The Hoboken Tax Reform Coalition
Hoboken Sued to Stop Rent Calculations
HOBOKEN, NJ – (April 22, 2009) Agreeing that the administration of Hoboken’s rent control ordinance is “manifestly unjust, arbitrary and capricious,” lawyers representing Mile Square Taxpayers Association today hailed a motion filed in Hudson County Superior Court that will prevent the City from performing further “rent calculations.”
The Order to Show Cause to stop rent calculations by the Rent Control Board was filed today with Superior Court Judge Shirley Tolentino, who scheduled a return date of May 4th to require the City to show cause why an injunction against the practice should not be issued. This is the first time a case has challenged the impact of the City’s administration of the rent control ordinance on all property owners.
“Hoboken’s Rent Leveling and Stabilization Board now declares rents that have been in place for years illegal if its property file does not contain so-called vacancy decontrol forms. However, for 25 years the office did not require the forms and it acknowledges that at many times it refused to accept them even when offered,” says Charles Gormally, a partner at Brach Eichler. “Attorneys for tenants have been treating the situation like a windfall, because they know the City's retroactive and unconstitutional procedure for calculating rent ignores whether the property owner is legally entitled to the rent. It’s as though you could be convicted for driving without a license when you’re not even in your car.”
The application to the Court details other flaws in the City’s administration of the ordinance, including a restriction upon a property owner’s ability to obtain calculations unless a unit is vacant, preventing new and existing owners from determining if errors had been made by prior owners and correcting them.
If property owners cannot prove the rent they are charging in Hoboken is ‘legal’ –based upon the filing of a form that the City only recently created and formerly did not provide, require or accept - they could be exposed to harsh penalties. Frequently, the rent control office will look back for 10 years or more, disqualifying each vacancy decontrol that previously was recognized as legal under the ordinance. In many cases landlords have been forced to file costly appeals to the Rent Control Board and with the court in order to protect their buildings and tenants because of the administrative nightmare created by the City.
“This is all being caused by a retroactive application of new procedures by the Rent Control Board, not because of any failure by property owners to comply with the law at the time,” says Mr. Gormally.
“Although the situation is clearly the result of incompetent administration of the Ordinance, neither the City nor the Rent Office has the political courage to correct it,” says Ron Simoncini, executive director of the Mile Square Taxpayer Association. “The Council actually resolved the problem in 2006 by passing an amendment to the ordinance, but a small, vocal group of tenants threatened a referendum and the Council rescinded its position and allowed a manifest injustice to continue.”
“This is another example of why Hoboken is in the hands of a state-appointed monitor –the fiscal health of the City is willfully compromised by elected officials for some misperceived political gain,” says Mr. Gormally, who commissioned a noted economist to study the administration of the Ordinance and whose findings support the case for an injunction. “As though a 47% tax increase were not enough, the City effectively uses these rent calculations to exploit responsible property owners and curry favor with tenants. The administration of this ordinance is the most hostile and cynical governance imaginable.”
The injunction would stay all pending rent calculations before the City of Hoboken
Rent Leveling and Stabilization Board until the Court's resolution of the constitutional
challenge to the City of Hoboken’s rent control ordinance.
Members of the Mile Square Taxpayers Association, which advocates for rights of property owners in Hoboken, are among those who provided Certifications of the City’s arbitrary and capricious practices.
The Order to Show Cause to stop rent calculations by the Rent Control Board was filed today with Superior Court Judge Shirley Tolentino, who scheduled a return date of May 4th to require the City to show cause why an injunction against the practice should not be issued. This is the first time a case has challenged the impact of the City’s administration of the rent control ordinance on all property owners.
“Hoboken’s Rent Leveling and Stabilization Board now declares rents that have been in place for years illegal if its property file does not contain so-called vacancy decontrol forms. However, for 25 years the office did not require the forms and it acknowledges that at many times it refused to accept them even when offered,” says Charles Gormally, a partner at Brach Eichler. “Attorneys for tenants have been treating the situation like a windfall, because they know the City's retroactive and unconstitutional procedure for calculating rent ignores whether the property owner is legally entitled to the rent. It’s as though you could be convicted for driving without a license when you’re not even in your car.”
The application to the Court details other flaws in the City’s administration of the ordinance, including a restriction upon a property owner’s ability to obtain calculations unless a unit is vacant, preventing new and existing owners from determining if errors had been made by prior owners and correcting them.
If property owners cannot prove the rent they are charging in Hoboken is ‘legal’ –based upon the filing of a form that the City only recently created and formerly did not provide, require or accept - they could be exposed to harsh penalties. Frequently, the rent control office will look back for 10 years or more, disqualifying each vacancy decontrol that previously was recognized as legal under the ordinance. In many cases landlords have been forced to file costly appeals to the Rent Control Board and with the court in order to protect their buildings and tenants because of the administrative nightmare created by the City.
“This is all being caused by a retroactive application of new procedures by the Rent Control Board, not because of any failure by property owners to comply with the law at the time,” says Mr. Gormally.
