ASSEMBLY, No. 4924

STATE OF NEW JERSEY

219th LEGISLATURE

 

INTRODUCED NOVEMBER 5, 2020

 


 

Sponsored by:

Assemblyman  BRIAN BERGEN

District 25 (Morris and Somerset)

Assemblywoman  LINDA S. CARTER

District 22 (Middlesex, Somerset and Union)

Assemblywoman  SERENA DIMASO

District 13 (Monmouth)

 

Co-Sponsored by:

Assemblymen McClellan, Simonsen, Assemblywoman Reynolds-Jackson, Assemblyman S.Kean and Assemblywoman Chaparro

 

 

 

 

SYNOPSIS

     Establishes assistance program to assist landlords of one- and two-family dwellings during COVID-19 pandemic; appropriates $50 million.

 

CURRENT VERSION OF TEXT

     As introduced.

  


An Act establishing an assistance program for certain landlords in response to the COVID-19 pandemic and making an appropriation.

 

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

 

     1.    As used in P.L.    , c.    (pending before the Legislature as this bill):

     “Assistance” means compensation for unpaid rent, provided by the program.

     “Assistance period” means the period beginning April 1, 2020 and ending on the first day of the seventh month next following the public health emergency declared pursuant to Executive Order No. 103 of 2020.

     “Commissioner” means the Commissioner of Community Affairs.

     “COVID-19” means the coronavirus disease 2019, as announced by the World Health Organization on February 11, 2020.

     “Department” means the Department of Community Affairs.

     “Household income” means the gross income of an impacted tenant household for calendar year 2019, or for January 1, 2020 through June 30, 2020 multiplied by two, whichever is lower.

     “Housing costs” means mortgage principal and interest payments, property taxes, homeowner and private mortgage insurance, condominium or common interest community fees, and reasonable maintenance costs, as applicable, paid by a landlord for the landlord’s residential rental units.

     “Impacted tenant”  means a residential tenant who has suffered a substantial reduction of income resulting from COVID-19 or the public health emergency declared pursuant to Executive Order No. 103 of 2020, including from a reduction in hours or loss of employment, or increased costs incurred in necessary child care resulting from the closure of schools or caring for family members who are ill due to COVID-19 or quarantined due to a suspected exposure to COVID-19, or for funeral costs due to COVID-19.

     “Landlord” means the owner of a one- or two-unit residential rental property.

     “Program” means the “One- and Two-Unit Landlord Emergency Assistance Program” established by section 2 of P.L.    , c.    (pending before the Legislature as this bill).

     “Program application” means an application for assistance through the program.

 

     2.    a.  There is established in the department the “One- and Two-Unit Landlord Emergency Assistance Program” to provide assistance to a landlord of a one- or two-unit residential rental property to compensate for the portions of unpaid rent, due during the assistance period, that any impacted tenant of the landlord owed the landlord, but has not paid, to the extent that this compensation is necessary to allow the landlord to cover the landlord’s housing costs.

     b.    The program shall not provide assistance to a landlord for housing costs: (1) that, prior to March 9, 2020, the landlord had anticipated covering through funding sources other than rent payments; or (2) for which the landlord has obtained compensation, or has an outstanding application for compensation, through a different program that, as determined by the commissioner, provides the landlord similar assistance payments.

     c.     A landlord shall not be entitled to assistance through the program if: (1) the rental property is not registered with the municipality in which it is located in accordance with the requirements of section 2 of P.L.1974, c.50 (C.46:8-28); or (2) the landlord is not current on all State and local tax obligations.

     d.    A landlord shall apply for assistance through the program by submitting a program application to the department.  The department shall prepare program application forms, application guidelines, and informational materials necessary for landlords to complete a program application, and shall post these materials on the Internet website of the department within 30 days of the effective date of P.L.    , c.    (pending before the Legislature as this bill).

     e.     If a landlord applies for assistance prior to the conclusion of the assistance period, and an impacted tenant of the landlord misses one or more rent payments after submission of the program application, then the landlord may apply to the department for one or more additional assistance payments on a quarterly basis through the conclusion of the assistance period.  The department may adjust this application schedule as deemed appropriate by the commissioner.  The department may prioritize program application approval based on the financial need of the landlord, as determined appropriate by the commissioner.

 

     3.    a.  A program application shall include: (1) the total amount of rent due from a landlord’s impacted tenant established in the corresponding lease; (2) the amount paid by the impacted tenant or a third party, if any; (3) the amount unpaid; (4) the landlord’s housing costs; and (5) any other information required by the department.

     b.    A program application shall be accompanied by a form completed by the impacted tenant of each of the landlord’s rental units endorsing the application, which shall include: (1) the number of occupants of the unit; (2) a sworn statement of the impacted tenant household’s income; and (3) and any additional information required by the department.

     c.     If the impacted tenant of a rental unit is unwilling to complete the form required in subsection b. of this section notwithstanding diligent effort by the landlord, the landlord may attach to the application a certification in such form as shall be determined by the department setting forth: (1) the landlord’s efforts to obtain the impacted tenant’s endorsement; (2) the household income of the impacted tenant, to the best of the landlord’s knowledge; (3) the number of occupants in the rental unit; and (4) any additional information required by the department.

