A 3498

ASSEMBLY, No. 3498
STATE OF NEW JERSEY
222nd LEGISLATURE
�
PRE-FILED FOR INTRODUCTION IN THE 2026 SESSION
Sponsored by:
Assemblywoman YVONNE LOPEZ
District 19 (Middlesex)
SYNOPSIS
���� Authorizes residential tenant action in cases of
alleged unconscionable rent increase; appropriates $2 million.
CURRENT VERSION OF TEXT
���� Introduced Pending Technical Review by Legislative
Counsel.
��
An Act authorizing residential tenant action in cases of
alleged unconscionable rent increase, supplementing Title 2A of the New Jersey
Statutes, and making an appropriation.�
���� Be It
Enacted by the Senate and General Assembly of
the State of New Jersey:
���� 1.� a.� For the purposes of
this section:
���� �Consumer Price
Index� means the average of the annual increase, expressed as a percentage, in
the consumer price index for all urban consumers in the New York City and
Philadelphia metropolitan statistical areas during the preceding calendar year
as reported by the United States Department of Labor.
���� �Geographic
area� means within 10 miles of the residential property.
���� b.� (1)� Any notice of rent
increase provided by a landlord to a residential tenant shall include the
following:
���� (a)� the contact information
of an individual authorized to speak to the tenant about the proposed rent
increase; and
���� (b)� the following statement
in a bold typeface in a font size no less than one point larger than the point
size of the rest of the written statement or 11 points, whichever is larger:
���� NEW JERSEY LAW PROVIDES THAT A
TENANCY SHALL RENEW ON A MONTH-TO-MONTH BASIS AT THE EXPIRATION OF THE LEASE
TERM, UNLESS THE LEASE IS LAWFULLY TERMINATED.� A LANDLORD MAY INCREASE THE
RENT AT THE EXPIRATION OF A LEASE TERM, PROVIDED THAT THE NEW RENT COMPLIES
WITH APPLICABLE FEDERAL, STATE, AND LOCAL LAWS AND IS NOT UNCONSCIONABLE.� IF A
TENANT BELIEVES THAT THE RENT INCREASE IS NOT PERMITTED OR IS UNCONSCIONABLE,
THE TENANT HAS THE RIGHT TO REQUEST IN WRITING, WITHIN 10 DAYS OF RECEIPT OF
THE NOTICE OF THE RENT INCREASE, THAT THE LANDLORD PROVIDE THE RATIONALE USED
BY THE LANDLORD TO ESTABLISH THE AMOUNT OF THE RENT INCREASE, AND REQUEST A NEW
NOTICE OF RENT INCREASE, AND NEGOTIATE FOR A DIFFERENT AMOUNT.� THE LANDLORD IS
REQUIRED TO PROVIDE THE TENANT WITH ITS RATIONALE WITHIN 10 DAYS AFTER RECEIPT
OF THE TENANT�S WRITTEN REQUEST.� THE LANDLORD IS REQUIRED TO INCLUDE THE
FOLLOWING INFORMATION AS PART OF THEIR RATIONALE FOR ESTABLISHING THE RENT
INCREASE:
�
THE CHANGE IN THE CONSUMER PRICE INDEX SINCE THE LAST INCREASE IN
RENT, THE START OF THE PRESENT LEAST TERM, OR WITHIN THE PAST TWO YEARS,
WHICHEVER IS MOST RECENT;
�
THE LANDLORD�S EXPENSES, CONTAINING SPECIFIC FINANCIAL DATA,
ASSOCIATED WITH THE TENANT�S UNIT AND WITH THE COMMON AREAS OF THE PROPERTY,
WHICH CONTRIBUTED TO THE RENT INCREASE;
�
THE LANDLORD�S PROFITABILITY, CONTAINING SPECIFIC FINANCIAL DATA,
PRIOR TO THE RENT INCREASE, AND THE LANDLORD�S ANTICIPATED PROFITABILITY,
CONTAINING SPECIFIC FINANCIAL PROJECTIONS, AFTER THE PROPOSED RENT INCREASE;
�
A DESCRIPTION AND BRIEF COMPARISON OF HOW THE EXISTING AND
PROPOSED RENT COMPARES TO RENTS CHARGED AT SIMILAR RENTAL PROPERTIES IN THE
GEOGRAPHIC AREA, INCLUDING FAIR MARKET RENTS AND SMALL AREA MARKET RENTS;
�
THE LENGTH OF TIME SINCE THE LAST RENT INCREASE BY THE CURRENT
LANDLORD AGAINST THE RESIDENTIAL TENANT;
�
A DESCRIPTION OF THE CONDITION OF THE PROPERTY, INCLUDING BUT NOT
LIMITED TO, WHETHER THERE WERE MAINTENANCE REQUESTS OR CLAIMS RELATED TO
HABITABILITY, AND WHETHER THERE WERE ANY, OR CURRENTLY ARE, CODE VIOLATIONS FOR
THE TENANT�S UNIT OR COMMON AREAS; AND
�
A DESCRIPTION OF WHY THE LANDLORD BELIEVES THAT THE PROPOSED RENT
