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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.