 

     4.    a.  An assistance payment, once accepted by a landlord, shall be a full settlement of rent due for the landlord’s impacted tenant during the assistance period.  By accepting an assistance payment, the landlord also shall waive any late or other fees charged to the impacted tenant as a result of the nonpayment of rent during the assistance period.  The acceptance of the assistance payment shall constitute a settlement of these costs even though the landlord may not be fully compensated through the assistance payment.

     b.    A landlord shall not accept a delinquent rent payment from an impacted tenant if the rent payment has been covered by an assistance payment.

     c.     A landlord receiving assistance or awaiting the department’s response to a program application, shall not initiate an eviction proceeding, or complete a previously-initiated eviction proceeding, for any unpaid rent balances, or late or other fees, owed by an impacted tenant for rent due during the assistance period.

     d.    A landlord initiating an eviction action for any unpaid rent balances that were due during the assistance period shall provide documentation, on a form to be prepared and adopted by the Administrative Director of the Courts, demonstrating that the landlord is not prohibited from initiating the action by any provision of P.L.    , c.    (pending before the Legislature as this bill).

 

     5.    If a landlord has submitted a program application to the department, but has not yet obtained an assistance payment, or a denial of an assistance payment, the landlord may assert an affirmative defense to a foreclosure action initiated against any residential rental property owned by the landlord.  This section shall 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.

 

     6.    An intentional misrepresentation by a landlord of any information to obtain an assistance payment, or a delinquent rent payment in contravention of subsection b. of section 4, shall constitute a crime of the fourth degree.

     7.    There is appropriated to the department the sum of $50,000,000 from the General Fund and, to the extent available, funds provided to the State by the federal government under the “Coronavirus Aid, Relief, and Economic Security Act,” Pub. Law 116-136, for the provision of assistance under the program.  Up to two percent of the amount appropriated by this section may be used by the department to defray the administrative costs of the program.

 

     8.    This act shall take effect immediately.

 

 

STATEMENT

 

     This bill would establish the “One- and Two-Unit Landlord Emergency Assistance Program.”  The program would be established in the Department of Community Affairs (DCA).  Under the program, landlords of one- and two-family residential rental properties could apply for assistance to cover their housing costs during an “assistance period.”  The assistance period is defined in the bill as the period beginning April 1, 2020 and ending on the first day of the seventh month following the end of the public health emergency declared in Executive Order No, 103 in response to the COVID-19 pandemic.

     The bill authorizes a landlord to apply for assistance payments to compensate for the portions of unpaid rent, due during the assistance period, that any “impacted tenant” has owed, but not paid.  The bill defines an “impacted tenant” as a residential tenant who has suffered a substantial reduction of income resulting from COVID-19 or the public health emergency declared pursuant to Executive Order No. 103 of 2020.  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 program would not provide assistance to a landlord for housing costs: (1) that, prior to March 9, 2020, the landlord had anticipated covering through funding sources other than rent payments; or (2) for which the landlord has obtained compensation, or has an outstanding application for compensation, through a different program that, as determined by the commissioner, provides the landlord similar assistance payments..  A landlord would not be eligible for assistance through the program if: (1) the rental property is not registered with the municipality in which it is located in accordance with the requirements of section 2 of P.L.1974, c.50 (C.46:8-28); or (2) the landlord is not current on all State and local tax obligations.

     DCA would be required to prepare program application forms, application guidelines, and informational materials necessary for landlords to complete a program application, and to post these materials on its Internet website within 30 days of the bill’s effective date.  DCA would be permitted to prioritize program application approval based on the financial need of the landlord.

     The bill requires that an assistance payment, once accepted by a landlord, would be a full settlement of rent due for the landlord’s impacted tenants.  By accepting an assistance payment, a landlord also would be required to waive any late or other fees charged to the impacted tenant as a result of the nonpayment of rent during the assistance period.  A landlord would be prohibited from accepting a delinquent rent payment from an impacted tenant if the rent payment has been covered by an assistance payment.  In addition, 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, or late or other fees, owed by an impacted tenant for rent due during the assistance period.  A landlord initiating an eviction action for any unpaid rent balances that were due during the assistance period would have to provide documentation showing that the landlord is not prohibited from initiating the action by any provision of the bill.

     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, or a delinquent rent payment following receipt of an assistance payment, would constitute a crime of the fourth degree under the bill.  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.

     Lastly, the bill appropriates to DCA $50,000,000 from the General Fund and, to the extent available, funds provided to the State by the federal government under the “Coronavirus Aid, Relief, and Economic Security Act,” for the provision of assistance under the program.  Up to two percent of that amount may be used by DCA to defray the administrative costs of the program.