The Clock is Ticking: Rent Control Statutes of Limitations & Repose
Northern New Jersey cities like Hoboken and Jersey City maintain sophisticated rent control ordinances. Rent control ordinances are designed to provide landlord's a "fair" return on investment while keeping urban housing rents affordable. When a tenant is charged an illegal rent (a rent in excess of what rent control ordinance provides) most ordinances require a landlord to give the tenant a credit towards future rent. The credit is the amount of the overcharge per month for as many months as the tenant was overcharged. But, the time length of the overcharge is not unlimited. Jersey City and Hoboken have two very different approaches to determining the amount of a rent control overcharge. The distinction lies in the difference between a statute of limitation and a statute of repose.
Statutes of limitation and repose limit the time someone has to make a claim. Generally speaking, a statute of limitation is less harsh than a statute of repose. A statute of limitation runs from the time an injury happens or is discovered. In Jersey City, the rent control ordinance provides that a tenant's credit should be limited to a two year time period. This time period is subject to the tenant's "discovery" that she's been overcharged. So, while the calendar may show that the tenant has been paying an overcharge for more than two years, the two year clock only starts running when the tenant discovers that the rent is illegal. The burden is on the tenant to show when the overcharge was discovered.
Jersey City's rent control ordinance requires that a tenant ask the Rent Control Board to "waive" the statute of limitation if she wants a refund for more than two years of overcharge. The critical point in securing this "waiver" is showing when, if at all, the tenant was provided the rental statement required by the ordinance. The rental statement tells the tenant what the prior tenant's legal rent is. Once the tenant sees the rental statement the opportunity to question the legality of the current rent arises. At this point, the two year statute starts running. If a tenant never gets the rental statement, it's a totally different story.
Hoboken has a much different approach. Hoboken has both a two year statute of limitation and a two year statute of repose. This means that a tenant's credit is limited to years from when the rental statement is served (much like Jersey City) but in no case can a tenant collect more than two years. In other words, Hoboken's rent control ordinance does not provide for a waiver in any circumstance. This statute of repose starts running the moment a tenant pays an overcharge rather than when a tenant discovers an overcharge.
Both Jersey City and Hoboken require that landlords provide tenant rental statements alerting them to the legal rent for the unit. While each city treats the timing from disclosure differently, they both require that landlords affirmatively inform the tenant of what the legal rent is. Landlords and tenants should be aware of what their city's rent control ordinance requires.Any tenant who pays an illegal rent has a potential claim under the New Jersey Consumer Fraud Act. As a prior post explained, a rent control overcharge can entitle a tenant to triple damages and attorney's fees.
Since the facts of each circumstance vary, a landlord or tenant should consult an attorney with his/her specific circumstances. The Major Law Firm practices landlord tenant law throughout New York and New Jersey assisting tenants in avoiding unnecessary and costly delays. The firm's geographic practice area includes: New York City (Manhattan, New York County, Brooklyn, Kings County, Queens, Queens County, Bronx County, Staten Island, Richmond County) and New Jersey (Jersey City, Hoboken, Bayonne, Hudson County, Newark, Essex County, Woodbridge, Middlesex County, Paterson, Passaic County). The Firm invites you to visit the "Promises" page for our new way of doing business