Requires landlord to provide written explanation for rent increase.

A1308

ASSEMBLY, No. 1308

STATE OF NEW JERSEY

222nd LEGISLATURE

�

PRE-FILED FOR INTRODUCTION IN THE 2026 SESSION

Sponsored by:

Assemblyman CODY D. MILLER

District 4 (Atlantic, Camden and Gloucester)

Co-Sponsored by:

Assemblyman Hutchison

SYNOPSIS

���� Requires landlord to provide written explanation for
rent increase.

CURRENT VERSION OF TEXT

���� Introduced Pending Technical Review by Legislative
Counsel.

��

An Act

requiring written explanation for rent increases, supplementing chapter 27D of
Title 52 of the Revised Statutes, and amending P.L.1974, c.49..

����
Be It
Enacted
by the Senate and General Assembly of
the State of New Jersey:

���� 1.� (New section)� The
Legislature finds and declares that:

���� a.�
The cost of housing in New Jersey, including rental
housing, constitutes one of the most substantial financial challenges faced by
New Jersey residents;

���� b.� Due to the housing shortage in this State, in
addition to the disparity in bargaining power between residential tenants and
their landlords, a significant number of
New Jersey residents struggle
to afford and dispute rent increases by their landlords;

���� c.� New Jersey law requires a
landlord to provide a written notice to the tenant whenever the landlord
intends to increase rent, and a written notice to quit, or terminate, the
tenancy at the end of the lease term;

���� d.�
State law has not set forth a precise limit on rent
increases, but has instead required that a rent increase not be
"unconscionable," which may be asserted as a defense to an eviction
by a residential tenant pursuant to subsection f. of section 2 of P.L.1974,
c.49 (C.2A:18-61.1);

���� e.� The term "unconscionable" has been defined
on a case-by-case basis by the courts using the multi-factor test set forth in
case law, which requires, among the other factors, a court to look at a
landlord�s expenses and profitability, and determine whether the rent increase
would

"
shock the
conscience
"
of a
reasonable person;

���� f.� Due to the summary nature
of landlord-tenant proceedings, limited discovery, case-by-case determinations
of unconscionability, disparity of bargaining power, and limited precedent
setting forth a bright line standard for unconscionable rent increases,
residential tenants are limited in their ability to collect sufficient
information in advance of the landlord�s increase or, if necessary, eviction
proceedings, to dispute a rent increase; and

���� g.� Therefore, the Legislature
finds and declares that to protect the health, housing stability, financial
security, and well-being of residential tenants, it is in the public interest
to require a landlord, when raising rent, to provide a tenant written
explanation for the rent increase, and certain, critical information.

���� 2.� (New section)� A landlord
who violates paragraphs (1) or (2) of subsection f. of section 2 of P.L.1974,
c.49 (C.2A:18-61.1) shall:

���� (1)� be liable to a penalty of
$500, which shall be collected and enforced by summary proceedings pursuant to
the "Penalty Enforcement Law of 1999," P.L.1999, c.274 (C.2A:58-10 et
seq.).� The Superior Court, Law Division, Special Civil Part in the county in
which the residential rental property is located shall have jurisdiction over
the proceedings.� Process shall be in the nature of a summons or warrant, and
shall issue upon the complaint of the Commissioner of Community Affairs or the
Attorney General; and

���� (2)� at the discretion of the
tenant, be subject to a separate cause of action by the tenant in the Superior
Court, Law Division, Special Civil Part in the county in which the rental
premises are located.� The tenant may recover $500 for each offense by the
landlord, in addition to reasonable attorney�s fees or expenses.

���� 3.��� Section 2 of P.L.1974,
c.49 (C.2A:18-61.1) is amended to read as follows:

���� 2.��� No lessee or tenant or
the assigns, under-tenants or legal representatives of such lessee or tenant
may be removed by the Superior Court from any house, building, mobile home or
land in a mobile home park or tenement leased for residential purposes, other
than (1) owner-occupied premises with not more than two rental units or a
hotel, motel or other guest house or part thereof rented to a transient guest
or seasonal tenant; (2) a dwelling unit which is held in trust on behalf of a
member of the immediate family of the person or persons establishing the trust,
provided that the member of the immediate family on whose behalf the trust is
established permanently occupies the unit; and (3) a dwelling unit which is
permanently occupied by a member of the immediate family of the owner of that
unit, provided, however, that exception (2) or (3) shall apply only in cases in
which the member of the immediate family has a developmental disability, except
upon establishment of one of the following grounds as good cause:

���� a.���� The person fails to pay
rent due and owing under the lease whether the same be oral or written;
provided that, for the purposes of this section, any portion of rent unpaid by
a tenant to a landlord but utilized by the tenant to continue utility service to
the rental premises after receiving notice from an electric, gas, water or
sewer public utility that such service was in danger of discontinuance based on
nonpayment by the landlord, shall not be deemed to be unpaid rent.