INCREASE IS NOT UNCONSCIONABLE.�
���� IF A TENANT AND LANDLORD ARE
UNABLE TO NEGOTIATE A RENT AMOUNT BEFORE THE DATE THAT A NEW LEASE TERM IS TO
BEGIN, OR WITHIN 30 DAYS OF THE DATE THAT A NOTICE OF INTENT TO VACATE OR
REMAIN IN THE UNIT IS REQUIRED BY THE CURRENT LEASE, WHICHEVER IS EARLIER, THEN
THE TENANT MAY BRING AN ACTION IN THE SUPERIOR COURT, LAW DIVISION, SPECIAL
CIVIL PART IN THE COUNTY IN WHICH THE PROPERTY IS LOCATED AGAINST THE LANDLORD
FOR RAISING THE RENT BY AN UNCONSCIONABLE AMOUNT.� AT COURT, THE LANDLORD, NOT
THE TENANT, BEARS THE BURDEN OF PROVING THAT THE RENT INCREASE IS NOT
UNCONSCIONABLE.
���� (2)� A residential tenant who
receives a notice of rent increase from a landlord and believes the increase in
rent to be unconscionable, pursuant to the standards established by subsection
d. of this section, may, within 10 days of receipt of the notice of rent
increase, submit in writing a request for the landlord to provide the rationale
used by the landlord to establish the amount of the rent increase and request a
new notice of rent increase in a lesser amount.�
���� (3)� Within 10 days after the
receipt of a residential tenant�s request, submitted pursuant to paragraph (2)
of this subsection, the landlord:
���� (a)� shall provide the
residential tenant in writing with the rationale for the amount of the rent
increase, which shall include the information required pursuant to paragraph
(4) of this subsection; and
���� (b)� may begin negotiating a
rent amount by providing the residential tenant with a new notice of rent
increase in a lesser amount than offered by the previous notice of rent
increase.
���� (4)� The landlord�s rationale,
required pursuant to subparagraph (a) of paragraph (3) of this subsection, for
the rent increase shall include the following:
���� (a)� the change in the
Consumer Price Index since the last increase in rent, the start of the present
least term, or within the past two years, whichever is most recent;
���� (b)� (i)� the landlord�s
expenses, containing specific financial data, associated with the tenant�s unit
and with the common areas of the property, which contributed to the rent
increase;
���� (ii)� the landlord�s
profitability, containing specific financial data, prior to the rent increase,
and the landlord�s anticipated profitability, containing specific financial
projections, after the proposed rent increase;
���� (iii)� the information
required pursuant to sub-subparagraphs (i) and (ii) of this subparagraph shall
include but not be limited to: the financial impact of new ownership or of
refinancing of the property, and improvements and maintenance to the rental unit
over the duration of the previous lease term.
���� (c)� a description and brief
comparison of how the existing and proposed rent compares to rents charged at
similar rental properties in the geographic area, including fair market rents
and small area market rents;
���� (d)� the length of time since
the last rent increase by the current landlord against the residential tenant;
���� (e)� a description of the
condition of the property, including but not limited to, whether there were
maintenance requests or claims related to habitability, and whether there were
any, or currently are, code violations for the tenant�s unit or common areas; and
���� (f)� a description of why the
landlord believes that the proposed rent increase is not unconscionable.�
���� c.� If a residential tenant
and landlord are unable to negotiate a rent amount before the date that a new
lease term is to begin, then the residential tenant may bring action in a court
of competent jurisdiction against the landlord for raising rent by an
unconscionable amount.
