Expands liability of certain individuals associated with limited liability companies and other commercial entities, when acting as residential landlord.

A4856

ASSEMBLY, No. 4856

STATE OF NEW JERSEY

222nd LEGISLATURE

�

INTRODUCED MAY 4, 2026

Sponsored by:

Assemblywoman� VERLINA REYNOLDS-JACKSON

District 15 (Hunterdon and Mercer)

Assemblywoman� MARGIE DONLON, M.D.

District 11 (Monmouth)

Co-Sponsored by:

Assemblywoman Peterpaul, Assemblyman Miller, Assemblywomen
Haider and Speight

SYNOPSIS

���� Expands liability of certain individuals associated
with limited liability companies and other commercial entities, when acting as
residential landlord.

CURRENT VERSION OF TEXT

���� As introduced.

��

An Act
concerning rental housing and liability of individuals
associated with limited liability companies and other commercial entities, and
supplementing and amending various parts of the statutory law.�

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

���� 1.��� (New section)� a.� A
court may hold a corporation, limited liability company, or other legal or
commercial entity liable for charges issued to that entity pursuant to a
housing code, building code, or health code.

���� b.��� Notwithstanding any
provision of section 30 of the �Revised Uniform Limited Liability Company Act,�
P.L.2012, c.50 (C.42:2C-30), or any other provision of law to the contrary, with
regard to any charge issued following the effective date of P.L. , c. (C. ) (pending
before the Legislature as this bill), a court may hold the members of a member-managed
limited liability company, the managers of a manager-managed limited liability
company, and the directors and officers of a corporation, jointly and severally
liable for housing code, building code, or health code charges, so long as:

���� (1)� there are at least three
charges concerning the property leased by the entity for residential purposes;

���� (2)� at least three charges
remain unpaid on the first day of the thirteenth month next following the due
date of the first charge;

���� (3)� notice of the charge and
impending enforcement under this section has been issued to the address of the
record owner, the registered agent, the managing agent, the members and
managers in the case of a limited liability company, the directors and officers
in the case of a corporation, and each holder of a recorded mortgage and other
existing lienholders, if provided within the landlord�s registration
information pursuant to section 2 of P.L.1974, c.50 (C.46:8-28).� If the
landlord is not registered, in violation of section 2 of P.L.1974, c.50 (C.46:8-28),
then the notice required under this paragraph shall not apply.� The notice
provided to an individual pursuant to this paragraph shall be sufficient even
if the corporation or limited liability company ceases to own the property, so
long as the same individual has a role as a registered agent, managing agent,
member, manager, director, or officer of the commercial entity serving as the
new owner of the property;

���� (4)� the individual, if a
member of a member-managed limited liability company, possesses at least a 10
percent interest in the business; and

���� (5)� the individual does not
successfully assert an affirmative defense pursuant to subsection c. of this
section.

���� c.��� It is an affirmative
defense to joint and several liability under this section, if the defendant did
not have the ability to ensure payment of the charge, due to a limited duration
of involvement with the commercial entity or for another reason, if determined
by the court to eliminate the defendant�s culpability for the non-payment of
the charge.

���� d.��� As used in this section,
�charge� means any fee, fine, penalty, or other charge issued to a landlord,
concerning residential property leased by the landlord, pursuant to a housing,
building, or health code.

���� 2.��� (New section)� a.� A
court may hold a corporation, limited liability company, or other legal or
commercial entity liable for charges issued to that entity pursuant to the "Hotel
and Multiple Dwelling Law," P.L.1967, c.76 (C.55:13A-1 et seq.).

���� b.��� Notwithstanding any
provision of section 30 of the �Revised Uniform Limited Liability Company Act,�
P.L.2012, c.50 (C.42:2C-30), or any other provision of law to the contrary, with
regard to any charge issued following the effective date of P.L. , c. (C. ) (pending
before the Legislature as this bill), a court may hold the members of a member-managed
limited liability company, the managers of a manager-managed limited liability
company, and the directors and officers of a corporation, jointly and severally
liable for charges issued pursuant to the "Hotel and Multiple Dwelling
Law," P.L.1967, c.76 (C.55:13A-1 et seq.), so long as:

���� (1)� there are at least three
charges concerning the property leased by the entity for residential purposes;

���� (2)� at least three charges
remain unpaid on the first day of the thirteenth month next following the due
date of the first charge;