���� b.��� The person has continued
to be, after written notice to cease, so disorderly as to destroy the peace and
quiet of the occupants or other tenants living in said house or neighborhood.

���� c.���� The person has
willfully or by reason of gross negligence caused or allowed destruction,
damage or injury to the premises.

���� d.��� The person has
continued, after written notice to cease, to substantially violate or breach
any of the landlord's rules and regulations governing said premises, provided
such rules and regulations are reasonable and have been accepted in writing by
the tenant or made a part of the lease at the beginning of the lease term.

���� e.���� (1)�� The person has
continued, after written notice to cease, to substantially violate or breach
any of the covenants or agreements contained in the lease for the premises
where a right of reentry is reserved to the landlord in the lease for a
violation of such covenant or agreement, provided that such covenant or
agreement is reasonable and was contained in the lease at the beginning of the
lease term.

���� (2)�� In public housing under
the control of a public housing authority or redevelopment agency, the person
has substantially violated or breached any of the covenants or agreements
contained in the lease for the premises pertaining to illegal uses of controlled
dangerous substances, or other illegal activities, whether or not a right of
reentry is reserved to the landlord in the lease for a violation of such
covenant or agreement, provided that such covenant or agreement conforms to
federal guidelines regarding such lease provisions and was contained in the
lease at the beginning of the lease term.

���� f.���� The person has failed
to pay rent after a valid
written
notice to quit and
written

notice of increase of said rent, provided the increase in rent is not
unconscionable and complies with any and all other laws or municipal ordinances
governing rent increases
, and provided that the landlord complies with
paragraphs (1) and (2) of this subsection
.�

����
(1)� The landlord shall
provide in the written notice of increase in rent an explanation of the reasons
for the rent increase, which shall:

����
(a)� describe why the rent
increase is not unconscionable;

����
(b)� confirm that the rent
increase complies with all municipal ordinances, and all other applicable laws,
governing rent increases; and

����
(c)� list the expenses, if
any, associated with the tenant�s unit, and with common areas of the property,
as applicable, that have contributed to the need for a rent increase.�

����
(2)� If the tenant is a
resident of a senior citizen housing project, as defined in section 2 of
P.L.1995, c.144 (C.2A:42-113), then the written notice of increase in rent
shall include:

����
(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 REFUSE TO PAY THAT RENT
INCREASE. �HOWEVER, UNDER STATE LAW, IF THE TENANT CHOOSES NOT TO PAY THE RENT
INCREASE, BUT REMAINS IN THE UNIT, THE LANDLORD IS PERMITTED TO TAKE LEGAL
ACTION AGAINST THE TENANT FOR FAILURE TO PAY THE REASONABLY INCREASED RENT. �DURING
THIS PROCEEDING, THE BURDEN OF PROOF IS ON THE LANDLORD TO DEMONSTRATE TO THE
COURT THAT THE RENT INCREASE IS NOT UNCONSCIONABLE AND COMPLIES WITH ANY AND
ALL OTHER LAWS OR MUNICIPAL ORDINANCES GOVERNING RENT INCREASES. �PRIOR TO
CHALLENGING A RENT INCREASE, THE TENANT IS ENCOURAGED TO SPEAK WITH THE CONTACT
INDIVIDUAL NAMED IN THIS NOTICE, AND MAY ALSO CHOOSE TO CONSULT WITH AN
ATTORNEY.

����
(3)� A landlord who
violates paragraphs (1) or (2) of this subsection shall be liable to the
penalties and action set forth by section 2 of P.L.��� , c.��� (C.������� )
(pending before the Legislature as this bill).