“Although the situation is clearly the result of incompetent administration of the Ordinance, neither the City nor the Rent Office has the political courage to correct it,” says Ron Simoncini, executive director of the Mile Square Taxpayer Association. “The Council actually resolved the problem in 2006 by passing an amendment to the ordinance, but a small, vocal group of tenants threatened a referendum and the Council rescinded its position and allowed a manifest injustice to continue.”
“This is another example of why Hoboken is in the hands of a state-appointed monitor –the fiscal health of the City is willfully compromised by elected officials for some misperceived political gain,” says Mr. Gormally, who commissioned a noted economist to study the administration of the Ordinance and whose findings support the case for an injunction. “As though a 47% tax increase were not enough, the City effectively uses these rent calculations to exploit responsible property owners and curry favor with tenants. The administration of this ordinance is the most hostile and cynical governance imaginable.”
The injunction would stay all pending rent calculations before the City of Hoboken
Rent Leveling and Stabilization Board until the Court's resolution of the constitutional
challenge to the City of Hoboken’s rent control ordinance.
Members of the Mile Square Taxpayers Association, which advocates for rights of property owners in Hoboken, are among those who provided Certifications of the City’s arbitrary and capricious practices.
Tags: Calculations, Rent, Stop
Views: 1
Replies to This Discussion
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Permalink Reply by e shine on -
has anyone heard any news on this story? Did something change on May 4th? I can't seem to find any followup news.
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Permalink Reply by CEP5985 on
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e shine said:has anyone heard any news on this story? Did something change on May 4th? I can't seem to find any followup news.
HOBOKEN RENT CONTROL OFFICIALS MUST TESTIFY;
CARDILLO BANNED FROM INTERVENING IN CASE
JERSEY CITY, N.J. – MAY 5, 2009 – After directing the City of Hoboken to produce witnesses to defend the City’s administration of its rent control ordinance, Superior Court Judge Shirley Tolentino agreed to a short adjournment to enable the City’s attorney to prepare their testimony.
Attorneys for the apartment owner made a motion to restrain the Rent Control Office from performing so called “rent calculations” that now will be decided for May 11, 2009.
The motion was made after economists issued a report calling Hoboken’s administration of the rent control law “arbitrary and capricious” in a case that challenges the constitutionality of Hoboken's rent control ordinance. Judge Tolentino is now requiring that the City defend its practice of rent calculations as currently performed by the Rent Control Office.
Hoboken’s attorneys have consistently delayed the case - at one point complaining of unpaid fees by the city - and most recently attempted to prevent officials, including the former and current Rent Control Administrators, from testifying. In depositions, City officials have affirmed the central contention of the case, which is that landlords previously were not required to and even prevented from submitting vacancy decontrol forms, and now are retroactively being penalized for the forms not being filed.
Charles X. Gormally, attorney for the property owner stated, "Depositions under oath have revealed the bizarre and unfair practice of the Rent Control Office, which now requires landlords to have documents in City property files that were never required or even available for more than twenty years. We are confident that the Judge will stop this unfair and constitutionally impermissible practice which is costing the taxpayers of Hoboken hundreds of thousands of dollars in lost revenue each year."
At the hearing conducted yesterday Judge Tolentino also rejected Jersey City attorney Cathy Cardillo’s request to intervene in the case on behalf of a tenant group. The Judge denied the request as being untimely since the case against Hoboken has been pending for two years.
“There are many cases in Hoboken where the rent board is responsible for a miscarriage of justice,” says Mr. Gormally. “I am handling another case where a property owner bought a rental building in 2006,” says Mr. Gorrmally. “A rent calculation requested by a tenant resulted in the rent board ruling that she roll back the rents to 1983 because previous owners allegedly had not filed forms – and all the while the rent board knew that they did not accept forms during that period.”
“This is such a simple problem to fix, but the Council is terrified of doing anything that will be perceived as supporting property owners over tenants,” says Ron Simoncini, Executive Director of Mile Square Taxpayers Association, which advocates on behalf of property owners in Hoboken. “So instead of correcting the problem, they not only deprive property owners of their assets, they imperil the property tax base of the town and run up legal fees they can’t pay to defend suits they shouldn’t be in.
“That sort of cowardice is very expensive and it is just one example of why there is a State Monitor running the City.”
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Permalink Reply by georgia on
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Unbelievable of what goes on in this town! But the State Monitor needs to go away soon! Now she approves projects that Hoboken citizens spoke against and the city council already voted No.
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Permalink Reply by db on
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If the council approved the expenses for the contract, or the contract wasn;t swriiten so more work couldn't be done without approval the monitor is correct. You can't just decide to not pay someone for work they do if there is a contract in place. Without the contract you can't know. In truth it is more of an example of how poorly the city is run. You put max amounts in contracts and required approval for more. Poor contract negotiation skills, but we see that on all contracts.
Just another day at the office of city hall. paperwork required, never taken, nobody has ever made the people there actually do their job, and they will be voting to ensure no cutbacks. You know we as taxpayers keep having to pay for the crazy suits brought against city hall that never should happen. I do not want to pay to defend the rent control office or the mayor let a few of these people go to jail and we will see better government.
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