I ran across this trying to help someone in another thread. It's a very interesting NJ Appellate Court decision that says that in an appeal of low controlled rents "fair return on equity" does not relate to your actual cash investment, but to the value of the property. This is a little weird in that the value of a commercial, rent controlled property is largely dictated by it's low rents!
The case involved property that was inherited and had no loan, so there was no cash investment.
While the Jersey City ordinance establishes what constitutes a fair return when a landlord has made an investment in rental property, the ordinance does not provide how a landlord is to realize a fair return when no investment has been made.4 However, consistent with Hutton, the ordinance must be read as though it does permit a landlord under these circumstances to realize a fair return on property.
What was really a riot was that the tenants were trying to reduce their rents already under $500 down to $150! I actually knew one of them 20 years ago, burned me for a few hundred bucks.
@Johann Jells Very interesting information. Thanks for sharing. I'm surprised the JC board initially sided in favor of the landlord's hardship application to begin with.
Glad you too found it interesting @Kevin K. . Yes, the whole thing is fascinating, and not the "if you can't make money owning the building, tough" attitude we thought the city would have. The case appears to invalidate the whole idea of ridiculously undermarket rent control. I wish I knew what the implication of the case's "unpublished" status was. DOes that mean it's not a valid precedent? Combined with the 2 year statute of limitations on appealing overcharges, it seems JC rent control has far less teeth than it once did.