���� d.� In determining whether a
rent increase is unconscionable, the court shall consider:
���� (1)� the amount of the rent
increase proposed in the most recent notice of rent increase, including, but
not limited to, the consideration of the change in the Consumer Price Index
since the last increase in rent, but not more than the last two years;
���� (2)� the landlord�s expenses
and profitability, including, but not limited to, the consideration of new
ownership or refinancing of the rental unit, new or preexisting mortgages on
the property, and any improvements and maintenance to the rental unit over the
duration of the previous lease;
���� (3)� the financial
circumstances of the residential tenant;
���� (4)� how the existing and
proposed rent compare to rents charged at similar rental properties in the
geographic area, including fair market rents and small area market rents;
���� (5)� the relative bargaining
position of the parties, including but not limited to, consideration of the
availability of rental housing in the geographic area and any educational or
financial inequities between the parties; and
���� (6)� whether the rent increase
would shock the conscience of a reasonable person, which consideration shall
include but not be limited to, whether the rent amount includes utilities and
any utility rate increase approved by the relevant rate setter during the
previous 12 months;
���� (7)� the length of time since
the last rent increase by the current owner against the residential tenant, the
length of tenancy, and the length of property ownership; and
���� (8)� the condition of the
property, including but not limited to, claims related to the habitability of
the premises and outstanding code violations.�
���� e.� No one factor considered
by a court of competent jurisdiction, pursuant to subsection d. of this
section, shall be the sole factor in the court�s decision concerning an
unconscionable rent increase.
���� f.� The landlord shall bear
the burden of proof to demonstrate that a rent increase is conscionable.�
���� g.� (1)� If a court of
competent jurisdiction finds that the landlord�s most recent notice of rent
increase offered an increase in rent in an unconscionable amount, that the
landlord did not include in the notice of rent increase the required statement
specified pursuant to paragraph (1) of subsection b. of this section, or
provide the rationale required pursuant to paragraph (4) of subsection b. of
this section, the court shall require the landlord to offer the residential
tenant a 12-month lease for the unit occupied by the residential tenant in an
amount no greater than the amount of rent charged under the previous lease
agreed upon by both parties, plus the percentage change in the Consumer Price
Index, and shall require the tenant to pay any arrears accrued by the tenant to
the landlord in a timeframe determined by the court based upon relevant factors
considered by the court pursuant to subsection d. of this section.
���� (2)� If a court of competent
jurisdiction finds that the landlord�s most recent notice of increase offered
an increase in rent in a conscionable amount, the court shall require the
tenant to pay the landlord any arrears accrued by the tenant while the tenant�s
action was pending in court, including the amounts disputed.
���� h.� (1)� A landlord shall not
bring an eviction action against a residential tenant pursuant to subsections
a., f., i., or j. of section 2 of P.L.1974, c.49 (C.2A:18-61.1) during the
period of time in which the residential tenant�s action bought against the
landlord pursuant to subsection c. of this section is pending in a court of
competent jurisdiction.�
���� (2)� The provisions of this
subsection shall not be construed to prohibit a landlord from bringing an
eviction action against a residential tenant pursuant to subsections a., f.,
i., or j. of section 2 of P.L.1974, c.49 (C.2A:18-61.1), at any time for any
reason unrelated to the disputed rent increase.
���� i.� The provisions of this
section shall not be construed to limit a residential tenant�s ability to
challenge a proposed rent increase in defense of an eviction action or to file
separate claims against a landlord, including, but not limited to claims filed
pursuant to P.L.1960, c.39 (C.56:8-1 et seq.).
���� j.� The provisions of this
section shall not apply to a rent increase that is subject to and compliant
with a local rent control ordinance or approved ordinance variance.
���� k.� Court records concerning
an action brought by a residential tenant against a landlord pursuant to
subsection c. of this section shall remain confidential and shall be excluded
from public access.
���� l.� (1)� The Administrative
Office of the Courts shall develop and implement a public awareness campaign to
inform residential tenants and landlords of the policies and processes
established pursuant to this section.
���� (2)� The Administrative Office
of the Courts shall conduct a required training for judges who will hear cases
brought by a tenant against a landlord pursuant to subsection c. of this
section, and Special Civil Part court staff, to inform the judges and court
staff of the policies and processes established pursuant to this section.
���� 2.� There is appropriated
$2,000,000 from the General Fund to the Administrative Office of the Courts for
the purposes of P.L.    , c.    (C.        ) (pending
before the Legislature as this bill).� $1,000,000 of the funds appropriated to
the Administrative Office of the Courts shall be used for the development and
implementation of a public awareness campaign pursuant to subsection l. of
section 1 of P.L.��� , c.��� (C.������� ) (pending before the Legislature as
this bill) and $1,000,000 shall be used to conduct required training for judges
pursuant to subsection l. of section 1 of P.L.��� , c.��� (C.�� ���) (pending
before the Legislature as this bill).