���� g.��� The landlord or owner
(1) seeks to permanently board up or demolish the premises because he has been
cited by local or State housing inspectors for substantial violations affecting
the health and safety of tenants and it is economically unfeasible for the
owner to eliminate the violations; (2) seeks to comply with local or State
housing inspectors who have cited him for substantial violations affecting the
health and safety of tenants and it is unfeasible to so comply without removing
the tenant; simultaneously with service of notice of eviction pursuant to this
clause, the landlord shall notify the Department of Community Affairs of the
intention to institute proceedings and shall provide the department with such
other information as it may require pursuant to rules and regulations.� The
department shall inform all parties and the court of its view with respect to
the feasibility of compliance without removal of the tenant and may in its
discretion appear and present evidence; (3) seeks to correct an illegal
occupancy because he has been cited by local or State housing inspectors or
zoning officers and it is unfeasible to correct such illegal occupancy without
removing the tenant; or (4) is a governmental agency which seeks to permanently
retire the premises from the rental market pursuant to a redevelopment or land
clearance plan in a blighted area.� In those cases where the tenant is being
removed for any reason specified in this subsection, no warrant for possession
shall be issued until P.L.1967, c.79 (C.52:31B-1 et seq.) and P.L.1971, c.362
(C.20:4-1 et seq.) have been complied with.

���� h.��� The owner seeks to
retire permanently the residential building or the mobile home park from
residential use or use as a mobile home park, provided this subsection shall
not apply to circumstances covered under subsection g. of this section.

���� i.���� The landlord or owner
proposes, at the termination of a lease, reasonable changes of substance in the
terms and conditions of the lease, including specifically any change in the
term thereof, which the tenant, after written notice, refuses to accept; provided
that in cases where a tenant has received a notice of termination pursuant to
subsection g. of section 3 of P.L.1974, c.49 (C.2A:18-61.2), or has a protected
tenancy status pursuant to the "Senior Citizens and Disabled Protected
Tenancy Act," P.L.1981, c.226 (C.2A:18-61.22 et al.), or pursuant to the
"Tenant Protection Act of 1992," P.L.1991, c.509 (C.2A:18-61.40 et
al.), the landlord or owner shall have the burden of proving that any change in
the terms and conditions of the lease, rental or regulations both is reasonable
and does not substantially reduce the rights and privileges to which the tenant
was entitled prior to the conversion.

���� j.���� The person, after
written notice to cease, has habitually and without legal justification failed
to pay rent which is due and owing.

���� k.��� The landlord or owner of
the building or mobile home park is converting from the rental market to a
condominium, cooperative or fee simple ownership of two or more dwelling units
or park sites, except as hereinafter provided in subsection l. of this section.�
Where the tenant is being removed pursuant to this subsection, no warrant for
possession shall be issued until this act has been complied with.� No action
for possession shall be brought pursuant to this subsection against a senior
citizen tenant or disabled tenant with protected tenancy status pursuant to the
"Senior Citizens and Disabled Protected Tenancy Act," P.L.1981, c.226
(C.2A:18-61.22 et al.), or against a qualified tenant under the "Tenant
Protection Act of 1992," P.L.1991, c.509 (C.2A:18-61.40 et al.), as long
as the agency has not terminated the protected tenancy status or the protected
tenancy period has not expired.

���� l.���� (1)�� The owner of a
building or mobile home park, which is constructed as or being converted to a
condominium, cooperative or fee simple ownership, seeks to evict a tenant or
sublessee whose initial tenancy began after the master deed, agreement
establishing the cooperative or subdivision plat was recorded, because the
owner has contracted to sell the unit to a buyer who seeks to personally occupy
it and the contract for sale calls for the unit to be vacant at the time of
closing.� However, no action shall be brought against a tenant under paragraph
(1) of this subsection unless the tenant was given a statement in accordance
with section 6 of P.L.1975, c.311 (C.2A:18-61.9);

���� (2)�� The owner of three or
less condominium or cooperative units seeks to evict a tenant whose initial
tenancy began by rental from an owner of three or less units after the master
deed or agreement establishing the cooperative was recorded, because the owner
seeks to personally occupy the unit, or has contracted to sell the unit to a
buyer who seeks to personally occupy it and the contract for sale calls for the
unit to be vacant at the time of closing;

���� (3)�� The owner of a building
of three residential units or less seeks to personally occupy a unit, or has
contracted to sell the residential unit to a buyer who wishes to personally
occupy it and the contract for sale calls for the unit to be vacant at the time
of closing.

���� m.�� The landlord or owner
conditioned the tenancy upon and in consideration for the tenant's employment
by the landlord or owner as superintendent, janitor or in some other capacity
and such employment is being terminated.

