Landlords file in court to stop Montclair rent increase freeze
By JAIMIE JULIA WINTERS
The group of landlords that has petitioned to have the issue of rent control put before Montclair’s voters has asked a judge to stop further rent freeze extensions and to nullify past freezes.
Charles Gormally, attorney for the group, filed the papers in Essex County Superior Court today, March 1.
The most recent rent freeze extension will expire on March 31. The Township Council is expected to place a resolution extending it again to May 31 on its March 15 agenda.
The township put a rent freeze into effect in May 2020 as the pandemic set in and a group of landlords successfully sued the township to put a restraining order on a township rent control ordinance passed in April of 2020.
The ordinance set limits on annual rent increases at 4.25%, and at 2.5% for seniors, on multifamily properties with four or more units, except in cases where rent control is prohibited by federal or state law. It would also limit rent increases after vacancies to 10%, which has been a sticking point for some landlords.
The rent freeze is a separate measure from the disputed rent control ordinance. It was authorized under the ongoing pandemic state of emergency, but is dependent on renewal by the Township Council every three months.
Recent negotiations between a group of tenant advocates and landlords seeking to avert a referendum on the rent control ordinance broke down in mid-February. In response to the impasse, Mayor Sean Spiller has said that he expected the issue to go to referendum.
In the meantime, tenants advocates have asked the council to again extend the rent freeze, worried that without rent control in place tenants would face “unconscionable rent increases” once the freeze was lifted.
In a letter to interim Township Attorney Paul Burr and provided to Montclair Local, Gormally said that the landlords were disappointed with the lack of progress on the negotiations, which could have resulted in a mutually accepted ordinance and in the landlords’ withdrawing their petition for a referendum.
“However, the governing body’s decision to continue to inflict the rent freeze as retaliation for our clients’ successful protest against the rent control ordinance while the referendum process moves ahead cannot be tolerated and is addressed in this application to the court,” Gormally wrote.
In its most recent filing, the landlords are asking the court for an order restraining the township from any implementation, extension and enforcement of rent freezes in the future and allowing the landlords to collect on properly noticed rent increases as of Tuesday, March 1.
They are also asking that rent freezes dating back
to May 19, 2020, be declared unconstitutional and invalid.
“The rent freeze should be declared void from its inception. There is no statutory or other authority for the township to enact a rent freeze,” Gormally told Montclair Local.
If the rent freeze is declared invalid altogether, it remains to be seen if the landlords could then collect retroactively from tenants who were notified of increases with lease renewals while the freeze was in place.
“If an increase was properly noticed but not collected, theoretically a landlord could go back and collect it from a tenant. However, if the tenant elects not to pay, the landlord has a very limited remedy. This is more about exposing the retaliation of the council against the committee [of petitioners] rather than a landlord collecting money. Many, many landlords did not think about raising the rents during COVID for practical reasons during the height of the pandemic,” Gormally said.
But Tenants Organization of Montclair members have repeatedly called into council meetings relaying stories of landlords attempting to raise rents during the freeze. And tenant advocate Mitch Kahn, who sat at the negotiations table, reminded the council that come April, when the rent freeze expires and without rent control in place, many tenants will be facing “unconscionable” rent increases.
The suit also seeks collection of legal fees based on civil rights violations.
Spiller and Burr did not return emails sent March 1 requesting comment on the suit.
While negotiations over rent control did make some headway — with the groups somewhat agreeing on a 4% overall rent increase limit and nixing the overall 10% rent increase limit on apartments vacated by tenants and instead allowing increases after vacancies with no limits, but no more often than once every five years — the landlords still had some sticking points.
The tenants group attempted to set a 2.5% rent increase limit for seniors, make the ordinance retroactive to April 2020 and require landlords to release private information on tenants as part of the landlords’ registration process with the town, all of which the landlords said was unconstitutional.
Housing Commission chairman and landlord William Scott called into the March 1 council meeting suggesting that the council take the draft that the groups came up with and pass it. If rent control is voted down through referendum, the township would have to wait another three years to create another ordinance.
Landlord Tenant Advisory Committee Chair Deirdre Malloy also suggested that tenant advocates and landlords come back to the table instead of “ending in a stalemate.”
Councilwoman Robin Schlager questioned if the council was going to continue to extend the rent freeze every three months until the issue of rent control is settled.
Burr said that the clerk is in the process of trying to cure a few more petition signatures of the 18 needed to certify the petition for a referendum. The clerk said that the referendum would then be set for May 10.
The law was originally expected to take effect 20 days after the council approved it, but was paused when landlords conducted an electronic petition to force the matter to a referendum. After the township clerk rejected their petition over signatures she found didn’t match handwritten ones in voter rolls, the petitioners sued the township. Essex County Superior Court Judge Jeffrey Beacham eventually ruled that the clerk had acted “arbitrarily and capriciously” and ordered the clerk to certify the petition. The township appealed Beacham’s decision and lost.
The case was sent back to Beacham’s courtroom for an evidentiary hearing on Dec. 20, but the township failed to appear.