���� 3.� This act shall take effect
on the first day of the sixth month next following enactment, except that the
Administrative Office of the Courts may take such anticipatory administrative
action necessary for the implementation of this act.�
STATEMENT
���� This bill authorizes
residential tenant action in cases of alleged unconscionable rent increases.�
The bill provides that a residential tenant who receives a notice of rent
increase from a landlord and believes the increase in rent to be unlawfully
unconscionable, may, within 10 days of receipt of the notice of rent increase,
request the landlord to provide in writing the rationale for the amount of the
rent increase and request a new notice of rent increase in a lesser amount.� ���� Within
10 days of a residential tenant�s request, the landlord would be required to
provide rationale for the amount of the rent increase and would be permitted to
begin a negotiation with the tenant by offering a new notice of rent increase
in a lesser amount.� The landlord is required to include in their written
rationale provided to the tenant the following information:
�
the change in the Consumer Price Index since the last increase in
rent, the start of the present least term, or within the past two years,
whichever is most recent;
�  the landlord�s
expenses, containing specific financial data, which contributed to the rent
increase;
�  the landlord�s
profitability, containing specific financial data, and the landlord�s
anticipated profitability, containing specific financial projections;
�  a description and
comparison of how the existing and proposed rent compares to rents charged at
similar rental properties in the geographic area;
�  the length of time
since the last rent increase;
�  a description of the
condition of the property, including but not limited to, whether there were
maintenance requests or claims related to habitability, and whether there were
any, or currently are, code violations for the tenant�s unit or common areas; and
�
a description of why the landlord believes that the proposed rent
increase is not unconscionable.�
���� If a residential tenant and
landlord are unable to negotiate a rent amount within 30 days from the date
that a new lease term begins, then the residential tenant would be authorized
to bring an action against the landlord in a court of competent jurisdiction
for raising rent by an unconscionable amount.�
���� To determine whether a rent
increase is unconscionable, the court would be required to consider: the amount
of the rent increase proposed in the most recent notice of rent increase; the
landlord�s expenses and profitability; the financial circumstances of the
residential tenant; how the existing and proposed rent compare to rents charged
at similar rental properties in the geographic area; the relative bargaining
position of the parties; whether the rent increase would shock the conscience
of a reasonable person; the length of time since the last rent increase by the
current owner against the residential tenant, the length of tenancy, and the
length of property ownership; and the condition of the property.�
���� If the court finds that the
landlord offered an increase in rent in an unconscionable amount, that the
landlord did not include in the notice of rent increase the required statement
specified by the bill, or provide the rationale required by the bill, the court
would require the landlord to offer the residential tenant a 12-month lease for
the property occupied by the residential tenant in an amount no greater than
the amount of rent charged under the previous lease agreed upon by both
parties, plus inflation, and would require the tenant to pay any arrears, based
upon relevant factors considered by the court during the case.�
���� If the court finds that the
landlord�s most recent notice of increase offered an increase in rent in a
conscionable amount, the court would require the tenant to pay the landlord any
arrears accrued by the tenant while the tenant�s action was pending in court,
including the amounts disputed.
���� A landlord would be prohibited
from bringing certain eviction actions against a residential tenant pursuant to
section 2 of P.L.1974, c.49 (C.2A:18-61.1) during the period of time in which
the residential tenant�s action is pending in court, unless the eviction action
is unrelated to the disputed rent increase.
���� The bill provides that its
provisions would not be applicable to rent increases that are subject to and
compliant with a local rent control ordinance.� The bill also provides that any
court records concerning an action brought by a residential tenant against a
landlord are required to remain confidential and be excluded from public
access.
���� The bill also requires the
Administrative Office of the Courts to: 1) develop and implement a public
awareness campaign to inform residential tenants and landlords of the policies
and processes established by the bill, and 2) to conduct a required training
for judges who will hear cases of alleged unconscionable rent increase brought
by a tenant against a landlord and court staff.� The bill appropriates $1
million to the Administrative Office of the Courts for each of these purposes.�
���� The bill would take effect on
the first day of the sixth month following enactment except that the
Administrative Office of the Courts may take anticipatory administrative action
necessary to effectuate the provisions of the bill.