in reviewing more than 1800 rent control files that the Rent Leveling Office acted in an arbitrary and capricious manner; that the records were corrupted by a lack of controls; and that those property owners who failed to follow any provision of the law were in an advantageous position and those who had acted lawfully were vulnerable to misapplication of the law. In effect, no property owner could demonstrate compliance, and therefore when the Rent Leveling Offices so-called “Legal Rent Calculation” was performed, legitimate rent increases were disallowed.
Among the many dire consequences of the law was that current owners who had done everything in their power to comply with the Rent Control Board's policies would be held liable for legal rent increases charged by prior owners because the City decided to apply rules retroactively, despite the fact that current owners had not collected the rent.
“We outlined this issue more than a year ago and several times appeared before the Council to urge that the City not jeopardize the stability of the rent control ordinance by risking a negative judicial outcome,” says Ron Simoncini, executive director of the Mile Square Taxpayers Association.
“The failure of the City to correct the systemic problem that it caused by decades of arbitrary administration of the Rent Control Ordinance has eroded the vitality of its multifamily rental properties and caused many owners to convert properties to condominiums in an effort to avoid the intolerable situation,” says Mr. Gormally. “Like its budget, currently under the control of a state-imposed monitor, the City lost its right to govern this issue to an impartial judge through neglect and denial. We are hopeful the City will expedite its review of the ordinance and enact a workable law that doesn’t deny property owners their constitutional rights."
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Tags: Hoboken, Ordinance, Rent, control, government, hoboken, rent
Views: 23
Replies to This Discussion
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Permalink Reply by SmartyJones on -
Ron, I read the city's statement and the judge's legal ruling. She goes out of her way to keep the narrow scope of the ruling applicable to the areas of most impact to the plaintiff in the matter. She does not however rule outside the framework and is specific about the application of statute to the case.
There's nothing in the ruling stating the Rent Control Ordinance is unconstitutional and the judge also makes that clear in the ruling. She backs away from even getting into the matter. She does however discuss the wide ranging ability for the Rent Leveling Board to act and in this case how the plaintiff was correct in not being held to the earlier administrative failings.
Now how did you come up with the $10 million in damages? And if the ruling is as broad as you suggest, then which current case will refer to this decision in an upcoming hearing as precedent to overturn the constitutionality of the rent control ordinance itself?
Ron SImoncini said:Our release was 100% accurate.
The "correction" put out by the town presumes that because this one case had a certain set of facts only cases where those exact facts exist will be affected. wrong. once a judge finds that the ordinance was retroactively applied, that the administration was flawed, those same issues will be important in the next case. even Kleinman, the lawyer who sent out the release, has admitted the ordinance needs to be fixed. he also said the town was confident in its position in this case. what they ought to do is FIX THE ORDINANCE.
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Permalink Reply by SmartyJones on
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Jack, was able to get both the City's statement and the judge's ruling on the matter from the town's website. Also posted an update to yesterday's story. Based on a reading of both, we'd say we owe you a beer. Or two.
Jack Dawkins said:thanks Smarty. I think Hoboken will also post the decision on their website if they haven't already. Gormally and Simoncini are always putting forth stupid nonsense like this...it's their M.O. - just keep putting out lies on the presumption that everyone will think they are true. Their whoppers just keep getting more and more false with each passing press release. Maybe next time the news outlets will remember the egg they ended up with on their face and not post anything from the Mile Square Liars Association again without first finding out what the actual facts are.
SmartyJones said:Jack you were right. They did and an updated story also came out too:
http://www.nj.com/hobokennow/index.ssf/2009/09/hoboken_attorney_cal...
This is really interesting on a lot of levels not to mention the "reply" to a press release/story on a Friday night.
Updated our story to reflect it as well. Did I contribute to stirring this pot? No idea, but I know all the insiders are reading. Hope to read the judge's decision next week.
Jack Dawkins said:...was advised that Hoboken will be putting out a statement to correct the inaccuracies of the Developer's press release. Of course, the city is polite enough to label them as inaccuracies. What they really are are downright lies from a group of wealthy developers intent on suing the city again and again and again...until the city relents and repeals rent control. I hope, in the future, news outlets like NJ.com and Hoboken Now refrain from printing any propaganda from this organization without fact checking. This is not the first time that they have released complete falsehoods.
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Permalink Reply by Jack Dawkins on -
...thanks Smarty
SmartyJones said:Jack, was able to get both the City's statement and the judge's ruling on the matter from the town's website. Also posted an update to yesterday's story. Based on a reading of both, we'd say we owe you a beer. Or two.
Jack Dawkins said:thanks Smarty. I think Hoboken will also post the decision on their website if they haven't already. Gormally and Simoncini are always putting forth stupid nonsense like this...it's their M.O. - just keep putting out lies on the presumption that everyone will think they are true. Their whoppers just keep getting more and more false with each passing press release. Maybe next time the news outlets will remember the egg they ended up with on their face and not post anything from the Mile Square Liars Association again without first finding out what the actual facts are.
SmartyJones said:Jack you were right. They did and an updated story also came out too:
http://www.nj.com/hobokennow/index.ssf/2009/09/hoboken_attorney_cal...
This is really interesting on a lot of levels not to mention the "reply" to a press release/story on a Friday night.
Updated our story to reflect it as well. Did I contribute to stirring this pot? No idea, but I know all the insiders are reading. Hope to read the judge's decision next week.
Jack Dawkins said:...was advised that Hoboken will be putting out a statement to correct the inaccuracies of the Developer's press release. Of course, the city is polite enough to label them as inaccuracies. What they really are are downright lies from a group of wealthy developers intent on suing the city again and again and again...until the city relents and repeals rent control. I hope, in the future, news outlets like NJ.com and Hoboken Now refrain from printing any propaganda from this organization without fact checking. This is not the first time that they have released complete falsehoods.
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