���� n.��� The person has been
convicted of or pleaded guilty to, or if a juvenile, has been adjudicated
delinquent on the basis of an act which if committed by an adult would
constitute an offense under the "Comprehensive Drug Reform Act of
1987," N.J.S.2C:35-1 et al., involving the use, possession, manufacture,
dispensing or distribution of a controlled dangerous substance, controlled
dangerous substance analog or drug paraphernalia within the meaning of that act
within or upon the leased premises or the building or complex of buildings and
land appurtenant thereto, or the mobile home park, in which those premises are
located, and has not in connection with his sentence for that offense either
(1) successfully completed or (2) been admitted to and continued upon probation
while completing, a drug rehabilitation program pursuant to N.J.S.2C:35-14; or,
being the tenant or lessee of such leased premises, knowingly harbors or
harbored therein a person who has been so convicted or has so pleaded, or
otherwise permits or permitted such a person to occupy those premises for
residential purposes, whether continuously or intermittently, except that this
subsection shall not apply to a person harboring or permitting a juvenile to
occupy the premises if the juvenile has been adjudicated delinquent upon the
basis of an act which if committed by an adult would constitute the offense of
use or possession under the said act.� No action for removal may be brought
pursuant to this subsection more than two years after the date of the adjudication
or conviction or more than two years after the person's release from
incarceration whichever is the later.

���� o.��� The person has been
convicted of or pleaded guilty to, or if a juvenile, has been adjudicated
delinquent on the basis of an act which if committed by an adult would
constitute an offense under N.J.S.2C:12-1 or N.J.S.2C:12-3 involving assault,
or terroristic threats against the landlord, a member of the landlord's family
or an employee of the landlord; or, being the tenant or lessee of such leased
premises, knowingly harbors or harbored therein a person who has been so
convicted or has so pleaded, or otherwise permits or permitted such a person to
occupy those premises for residential purposes, whether continuously or
intermittently.� No action for removal may be brought pursuant to this
subsection more than two years after the adjudication or conviction or more
than two years after the person's release from incarceration whichever is the
later.

���� p.��� The person has been
found, by a preponderance of the evidence, liable in a civil action for removal
commenced under this act for an offense under N.J.S.2C:20-1 et al. involving
theft of property located on the leased premises from the landlord, the leased
premises or other tenants residing in the leased premises, or N.J.S.2C:12-1 or
N.J.S.2C:12-3 involving assault or terroristic threats against the landlord, a
member of the landlord's family or an employee of the landlord, or under the
"Comprehensive Drug Reform Act of 1987," N.J.S.2C:35-1 et al.,
involving the use, possession, manufacture, dispensing or distribution of a
controlled dangerous substance, controlled dangerous substance analog or drug
paraphernalia within the meaning of that act within or upon the leased premises
or the building or complex of buildings and land appurtenant thereto, or the
mobile home park, in which those premises are located, and has not in
connection with his sentence for that offense either (1) successfully completed
or (2) been admitted to and continued upon probation while completing a drug
rehabilitation program pursuant to N.J.S.2C:35-14; or, being the tenant or
lessee of such leased premises, knowingly harbors or harbored therein a person
who committed such an offense, or otherwise permits or permitted such a person
to occupy those premises for residential purposes, whether continuously or
intermittently, except that this subsection shall not apply to a person who
harbors or permits a juvenile to occupy the premises if the juvenile has been
adjudicated delinquent upon the basis of an act which if committed by an adult
would constitute the offense of use or possession under the said
"Comprehensive Drug Reform Act of 1987."

���� q.��� The person has been
convicted of or pleaded guilty to, or if a juvenile, has been adjudicated
delinquent on the basis of an act which if committed by an adult would
constitute an offense under N.J.S.2C:20-1 et al. involving theft of property
from the landlord, the leased premises or other tenants residing in the same
building or complex; or, being the tenant or lessee of such leased premises,
knowingly harbors therein a person who has been so convicted or has so pleaded,
or otherwise permits such a person to occupy those premises for residential
purposes, whether continuously or intermittently.

���� r.���� The person is found in
a civil action, by a preponderance of the evidence, to have committed a
violation of the human trafficking provisions set forth in section 1 of
P.L.2005, c.77 (C.2C:13-8)� within or upon the leased premises or the building
or complex of buildings and land appurtenant thereto, or the mobile home park,
in which those premises are located; or, being the tenant or lessee of such
leased premises, knowingly harbors or harbored therein a person who has been
engaged in human trafficking, or otherwise permits or permitted such a person
to occupy those premises for residential purposes, whether continuously or
intermittently.� No action for removal may be brought pursuant to this
subsection more than two years after the alleged violation has terminated.� A
criminal conviction or a guilty plea to a crime of human trafficking under
section 1 of P.L.2005, c.77 (C.2C:13-8) shall be considered prima facie
evidence of civil liability under this subsection.

