Another Hoboken building owner sues rent leveling board & city over rent control exemption

Another Hoboken building owner is suing the local rent leveling and stabilization board, as well as the city, over a decision that says they are no longer rent control exempt, which they say “was arbitrary, capricious and wrong as a matter of law.”

By John Heinis/Hudson County View

TCD/URSA Hoboken Sales Center LLC, who own 1125 Jefferson St., filed a two-count lawsuit in Hudson County Superior Court on Friday challenges a July 24th decision by the rent leveling board that revoked the entire building’s rent control exemption.

“Implementation of the Board’s Resolution subjecting the entire building to rent control will cause the Owner irreparable harm impacting the Owner’s operating budget by substantially reducing revenues, depriving the Owner its reasonable investment backed expectations while causing uncertainty among the Owner and tenants regarding renewal leases,” the lawsuit says.

“The City and Board are preempted from taking any action that limits, diminishes, alters or impairs an exemption afforded under the Rent Control Exemption Law and as such, the City may not impose additional requirements to qualify for exemption and the Board may not determine whether a property qualifies for exemption.”

Furthermore, the court filing, where the LLC is represented by Richard P. DeAngelis, Jr., a partner at  JerseyCity-based law firm Connell Foley, contends that the action goes against the State Rent Control Exemption Law.

“The Board’s action declaring 1125 Jefferson is not exempt from local rent control has caused irreparable harm to the Owner in interfering with its contractual relationships with tenants, reducing revenues, and devaluing its Property for which money damages are not available.”

Tenants from four of the 54 units of the building submitted a request for a legal rent calculation to the rent regulation officer, to which the response said that the building was not subject to rent control, the lawsuit claims.

As a result, the property asserted that the leases for all four of the tenants in question said the building was exempt from rent control, while there is also no state statute to deny or terminate an exemption.

“After hearing from the tenants and Owner’s counsel, and discussion among Board Members, and guidance from the Board attorney that the statutory exemption applies to the multiple dwelling and not individual units the Board decided to proceed and
the Acting Chairperson, Jenny Labendz framed the matter as an ‘appeal . . . to recognize
building isn’t subject to rent control,'” the court filing notes.

The board approved that resolution unanimously and it was memorialized on September 11th.

According to the lawsuit, the building owner sent a letter to the board on October 9th asking for reconsideration due to stay issued in Hudson County Superior Court in a separate but similar case which highlights a possible issue with the proceedings.

” …. A potential conflict of interest by the Board’s Vice Chair, Jenny Labendz – who presided over the 1125 Jefferson matter as Acting Chair – upon learning she had recused herself in another matter due to her advocacy on behalf of renters, particularly with regard to the applicability of the Exemption Law,” counsel for the plaintiffs wrote.

“Along with its October 9 request for reconsideration, the Owner again asked the Board to refrain from taking any further action until the underlying legal issue are decided by a court.”

Although a request for reconsideration was placed on the board’s October 23rd agenda, they took no action, indicating no such procedure existed.

“Subjecting the entire building to rent control will cause the Owner irreparable harm impacting the Owner’s operating budget by substantially reducing revenues,” the court filing concludes.

“Denying the statutory exemption in place since 2015 will cause the Owner irreparable harm by depriving its reasonable investment backed expectations when acquiring a
property subject to an exemption provided under State law from local rent control through October 2045.”

The plaintiff is alleging the decision was arbitrary, capricious, and unreasonable, and therefore seeking to render the board’s decision null and void.

Additionally, the plaintiff is seeking a ruling where both the board and the rent regulation officer are prevented from taking any further action against them, as well as awarding attorneys’ fees and costs and any relief the court deems just and equitable.

This is at least the fourth time the Hoboken rent leveling board has been sued this year.

AvalonBay filed suit in January after their rent control exemption was lifted, the same reason the Bexley building owners took their case to court in June, while 334 Hudson St. went to court in August over their rental hike being denied.

A city spokeswoman did not return an email seeking comment, though the city typically does not comment on pending litigation.