Overlook Terrace Management Corp. v. Rent Control Board
Supreme Court of New Jersey
April 5, 1976, Argued ; November 10, 1976, Decided
No Number in Original
[*453] [**322] This appeal projects the issue of whether a municipal rent control ordinance may restrict rental increases approved and ordered by the New Jersey Housing Finance Agency, a state agency "exercising public and [***2] essential governmental functions", N.J.S.A. 55:14J-4(a), for dwelling units in a housing project which is financed, supervised and regulated by that Agency.
The plaintiff Overlook Terrace Management Corp., as the managing agent for Overlook Terrace Corp. (Overlook), a limited dividend housing corporation organized under N.J.S.A. 55:16-1 et seq. and owner of a 600 unit apartment complex in the Town of West New York, challenged in a complaint in lieu of prerogative writ a rent control ordinance adopted by the Town. The Town and the Rent Control Board, which had been vested with administration of the ordinance, were made parties defendant. The Overlook Tenants Association, an organization composed of resident tenants in the apartment complex, and four individual [*454] tenants, intervened in the proceedings as defendants and the New Jersey Housing Finance Agency (Agency) intervened as a plaintiff.
The defendants' motions for summary judgment were granted. The plaintiffs appealed and the Appellate Division affirmed. We granted the plaintiff's and plaintiff-intervenor's petitions for certification. 69 N.J. 76 (1975). We reverse.
In 1968 the Agency, acting [***3] pursuant to the New Jersey Housing Finance Agency Law of 1967, loaned $ 12,674,156 to Overlook to construct a 600 unit moderate-income housing project in West New York. The loan was evidenced by a note and secured by a mortgage. At the mortgage closing, the parties entered into a regulatory agreement. The agreement required Overlook to insert in its leases a covenant that the tenant's family income and other eligibility requirements were to be "substantial and material obligations" of the tenancy. Overlook was required to limit admissions to the project "solely to families of moderate income, as defined by the New Jersey Housing Finance Agency Law of 1967, as amended". Priority for admission was to be granted in the following order: (1) families displaced from the development site, (2) families displaced by urban renewal or highway projects, (3) families in substandard housing, (4) the elderly, and (5) others who met the financial eligibility requirements. If the family income limitations fixed by the Agency were exceeded, the tenancy would be terminated or a rent surcharge imposed. Charges for dwelling accommodations and services were to be in accordance with a rental schedule [***4] approved by the Agency.
Without Agency approval Overlook could not convey or encumber the property, assign the rents, or pay out any funds except from surplus cash. Surplus cash were those funds remaining after payment of all [**323] expenditures for maintenance to keep the premises in good repair and condition and sums due the Agency on the note and mortgage, and setting aside reserve funds for replacements and other [*455] purposes. Surplus cash could be paid annually to the owners in an amount not to exceed 8% on the equity investment, that being the difference between the principal amount of the mortgage and the total project cost as determined by the Agency. No other compensation or payments were to be made to any officers, directors or stockholders. The premises were to be maintained in good repair and condition. Books and records were to be kept in accordance with the Agency's requirements. A complete annual financial report prepared per the Agency's prescriptions was to be submitted yearly. Read The Full CaseNot a Lexis Advance subscriber? Try it out for free.
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71 N.J. 451 *; 366 A.2d 321 **; 1976 N.J. LEXIS 167 ***
OVERLOOK TERRACE MANAGEMENT CORP., A NEW JERSEY CORPORATION, PLAINTIFF-APPELLANT, v. RENT CONTROL BOARD OF THE TOWN OF WEST NEW YORK, NEW JERSEY AND TOWN OF WEST NEW YORK, NEW JERSEY, A MUNICIPAL CORPORATION OF THE STATE OF NEW JERSEY, DEFENDANTS-RESPONDENTS, AND OVERLOOK TENANTS ASSOCIATION AND JOYCE BARRETT, DAVID HARDY, THELMA SPENCER AND ANGELO ROMANO, INTERVENORS-RESPONDENTS, AND WILLIAM L. JOHNSON, ACTING EXECUTIVE DIRECTOR, NEW JERSEY HOUSING FINANCE AGENCY, INTERVENOR-CROSS-APPELLANT
municipal, Housing, rent, rent control, regulation, Finance, rent increase, projects, ordinance, preemption, tenants, rental, sponsor, housing project, rent control ordinance, rent control board, moderate income, mortgage, state law, maximum, preempt, cases, funds, subject matter, dwelling, local rent control, Finance Agency Law, purposes, legislative intent, family income
Real Property Law, Landlord & Tenant, Rent Regulation, Rent Control Statutes, General Overview, Business & Corporate Law, Duties & Liabilities, Causes of Action & Remedies, Breach of Contract, Tax Law, State & Local Taxes, Income Taxes, Governments, Public Improvements, Community Redevelopment, Administrative Law, Agency Rulemaking, Civil Procedure, Discovery & Disclosure, Discovery, Subpoenas, State & Territorial Governments, Relations With Governments, Federal Preemption, Local Governments, Administrative Boards, Finance