The owners of The Bexley in Hoboken are challenging the ruling by the city’s rent leveling and stabilization board to eliminate the building’s rent control exemption.
By John Heinis/Hudson County View
Clinton Grand Property LLC, who owns The Bexley at 1300 Clinton St. and 1313 Grand St., filed a four-court lawsuit in Hudson County Superior Court one week ago noting that they have been exempt from rent control since 2000 under state law.
Tenant Sergio Gallo asked for legal rent calculation from the city’s rent regulation officer, which was denied, and he then appealed that decision to the rent board. The court filing indicates they subsequently took a vote to eliminate rent control for the entire building.
“The Board’s votes and subsequent Resolution are fatally defective in several ways: The Board’s Resolution exceeds the authority granted to the Board by the Hoboken Rent Control Ordinance, which does not grant authority for the Board to override the exemption in the State Exemption Law,” write lawyers Charles Korschun and Julia Browning, of Gibbons P.C.
” … The Hoboken Rent Control Ordinance creates additional conditions for maintaining rent control that are not included in the State Exemption Law. Because this portion of the Ordinance is unlawful, the Board’s decisions based on it are likewise unlawful and void.”
The lawsuit continues that the board voted 2-0(3) to strip The Bexley of its rent control exemption, therefore they memorialized a defective resolution.
Counsel for the plaintiff also contends that at lease one voting commissioner, the one who chaired the meeting, had a conflict of interest that should have prevented her from voting.
The hearing, held on March 27th of this year, was chaired by Commissioner Jenny Labendz, the vice chair of the volunteer governing body, since Chair Rafi Cordova was absent.
“At the hearing, Tenant argued that his unit was not exempt from rent control because the Building allegedly had not provided a specific form of written notice to Tenant of the exemption status in his first two leases, prior to including more specific written notice in his current lease,” the lawsuit says.
“Specifically, Tenant argued that his 2021 and 2022 leases did not contain proper notice to tenants such that the Building, including his unit …Tenant did not make any claims or present any arguments regarding units other than his own.”
Additionally, counsel for the building argued that the Owner substantially complied with the Hoboken Rent Control Ordinance because there was “sufficient evidence put in those leases to allow the tenant to know that the building may or may not be subject to rent control. So it would at least . . . put the tenant on notice of the rent control issues.”
The argument was also made that since the tenant’s current lease had the notice of exemption included, the tenant had waived any claims related to prior leases.
Prior to the vote, LaBenz said the board would be determining if the entire building was subject to rent control, despite the fact that this is not what the application before them sought, according to the legal document for the case.
Despite an objection from counsel for The Bexley, the board voted on the matter and the vote was 2-0(3), with Labendz and Commissioner Jesse Rosso voting yes. Commissioners Heath Urban, Deborah Komarow, and Migdalia Pagan-Milano abstained.
“Commissioner Pagan-Milano abstained from the vote and stated that ‘my opinion is that I feel like we addressed the case at hand [Tenant’s individual appeal on his individual unit] and I’m ready to move on’ and ‘I’m not ready to vote,’ the lawsuit highlights.
“Commissioner Komarow also abstained from the vote because the Board need only ‘handle the case before us.’ Ultimately, the vote was considered by the Board to have passed, despite the comments from the abstaining commissioners and Commissioner Rosso’s comment that he ‘thought abstains were no.'”
The building owner sent a letter to the board on April 22nd asking them to reconsider their decision and it was around that time he became aware that Labendz runs a Facebook group called “Hoboken Renters,” which advocates for the application of rent control for tenants.
“Organizing a group to advocate against interests of a party before the Board on the
issue before the Board, and writing articles advocating for a pre-determined outcome on an issue that regularly comes before the Board, require recusal under the New Jersey Local Government Ethics Law,” the court filing contends.
“Because Vice Chair Labendz did not recuse herself, her participation and voting irreparably tainted the proceedings.”
As a result, The Bexley is asking the court to declare the resolution invalid, reverse the ruling that rent control exemption no longer applies, award attorneys’ fees and costs of suit, along with any other relief they deem just and equitable.
A city spokeswoman declined to comment on the litigation.
AvalonBay sued the city and the rent leveling board back in January over the status of their rent control exemption, as HCV first reported.
