hi all. I just bought my third property but first one with a problem. I bought in a rent controlled area ( Perth Amboy Nj). The Tennant had no lease and is paying $700 a month. Which is about half of market value. The town is saying I can raise rent or evict her because it’s rent controlled. Has anyone dealt with this or have any solutions?
Specialist · Riverside, CA · Member since 2015 · 6k+ posts · 3k+ votes
8y
I'm assuming you meant the city said you CAN'T raise rent or evict. This is common, there are usually some justified reasons to get tenants out such as a major remodel or if you plan to live in the unit yourself, however you should have read the rent control rules and had a plan in place before purchasing the property. Rules vary from city to city so it is hard to help without being familiar with the area.
Rental Property Investor · Jersey City, NJ · Member since 2011 · 1k+ posts · 876 votes
8y
Are you saying you really didn't know till after closing about the rent regulations? Your attorney never brought it up? Depending on city rules there really may be nothing you can do. The "owner occupancy eviction" thing is in the ether because that's part of NYC regs, but it's not legal here in JC, and I don't believe in NJ at all. Putting the city rent regulation aside the NJ anti eviction statute by itself locks you down pretty well. You would not be able to just jack the rent or evict for no cause. Have you read the NJ DCA pamphlet "Truth in Renting"? I think you've got a big problem if you can't hold it at the current rent. There's "hardship" appeals, that would give you a rent rise to just over neutral cashflow, that may be the best you can do.
EDIT: Did some googling and ran across this sh*tshow of a court decision. It caught my eye because I knew one of the plaintiffs 20 years ago! They were trying to get their rent reduced to $150!!!
even though they don’t have a lease now?? If I am basically stuck with them should I get them to sign a lease and make it crazy strict and try to get them out that way? I’ll be speaking with an attorney tomorrow but I feel like this will be a painful lesson learned.
Rental Property Investor · Jersey City, NJ · Member since 2011 · 1k+ posts · 876 votes
8y
Yes, it looks like a painful lesson. If you read the "Truth in Renting" you'll see that any lease automatically renews as a MtM in absence of a new lease. I guess you can write whatever you want into a lease, but getting an eviction for anything but non-payment is a very hard road in NJ.
I've said this here before, when you're dealing with stuff like code violations, zoning or rent control, get an attorney specializing in that field, do not use one who does closings and thinks he knows enough about L-T law. I tried to discuss a case with an attorney who said it was part of her practice and I knew more than she did! You've already been burned by your closing attorney who didn't give you heads up about the rent control, learn from that.