ASSEMBLY HOUSING COMMITTEE
ASSEMBLY, No. 4617
with committee amendments
STATE OF NEW JERSEY
DATED: DECEMBER 7, 2020
The Assembly Housing Committee reports favorably and with committee amendments Assembly Bill No. 4617.
As amended by the committee, this bill would establish the “Landlord Emergency Compensation Program” as a program in the Department of Community Affairs (“DCA”). The bill would allow eligible landlords to apply for assistance, in the form of financial compensation, during an “assistance period” in the time of the Coronavirus pandemic. The bill defines the assistance period as the period beginning April 1, 2020 and ending two months following the end of the public health emergency declared in Executive Order No. 103.
The bill authorizes a landlord to apply for assistance payments to compensate for the portions of unpaid rent, due during the assistance period, that a landlord’s residential tenants have owed, but have not paid. The program would only provide assistance payments to a landlord to the extent that this compensation is necessary to allow the landlord to cover the housing costs of the landlord’s residential rental units when combined with the rental payments that the landlord has received. The bill defines “housing costs” as mortgage principal and interest payments, property taxes, homeowner and private mortgage insurance, condominium or common interest community fees, reasonable maintenance costs, and anticipated maintenance cost increases, applicable to landlords with tenants who have applied security deposit funds against rent in accordance with Executive Order No. 128 of 2020.
The program would not provide assistance to a landlord for: (1) housing costs that, prior to March 9, 2020, the landlord had anticipated covering through funding sources other than rent payments; or (2) housing costs for which the landlord has obtained compensation, or has an outstanding application for compensation, through a different program that DCA has determined to preempt the landlord from eligibility.
The bill requires DCA to limit eligibility for assistance payments to landlords who have no pending criminal charges, and who have recently been in substantial compliance with building code, housing code, tax payment, and other basic responsibilities.
The program would begin accepting applications as soon as possible following enactment of this bill. To address circumstances in which a landlord applies for assistance prior to the conclusion of the assistance period, and the landlord’s tenants miss one or more rent payments after submission of the program application, the bill would not prohibit DCA from accepting additional program applications from the same landlord. The bill authorizes DCA to prioritize program application approval based on the financial need of the landlord as determined appropriate.
The bill directs that program applications would be required to state the total amount of rent due for the rental unit as established in the lease, the amount paid by the tenant or third parties, if any, the amount unpaid, the landlord’s housing costs, and any other information required by DCA.
The bill would require an application to be accompanied by a form completed by the tenants of the landlord’s rental units endorsing the application, and including the number of occupants of the unit, and any additional information required by DCA. If the tenant is unwilling to complete the form despite a diligent effort by the landlord, the landlord may attach to the application a certification setting forth: (1) the landlord’s efforts to obtain tenant endorsement; (2) the number of occupants in the rental unit, and (3) any additional information required by DCA.
The bill requires that the assistance payment, once accepted by a landlord, would be a full settlement of rent due for the landlord’s residential tenants during the period both within the assistance period and prior to submission of the program application. By accepting an assistance payment, the landlord would also waive any late fees charged to residential tenants as a result of rent nonpayment in that time. A landlord receiving assistance or awaiting DCA’s response to a program application would be prohibited from initiating an eviction proceeding, or completing a previously-initiated eviction proceeding, for any unpaid rent balances owed for rent due during that time. Upon the provision of an assistance payment, the bill would require the commissioner to also notify the landlord’s tenants of the protections provided to them as a consequence of the landlord’s assistance payment. A landlord would be prohibited from accepting a delinquent rent payment from a tenant if it has been covered by an assistance payment. A landlord initiating an eviction action for balances due during the assistance period would be required to provide documentation on a form to be prepared and adopted by the Administrative Director of the Courts that they are not prohibited from initiating the action by any provision of the bill.
As soon as practicable following enactment, the bill directs DCA to prepare and make available, on its Internet website, information for landlords on: (1) when assistance applications will be available, (2) the necessary steps for application submission, (3) how to obtain help in application completion, and (4) other matters related to assistance applications that DCA deems necessary. This information would be made available in English, Spanish, and any other languages determined necessary. Once assistance applications are made available, DCA would provide for the establishment and maintenance of a toll-free telephone hotline available, at a minimum, weekdays between 8:30 a.m. and 5:30 p.m. through which a landlord may ask questions and obtain help in application completion.
Under the bill, if a landlord has submitted a program application, but has not yet obtained an assistance payment, or a denial of assistance, the landlord would be authorized to assert an affirmative defense to a foreclosure action initiated against any residential rental property owned by the landlord. This protection, however, would exclusively apply to a landlord whose principal residence is in the State and who, together with immediate family members, partners, or other related entities, owns no more than 50 rental units in the State.
An intentional misrepresentation by a landlord of any information to obtain an assistance payment would constitute a crime of the fourth degree under the bill, in addition to other applicable penalties. A crime of the fourth degree is ordinarily punishable by a term of imprisonment of up to 18 months or a fine of up to $10,000, or both.
Finally, the bill would appropriate $300 million from the funds provided to the State by the federal government under the “Coronavirus Aid, Relief, and Economic Security (“CARES”) Act” for assistance under the program established by the bill, of which no more than $1,500,000 would be used by the DCA to defray the administrative costs of the program. However, in the event that the $300 million is not available through the CARES Act, then the remainder would be appropriated from other federal funding available for coronavirus relief as it becomes available.
The committee amendments would:
· provide that, as defined in the bill, the “assistance period” would conclude two months following the end of the public health emergency declared pursuant to Executive Order No. 103 of 2020;
· revise the “housing costs” definition to include anticipated maintenance cost increases, applicable to landlords with tenants who have applied security deposit funds against rent pursuant to Executive Order 128 of 2020;
· clarify what landlords are prohibited from obtaining assistance due to already obtaining other forms of assistance, noncompliance with tax payment responsibilities, pending criminal charges, or noncompliance with applicable regulations;
· reserve a portion of funding for landlords who own and rent no more than two housing units;
· require DCA, upon the provision of assistance, to notify the landlord’s tenants of the protections provided to them as a consequence of the landlord’s receipt of assistance;
· specify efforts to be undertaken by DCA to enhance awareness and ease-of-engagement with the program; and
· make technical changes to the bill.