By JAIMIE JULIA WINTERS
A landlord group fighting Montclair’s rent control ordinance has filed another suit against the township and the township clerk, this time claiming a civil rights act violation.
The Montclair Property Owners Association’s attorney, Charles Gormally, filed the papers Thursday, March 18, in Essex County Superior Court, where the association has been battling last April’s passage of an ordinance that limits annual rent increases to 4.25%, and to 2.5% for seniors. It also sets a vacancy increase limit to no more than 10%.
Judge Jeffery B. Beacham reissued a ruling on March 16 ordering the clerk to certify a petition by the landlords to take the issue to referendum or have the council repeal it. That vacated his own previous ruling from Jan. 29, when he had instead backed the clerk in rejecting the landlord group’s petition, after hearing further arguments on March 2.
After rejecting it twice before, Clerk Angelese Bermudez Nieves certified the petition at the regular council meeting on Tuesday, March 16. From that date, the council has 20 day to either repeal of the ordinance, or send it to a referendum within 40 to 60 days.
By Friday, Montclair was expected to file asking for a judge’s permission to appeal his decision, Township Attorney Ira Karasick said earlier in the week. He did not return an email asking if he had indeed filed.
The ordinance was originally to take effect 20 days after its approval on April 27, 2020. State statute sets a 20-day buffer so residents can gather signatures to petition for a referendum, as the landlords group did.
The Montclair Property Owners Association has argued that Montclair violated its rights to be included in the creation of the ordinance, which it says was passed “on the eve of the pandemic,” and to petition for a referendum.
The group’s members filed a motion last April to stay the ordinance while they conducted their petition, which proved difficult during the pandemic and subsequent lockdown. Judge Beacham granted the stay, while the group pushed forward with the first electronic signature-gathering petition in the state.
Last September, the group submitted 1,530 signatures to the township electronically — more than 500 above the threshold to get the measure on the ballot — but clerk Bermudez Nieves rejected several hundred signatures. When the landlords submitted a second, “cured” petition, Nieves rejected 27 signatures because she found they didn’t match the signatures in voting records. Ultimately, she found, the cured petition came up 18 signatures short.
At a March 2 hearing, plaintiff attorney argued that the voters whose signatures were rejected — all of whom were registered voters with valid Montclair addresses — were not offered a mechanism to cure their signatures. New Jersey allowed for the first time last May, the curing of signatures due to mail-in only elections.
Presenting new evidence on March 2, Gormally submitted a certification of evidence that he had been able to contact 20 of the 27 residents whose signatures were rejected from the cured petition, and they confirmed they had signed twice — once in the first round, and again in the attempt to cure the first petition. He said that demonstrated the signers wanted rent control on the ballot, and that the clerk could have easily allowed the signers to cure their signatures.
In the end, Beacham reversed his January decision saying election laws are “liberally constructed” to have the will of the people heard and allow for the greatest scope of participation.
Bechamn’s order also states: “Having found that the defendants’ actions in rejecting the petition and the amended petition were arbitrary or capricious,” the court retains jurisdiction to hear such a complaint.
The suit filed on Thursday asks for a summary judgement, meaning that since the court has already ruled that the clerk’s actions were “arbitrary or capricious,” the suit is based on undisputed facts, Gormally said. The suit also looks for the landlords to be named as the “prevailing party” so that the group can seek damages in the form of their legal costs.
“The clerk’s rejection of 195 e-signatures for not matching hand-written signatures in New Jersey Voter Registration System deprived Plaintiffs of its substantive right of referendum, and this Court has agreed by entering an oral decision and order finding the Clerk’s actions in this regard to be arbitrary and capricious municipal action,” the suit reads.
Gormally said the judge would decide on the amount to be paid in damages based on time records and hourly rates submitted by the plaintiffs, and has flexibility in his decision. Gormally said it could be anywhere from $100,000 to $200,000.
Karasick, who has represented Montclair in the matter, said there has been no cost to the town for his representation.
Gormally said the landlords also withdrew legal challenges against the ordinance without prejudice, “meaning we can relitigate if the ordinance is ever enacted.”
Gormally expects that council will hold a public hearing on the repeal of the ordinance over the next 20 days. If it is repealed, he hopes that the landlords, tenant rights groups and the council can work on a new ordinance.
The Montclair Property Owners Association maintains it is not against rent control, but seeks changes to three parts of the ordinance that the group opposes: a 10% limit on a vacancy increase, a requirement that a unit be free of any housing-code violations before an increase can be made, and a $250 fee for vacancy rent increases.
If the council does not repeal the ordinance and it goes to referendum, voters could vote it down, Gormally said. In that case, the town would not be able to implement rent control for three years, by law.
Others on the council have also voiced concerns that Montclair’s rent ordinance doesn’t go far enough in protecting many renters, as the ordinance only applies to non-owner occupied rentals with four or more units.
At a March 16 council meeting, Fourth Ward Councilman David Cummings said: “I want to make sure that renters particularly residents in in the Fourth Ward know that residents who live in non-owner occupied two-and-three family units should understand that the current ordinance does not apply to their landlords.”
He pointed to a recent analysis conducted by the township of the 1,473 two-to-four family rentals units in town. It shows the Fourth Ward houses 44% of the two-family units, and 41% of the three-family units.
The ordinance would, however, apply to four-family units — 1% of which are in the First Ward, 23% of which are in the Second Ward, 32% of which are in the Third Ward and 44% of which are in the Fourth Ward.
At-large Councilman Peter Yacobellis at his town hall meeting held on March 17 concurred that the current law does not protect the majority of renters in Montclair and sought one that could extend to two and three families.
He said there’s a need to help renters from being priced out of Montclair: “My parents, my sister, they can’t afford to live in Montclair. Period, full stop.”
Ward 1 accounts for 7% of Montclair’s two-family units, and 3% of its three-family units. Ward 2 has 24% of the two-family units and 29% of the three-family units. Ward three has 24% of the two-family units and 27% of the three-family units.
According to state law, rent control can not be placed on a multi-families for 30 years following completion of construction.
As for vacancies, Yacobellis suggested renegotiating that piece all together.
“Could we avoid a costly and divisive ballot referendum with negotiation? For example, could we permit vacancy decontrol if we gained the ability to add two and three family units, made the rate variable vs. fixed and added multi year lease discounts and succession rights?” he said.
The suit is expected to be heard on April 16.
On March 16, the council also extended its rent freeze ordinance for the third time. The mechanism places a temporary moratorium on rent increases during the COVID-19 pandemic state of emergency. The moratorium prevents any increase in the amount paid in rent or any additional charges by residential tenants in all residential rental units in the township.
Past rent stabilization referendums in 1979 and 1986 both failed in Montclair. But according to Housing Commission Co-Chair William Scott, a survey conducted in 2017 revealed that 75% of residents backed some sort of rent stabilization.