Amends rent receivership statute to provide that court shall appoint receiver under certain conditions; establishes mandatory appointment requirement.

S4361

SENATE, No. 4361

STATE OF NEW JERSEY

222nd LEGISLATURE

�

INTRODUCED MAY 28, 2026

Sponsored by:

Senator� ANGELA V. MCKNIGHT

District 31 (Hudson)

SYNOPSIS

���� Amends rent receivership statute to provide that
court shall appoint receiver under certain conditions; establishes mandatory
appointment requirement.

CURRENT VERSION OF TEXT

���� As introduced.

��

An Act
concerning certain landlord-tenant actions and amending
P.L.2003, c.295.

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

���� 1.� Section 4 of P.L.2003,
c.295 (C.2A:42-117) is amended to read as follows:

���� 4.�
a.
� A summary
action or otherwise to appoint a receiver to take charge and manage a building
may be brought by a party in interest or qualified entity in the Superior Court
in the county in which the building is situated.� Any receiver so appointed
shall be under the direction and control of the court and shall have full power
over the property and may, upon appointment and subject to the provisions of
P.L.2003, c.295 (C.2A:42-114 et al.), commence and maintain proceedings for the
conservation, protection or disposal of the building, or any part thereof, as
the court may deem proper.�

����
b.
� A
[
building shall
be eligible for receivership if it
]

court shall appoint a receiver for a building if the building
meets one
of the following criteria:

����
[
a.
]
�
(1)
� The building is in
violation of any State or municipal code to such an extent as to endanger the
health and safety of the tenants as of the date of the filing of the complaint
with the court, and the violation or violations have persisted, unabated, for
at least 90 days preceding the date of the filing of the complaint with the
court; or

����
[
b.
]
�
(2)
�The building is the
site of a clear and convincing pattern of recurrent code violations, which may
be shown by proofs that the building has been cited for such violations at
least four separate times within the 12 months preceding the date of the filing
of the complaint with the court, or six separate times in the two years prior
to the date of the filing of the complaint with the court and the owner has
failed to take action as set forth in section 9 of P.L.2003, c.295
(C.2A:42-122).

����
c.
� A court, upon
determining that the conditions set forth in
[
subsection
a. or
]

paragraph (1) or (2) of subsection
b. of this section exist,
[
based upon
evidence provided by the plaintiff,
]

shall appoint a receiver, with such powers as are herein authorized or which,
in the court's determination, are necessary to remove or remedy the condition
or conditions that are a serious threat to the life, health or safety of the
building's tenants or occupants.

(cf: P.L.2003, c.295, s.4)

���� 2.� Section 9 of P.L.2003,
c.295 (C.2A:42-122) is amended to read as follows:

���� 9.� a.� If the owner opposes
the relief sought in the complaint brought under subsection b. of section 4 of
P.L.2003, c.295 (C.2A:42-117) and demonstrates by a preponderance of the
evidence that repairs were made in timely fashion to each of the violations
cited, that the repairs were made to an appropriate standard of workmanship and
materials, and that the overall level of maintenance and provision of services
to the building is of adequate standard,
notwithstanding any provision of P.L.2003,
c.295 (C.2A:42-114 et al.) to the contrary,
the court may dismiss the
complaint.

���� b.� If the complaint is
brought by a tenant of the building which is the subject of the complaint and
that tenant is in default of any material obligation under New Jersey
landlord-tenant law, the court may dismiss the complaint.

���� c.� If the court finds that
the preponderance of the violations that are the basis of a complaint brought
under subsection b. of section 4 of P.L.2003, c.295 (C.2A:42-117) are of a
minor nature and do not impair the health, safety or general welfare of the
tenants or neighbors of the property, the court may dismiss the complaint.

���� d.� Within 10 days of filing
the complaint, the plaintiff shall file a notice of lis pendens with the county
recording officer of the county within which the building is located.