���� (3)� notice of the charge and
impending enforcement under this section has been issued to the address of the
record owner, the registered agent, the managing agent, the members and
managers in the case of a limited liability company, the directors and officers
in the case of a corporation, and each holder of a recorded mortgage and other
existing lienholders, if provided within the landlord�s registration
information pursuant to section 2 of P.L.1974, c.50 (C.46:8-28).� If the
landlord is not registered, in violation of section 2 of P.L.1974, c.50 (C.46:8-28),
then the notice required under this paragraph shall not apply.� The notice
provided to an individual pursuant to this paragraph shall be sufficient even
if the corporation or limited liability company ceases to own the property, so
long as the same individual has a role as a registered agent, managing agent,
member, manager, director, or officer of the commercial entity serving as the
new owner of the property;

���� (4)� the individual, if a
member of a member-managed limited liability company, possesses at least a 10
percent interest in the business; and

���� (5)� the individual does not
successfully assert an affirmative defense pursuant to subsection c. of this
section.

���� c.��� It is an affirmative
defense to joint and several liability under this section, if the defendant did
not have the ability to ensure payment of the charge, due to a limited duration
of involvement with the commercial entity or for another reason, if determined
by the court to eliminate the defendant�s culpability for the non-payment of
the charge.

���� d.��� As used in this section,
�charge� means any fee, fine, penalty, or other charge issued to a landlord,
concerning residential property leased by the landlord, pursuant to the
"Hotel and Multiple Dwelling Law," P.L.1967, c.76 (C.55:13A-1 et
seq.).

���� 3.��� (New section)� a.� With
regard to any charge issued following the effective date of P.L.��� , c.���
(C.������� ) (pending before the Legislature as this bill), the directors of a
corporation shall be jointly and severally liable for:

���� (1)� housing code, building
code, or health code charges, so long as the conditions under subsection b. of
section 1 of P.L.��� , c.�� (C ) (pending before the Legislature as this bill)
have been satisfied; and

���� (2)� charges issued pursuant
to the "Hotel and Multiple Dwelling Law," P.L.1967, c.76 (C.55:13A-1
et seq.), so long as the conditions under subsection b. of section 2 of P.L.���
, c.��� (C.������� ) (pending before the Legislature as this bill) have been
satisfied.

���� b.��� As used in this section,
�charge� means any fee, fine, penalty, or other charge issued to a landlord,
concerning residential property leased by the landlord, pursuant to a housing,
building, or health code, and any charge issued pursuant to the "Hotel and
Multiple Dwelling Law," P.L.1967, c.76 (C.55:13A-1 et seq.).

���� 4.��� (New section)� a.� With
regard to any charge issued following the effective date of P.L.��� , c.���
(C.������� ) (pending before the Legislature as this bill), the officers of a
corporation shall be jointly and severally liable for:

���� (1)� housing code, building
code, or health code charges, so long as the conditions under subsection b. of
section 1 of P.L.��� ,

c.�� (C. ) (pending before the
Legislature as this bill) have been satisfied; and

���� (2)� charges issued pursuant
to the "Hotel and Multiple Dwelling Law," P.L.1967, c.76 (C.55:13A-1
et seq.), so long as the conditions under subsection b. of section 2 of P.L.���
, c.��� (C.������� ) (pending before the Legislature as this bill) have been
satisfied.

���� b.��� As used in this section,
�charge� means any fee, fine, penalty, or other charge issued to a landlord,
concerning residential property leased by the landlord, pursuant to a housing,
building, or health code, and any charge issued pursuant to the "Hotel and
Multiple Dwelling Law," P.L.1967, c.76 (C.55:13A-1 et seq.).

���� 5.��� Section 30 of P.L.2012,
c.50 (C.42:2C-30) is amended to read as follows:

���� 30.� a.� The debts,
obligations, or other liabilities of a limited liability company, whether
arising in contract, tort, or otherwise:

���� (1)� are solely the debts,
obligations, or other liabilities of the company; and

���� (2)� do not become the debts,
obligations, or other liabilities of a member or manager solely by reason of
the member acting as a member or manager acting as a manager.�

���� b.��� The failure of a limited
liability company to observe any particular formalities relating to the
exercise of its powers or management of its activities is not a ground for
imposing liability on the members or managers for the debts, obligations, or
other liabilities of the company.