���� For purposes of this section,
(1) "developmental disability" means any disability which is defined
as such pursuant to section 3 of P.L.1977, c.82 (C.30:6D-3); (2) "member
of the immediate family" means a person's spouse, parent, child or
sibling, or a spouse, parent, child or sibling of any of them; and (3)
"permanently" occupies or occupied means that the occupant maintains
no other domicile at which the occupant votes, pays rent or property taxes or
at which rent or property taxes are paid on the occupant's behalf.

(cf: P.L.2013, c.51, s.7)

���� 4.� The Commissioner of
Community Affairs shall, in accordance with the "Administrative Procedure
Act," P.L.1968, c.410 (C.52:14B-1 et seq.), adopt rules and regulations as
necessary to implement this act.

���� 5.� This act shall take effect
on the first day of the third month next following enactment, and shall apply
to any notice of a rent increase provided to a tenant by a landlord on or after
the effective date, except that the Commissioner of Community Affairs may take
such anticipatory actions as may be necessary to effectuate the provisions of
this act.

STATEMENT

���� This bill requires, along with
the existing rent increase notice requirements, that a landlord provide a
written explanation for a rent increase, which would:

���� (1)�� describe why the rent
increase is not unconscionable;

���� (2)�� confirm that the
increase complies with municipal ordinances, and other applicable laws; and

���� (3)�� list any expenses
associated with the tenant�s unit and common areas of the property that have
contributed to the need for the rent increase.

���� Additionally, the bill also
requires that if the tenant is a resident of a senior citizen housing project, which
refers to a building with three or more dwelling units, intended for, and solely
occupied by, senior citizens, then the written notice of increase in rent is to
include:

���� (a)� the contact information
of an individual authorized to speak to the tenants about the proposed rent
increase; and

���� (b)� a statement, provided in
the bill, 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.

���� The bill also adjusts the
underlying statutory language concerning notice requirements prior to rent
increases to clarify that those notices have to be in writing, and establishes
a penalty for a landlord�s violation of the bill of $500, enforceable: (1) in
an action brought by the Commissioner of Community Affairs or Attorney General;
and (2) in a separate cause of action brought by and at the discretion of the
tenant, who may recover the $500 penalty, in addition to reasonable attorney�s
fees or expenses.

���� The bill would take effect on
the first day of the third month next following enactment, and would apply to
any notice of a rent increase provided to a tenant by a landlord on or after
that date.

���� The cost of housing in New Jersey, including rental
housing, constitutes one of the most substantial financial challenges faced by
residents of this State.� Due to the housing shortage, in addition to the
disparity in bargaining power between residential tenants and their landlords,
a significant number of
New Jersey residents struggle to afford rent and
dispute rent increases by their landlords.� New Jersey law requires a landlord
to provide a written notice to the tenant whenever the landlord intends to
increase rent, and a written notice to quit, or terminate, the tenancy at the
end of the lease term.�
State
law has not set forth a precise limit on rent increases, but has instead
required that a rent increase not be "unconscionable," which may be
asserted as a defense to an eviction by a residential tenant pursuant to
subsection f. of section 2 of P.L.1974, c.49 (C.2A:18-61.1).� The term
"unconscionable" is defined on a case-by-case basis by the courts
using the multi-factor test set forth by
Fromet Properties, Inc. v. Buel
,
294 N.J. Super. 601 (App. Div. 1996), which requires, among the other factors,
a court to look at a landlord�s expenses and profitability, and determine
whether the rent increase
would �shock the conscience� of a reasonable
person.� Due to the summary nature of landlord-tenant proceedings, limited
discovery, case-by-case determinations of unconscionability, disparity of
bargaining power, and limited precedent setting forth a bright line standard
for unconscionable rent increases, residential tenants are limited in their
ability to collect sufficient information in advance of the landlord�s increase
or, if necessary, eviction proceedings, and dispute a rent increase.�
Therefore, to protect the public health, housing stability, financial security,
and well-being of residential tenants, it is in the public interest to require
a landlord to provide a tenant written explanation for a rent increase and
provide certain, specific notices.