(cf: P.L.2003, c.295, s.9)

���� 3.� Section 10 of P.L.2003,
c.295 (C.2A:42-123) is amended to read as follows:

���� 10.� a.� If the court
determines, after its summary hearing
pursuant to section 4 of P.L.2003,
c.295 (C.2A:42-117)
, that the grounds for relief set forth pursuant to
section 5 of P.L.2003, c.295 (C.2A:42-118) have been established, the court
[
may
]

shall

appoint a receiver and grant such other relief as may be determined to be
necessary and appropriate. The court shall select as the receiver the
mortgageholder, lienholder or a qualified entity, as defined pursuant to
section 3 of P.L.2003, c.295 (C.2A:42-116).� If the court cannot identify a
receiver, the court
[
may
]

shall

appoint any party who, in the judgment of the court, may not have registered
with the department pursuant to section 31 of P.L.2003, c.295 (C.2A:42-142),
but otherwise fulfills the qualifications of a qualified entity.

���� b.�
[
If
]

Notwithstanding any provision
of P.L.2003, c.295 (C.2A:42-114 et al.) to the contrary, if
the court
determines, after its summary hearing, that the grounds for relief set forth
pursuant to section 5 of P.L.2003, c.295 (C.2A:42-118) have been established,
but the owner presents a plan in writing to the court demonstrating that the
conditions leading to the filing of the complaint will be abated within a
reasonable period, which plan is found by the court to be reasonable, then the
court may enter an order providing that in the event the conditions are not
abated by a specific date, including the completion of specific remedial
activities by specific dates, or if the conditions recur within a specific
period established by the court, then an order granting the relief as requested
in the complaint shall be granted.

���� The court may require the
owner to post a bond in such amount that the court, in consultation with the
party bringing the complaint and the public officer, determines to be
reasonable, which shall be forfeit if the owner fails to meet the conditions of
the order.

���� c.� Any sums advanced or
incurred by a mortgage holder or lienholder acting as receiver pursuant to this
section for the purpose of making improvements to the property, including court
costs and reasonable attorneys fees, may be added to the unpaid balance due
said mortgage holder or lienholder subject to interest at the same rate set
forth in the note or security agreement.

���� d.� Nothing in this section
shall be deemed to relieve the owner of the building of any obligation the
owner or any other person may have for the payment of taxes or other municipal
liens and charges, or mortgages or liens to any party, whether those taxes,
charges or liens are incurred before or after the appointment of the receiver.

���� e.� The appointment of a
receiver shall not suspend any obligation the owner may have as of the date of
the appointment of the receiver for payment of any operating or maintenance
expense associated with the building, whether or not billed at the time of
appointment.� Any such expenses incurred after the appointment of the receiver
shall be the responsibility of the receiver.

(cf: P.L.2003, c.295, s.10)

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

STATEMENT

���� This bill amends the rent
receivership statute to require the court to appoint a receiver under certain
conditions.

���� Under current law, a tenant or
a housing inspector may file a complaint seeking repairs of property. The
statute provides that, based on evidence provided by the plaintiff, a building
�shall be eligible for� rent receivership upon a determination by the court that
the building is in violation of housing codes so as to endanger health or
safety or is the site of a clear and convincing pattern of recurrent code
violations. However, other statutory language states that the court �shall�
order a rent receivership in the same circumstances. Under a receivership, the
tenants deposit their rent monies with a court-appointed administrator. These
monies are used to make the repairs under the supervision of the administrator.

���� This bill would amend current
law to provide that the court �shall appoint a receiver� under these
conditions, with limited exception. The bill also deletes the language
concerning �evidence provided by the plaintiff.� The intent of this deletion is
to clarify that the court is not restricted to considering only the plaintiff�s
evidence when determining whether to appoint a receiver.

���� Under the bill, the court
would be required to appoint a receiver upon a determination that a building is
in violation of housing codes so as to endanger health or safety or the
building is the site of a clear and convincing pattern of recurrent code
violations.� If the court cannot identify a receiver, the court would be
required to appoint an alternative qualified party.

���� The bill relates to a
recommendation by the New Jersey Law Revision Commission, �Final Report
Concerning the Interpretation of N.J.S.2A:42-117 of New Jersey�s Receivership
Act,� issued October 20, 2022. �