����
c.��� Notwithstanding any
provision of this section to the contrary, with regard to any charge issued
following the effective date of P.L., c.��� (C.������� ) (pending before the
Legislature as this bill), the members of a member-managed limited liability
company who possess at least a 10 percent interest in the business, and the
managers of a manager-managed limited liability company, shall be jointly and
severally liable for:

����
(1)� housing code, building
code, or health code charges, so long as the conditions under subsection b. of
section 1 of
P.L. , c. (C. ) (pending
before the Legislature as this bill) have been satisfied; and

����
(2)� charges issued
pursuant to the "Hotel and Multiple Dwelling Law," P.L.1967, c.76
(C.55:13A-1 et seq.), so long as the conditions under subsection b. of section
2 of P.L.��� , c.��� (C.������� ) (pending before the Legislature as this bill)
have been satisfied.

(cf: P.L.2012, c.50, s.30)

���� 6.��� Section 2 of P.L.1974,
c.50 (C.46:8-28) is amended to read as follows:

���� 2.��� Every landlord shall,
within 30 days following the effective date of
[
this act
]

P.L.1974,
c.50 (C.46:8-28)
, or at the time of the creation of the first tenancy in
any newly constructed or reconstructed building, file with the clerk of the
municipality, or with such other municipal official as is designated by the
clerk, in which the residential property is situated, in the case of a
one-dwelling unit rental or a two-dwelling unit non-owner occupied premises, or
with the Bureau of Housing Inspection in the Department of Community Affairs in
the case� of a multiple dwelling as defined in section 3 of the� "Hotel
and Multiple� Dwelling Law"� (C.55:13A-3), a certificate of registration
on forms prescribed� by the Commissioner of Community Affairs, which shall
contain the following� information:

���� a.��� The name and address of
the record owner or owners of the premises and the record owner or owners of
the rental business if not the same persons.� In the case of a partnership the
names of all general partners shall be provided;

���� b.��� If the record owner is a
corporation,
a limited liability company, or any other legal or commercial
entity,
the name and address of the registered agent
, the members with
at least a 10 percent interest in a member-managed limited liability company,
the managers of a manager-managed limited liability company,
and
[
corporate
]

the

officers
[
of
said corporation
]

and directors of a corporation, as applicable
;

���� c.��� If the address of any
record owner is not located in the county in which the premises are located,
the name and address of a person who resides in the county in which the
premises are located and is authorized to accept notices� from a tenant and to
issue receipts therefor and to accept service of process� on behalf of the
record owner;

���� d.��� The name and address of
the managing agent of the premises, if any;

���� e.��� The name and address,
including the dwelling unit, apartment or room number of the superintendent,
janitor, custodian or other individual employed by the record owner or managing
agent to provide regular maintenance service, if any;

���� f.���� The name, address and
telephone number of an individual representative of the record owner or
managing agent who may be reached or contacted at any time in the event of an
emergency affecting the premises or any unit of dwelling space therein,
including such emergencies as the failure of any essential service or system,
and who has the authority to make emergency decisions concerning the building
and any repair thereto or expenditure in connection therewith and shall, at all
times, have access to a current list of building tenants that shall be made
available to emergency personnel as required in the event of an emergency;

���� g.��� The name and address of
every holder of a recorded mortgage on the premises;

���� h.��� If fuel oil is used to
heat the building and the landlord furnishes the heat in the building, the name
and address of the fuel oil dealer servicing the� building and the grade of
fuel oil used.

(cf: P.L.2003, c.56, s.2)

���� 7.��� Section 3 of P.L.1981,
c.442 (C.46:8-28.1) is amended to read as follows:

���� 3.��� In the case of a filing
under section 2 of P.L.1974, c.50 (C.46:8-28) with the municipal clerk, or with
such other municipal official as is designated by the clerk, the clerk or
designated official shall index and file the certificate
[
and
]

,
make
it reasonably available for public inspection
, and shall notify the
construction official, appointed pursuant to section 8 of P.L.1975, c.217
(C.52:27D-126), of the name and address of the record owner, and registered
agent as applicable
.� In the case of a filing with the Bureau of Housing
Inspection, the filing shall be accompanied by the filing fee required pursuant
to section 12 of P.L.1967, c. 76 (C. 55:13A-12). The
bureau shall review the certificate and, if it is found to be in conformity
with this law and any regulations promulgated hereunder, validate the
certificate and issue a validated copy to the landlord and a validated copy to
the clerk of the municipality in which the building or project is located.� The
clerk shall index the validated certificates, or forward them to the designated
official for indexing, and the certificates shall be made available as with the
certificates required of one and two dwelling unit nonowner occupied premises.

(cf: P.L.2001, c.264, s.2)

���� 8.��� (New section)� a.� A
municipality may direct by ordinance of the governing body that any charge
issued to a landlord pursuant to a housing code, building code, or health code,
concerning residential property leased by the landlord, shall become a lien on
the property, enforceable in the manner provided for real property tax liens in
chapter 5 of Title 54 of the Revised Statutes, if the charge remains unpaid on
the first day of the thirteenth month next following the date when the charge
becomes due and owing.� At least 90 days prior to filing an unpaid charge as a
municipal lien against the property pursuant to this section, the municipality
shall serve written notice to the property owner, and the other parties in interest,
indicating that if the charge remains unpaid it shall be converted into a
municipal lien, and shall provide the owner the opportunity to pay the fine or
request a hearing before a court of competent jurisdiction.� If the landlord is
not registered, in violation of section 2 of P.L.1974, c.50 (C.46:8-28), then
this additional notice requirement concerning the landlord shall not apply
prior to conversion into a municipal lien.� In a municipality that has adopted
an ordinance under this subsection, at the time when the charge becomes a lien,
the municipal officer responsible for housing code enforcement shall file a
copy of the lien and certification with the municipal tax collector.� This lien
shall be added to and become and form part of the taxes next to be assessed and
levied upon such dwelling or lands, the same to bear interest at the same rate
as taxes, and shall be collected and enforced by the same officers and in the
same manner as taxes.

���� b.��� As used in this section,
�charge� means any fee, fine, penalty, or other charge issued to a landlord,
concerning residential property leased by the landlord, pursuant to a housing,
building, or health code.

���� 9.��� This act shall take
effect immediately.

STATEMENT

���� This bill expands the
liability of certain individuals associated with limited liability companies
and other commercial entities in relation to residential properties that they
lease.

���� Specifically, the bill
provides that, in addition to retaining the ability to hold a commercial entity
itself liable for housing, building, and health code charges, and charges
issued under the "Hotel and Multiple Dwelling Law," (�HMDL�) P.L.1967,
c.76 (C.55:13A-1 et seq.), a court may hold certain members of a member-managed
limited liability company, the managers of a manager-managed limited liability
company, and the directors and officers of a corporation, jointly and severally
liable for such charges, so long as:

(1)������ there are at least three
charges concerning the property leased by the entity for residential purposes;

(2)������ at least three charges
remain unpaid on the first day of the thirteenth month following the due date
of the first charge;

(3)������ notice of the charge and
impending enforcement has been issued to the address of the record owner, the
registered agent, the managing agent, the members in the case of a limited
liability company, the directors and officers in the case of a corporation, and
each holder of a recorded mortgage and other existing lienholders, if provided
within the landlord�s registration information.� If the landlord is not
registered, in violation of section 2 of P.L.1974, c.50 (C.46:8-28), then this
notice requirement would not apply. The notice provided to an individual would
be sufficient even if the commercial entity ceases to own the property, so long
as the same individual has a role as a registered agent, managing agent,
member, manager, director, or officer of the property�s new owner;

(4)������ the individual, if a
member of a member-managed limited liability company, possesses at least a 10
percent interest in the business and

(5)������ the defendant does not
successfully assert an affirmative defense showing a lack of ability to ensure
payment of the charge.

���� Additionally, landlord
registration requirements, under section 2 of P.L.1974, c.50 (C.46:8-28),
currently require submission of the name and address of a registered agent who
may accept service of process if the landlord is a corporation.� This bill requires
a landlord organized as any other legal or commercial entity, to also submit of
the name and address of a registered agent, as well as the name and address of
the members a member-managed limited liability company who possess at least a
10 percent interest in the business, and the officers and directors in the case
of a corporation, when registering as a landlord.� Upon filing this
information, the bill requires the municipal clerk to notify the construction
official of the name and address of the record owner, and registered agent as
applicable.

���� Finally, this bill allows
municipalities to amend their housing, building, and health codes to direct
that any charge issued to a landlord for violating the code may, after serving
notice, be enforced as a lien on the property.� However, enforcement as a lien
would only be permitted if the charge remains unpaid on the first day of the
thirteenth month following the due date of the charge.