Hudson County Rent Controls - Any Local Attorneys to Help?
Hi everyone - hopefully a local attorney is reading this, if so please message me as I'd love to hop on a call or meet for coffee to discuss (I'm also looking to find a great attorney to add to my team!).
I've been trying to figure out the rent ordinances in all of the cities I'm looking to invest in in Hudson County (West New York, Jersey City, North Bergen, Weehawken, Union City).
I've been able to look up all of the documents that spell out all of the legal terms for rent ordinances and they all seem to be pretty close to the same stipulations, with some, small differences here and there, but 1 thing is not specifically spelled out (at least that i can see), relating to marking the rent to market rates.
From what I see, generally, if you purchase a triplex and owner occupy 1 of the units, you are able to increase the rent on all units to market after you are able to get any inherited tenants out.
My question is, if I were to buy a property as a straight investment property (without owner occupying), assuming the property is delivered vacant (or inherited tenants are out shortly after closing), am I able to make the rent to market for future tenants? Or am I limited to the increasing the rents 2% (or whatever the cost of living index currently is) on what the previous tenant was paying (which is essentially what was previously reported to town hall)?
Thank you in advance - Not looking for free legal advice at all, just want to make sure I understand the local laws correctly, because a lot of the deals I'm seeing in this area can't even come close to cash flowing unless you are able to mark the rent to market.
Justin
Contact John Salierno he knows the laws well.
@Justin McElroy I've read the same ordinances. What you're talking about is vacancy de-control. Almost none of the municipalities in Hudson County have it. Bayonne, I think, is the only one with vacancy de-control. I'm not sure about owner occupied properties but I'm pretty sure you can't just rent at any price in those cases. Each town is different when it comes to what properties are eligible for rent control. The # of unit threshold varies town by town for owner occupied properties also. One thing to confirm is if a prior owner has ever registered rents. If they haven't, then that's good. You can then register at the rent you end up getting once leased. Honestly, the ordinances are so complicated that none of the towns are able to enforce them down to the exact legal language that's in the ordinances (i.e. all of them say that the starting base rent in the year in which the ordinance is implemented became the starting point for all future increases...try to prove what the rent was in 1970 for a specific apartment that was never registered!). Add in the complexities of service charges vs capital improvements, CPI rates at various points in time, etc. and the paperwork and effort to track it all gets worse.
Like @Kevin K. says, your best bet is to determine the status of the property you end up purchasing, most in Hudson County are rent regulated unless owner occupied (under 3 units), 4 units and above are generally rent regulated regardless.
The towns have some different regulations, with Hoboken probably being the strictest overall in Hudson County. You need to check each of those town individually, and some (like Weehawken) won't actually truly give you a straight answer.
And if you see any deals that are cash flow positive in those towns dig deeper because I am an agent working those areas and can tell you that barely a 5% cap rate can be found here. They come up here and there, but not many.
@Justin McElroy did you get any further info about this topic? I'm currently looking at a small multi in the area which is has rents registered with the town and so I would love to know some options to bringing the rents to markets. The home is currently owned by an investor who is 1031'ing and they had the luck that one of their tenants moved out out, they were able to rehab the unit, and increase the rents.
My understanding so far is that you can mark the rents to market if the tenant moves out ("willingly", of course). For month-to-month tenants, though, I'm not entirely sure what a non-occupying investor could do.
If you spoke with a local attorney, would you mind PM'ing me their info? Or happy for us to connect over a quick call / coffee as well. Thanks!
Hey @Kunal Kapur
I unfortunately wasn't able to connect with anyone who could give me an indefinite answer, but I was able to do some research myself. Each town has their rent control ordinances online that you can read through (although, they're usually not very clear).
Here is a link to my google drive folder where I keep all of these files: https://drive.google.com/drive/folders/1IB5PV0I_KK...
I don't have Hoboken in there, just because I'm not interested in investing there, but a simple google search for "hoboken rent control" should pretty much bring you right to their ordinance write up.
All of the towns in the area are pretty similar, where only owner occupied properties have the ability to mark the rent to whatever they'd like. If it is not owner occupied and the rent has been recorded with the town in the past, then you are kind of tied down to increases on the rents that were previously reported. The increase is usually based on the annual ECI, although Guttenberg just made it a flat 3% recently (with some exceptions).
Some exceptions to be able to mark the rent to market, is if there is a "considerable" amount of renovations done to the property. No one can really define what "considerable" renovations are exactly, so it seems like that can be left up to interpretation...
It would be great to meet another local investor. Shoot me a PM and we can make plans to grab some coffee.
Justin
Quote from @Justin McElroy:
Hey @Kunal Kapur
I unfortunately wasn't able to connect with anyone who could give me an indefinite answer, but I was able to do some research myself. Each town has their rent control ordinances online that you can read through (although, they're usually not very clear).
Here is a link to my google drive folder where I keep all of these files: https://drive.google.com/drive/folders/1IB5PV0I_KK...
I don't have Hoboken in there, just because I'm not interested in investing there, but a simple google search for "hoboken rent control" should pretty much bring you right to their ordinance write up.
All of the towns in the area are pretty similar, where only owner occupied properties have the ability to mark the rent to whatever they'd like. If it is not owner occupied and the rent has been recorded with the town in the past, then you are kind of tied down to increases on the rents that were previously reported. The increase is usually based on the annual ECI, although Guttenberg just made it a flat 3% recently (with some exceptions).
Some exceptions to be able to mark the rent to market, is if there is a "considerable" amount of renovations done to the property. No one can really define what "considerable" renovations are exactly, so it seems like that can be left up to interpretation...
It would be great to meet another local investor. Shoot me a PM and we can make plans to grab some coffee.
Justin
I am looking at a 4 family in weehawken. If one unit is owner occupied, can the registered rents for other 3 tenant units be increased as well?
Quote from @Justin McElroy:
Hey @Kunal Kapur
I unfortunately wasn't able to connect with anyone who could give me an indefinite answer, but I was able to do some research myself. Each town has their rent control ordinances online that you can read through (although, they're usually not very clear).
Here is a link to my google drive folder where I keep all of these files: https://drive.google.com/drive/folders/1IB5PV0I_KK...
I don't have Hoboken in there, just because I'm not interested in investing there, but a simple google search for "hoboken rent control" should pretty much bring you right to their ordinance write up.
All of the towns in the area are pretty similar, where only owner occupied properties have the ability to mark the rent to whatever they'd like. If it is not owner occupied and the rent has been recorded with the town in the past, then you are kind of tied down to increases on the rents that were previously reported. The increase is usually based on the annual ECI, although Guttenberg just made it a flat 3% recently (with some exceptions).
Some exceptions to be able to mark the rent to market, is if there is a "considerable" amount of renovations done to the property. No one can really define what "considerable" renovations are exactly, so it seems like that can be left up to interpretation...
It would be great to meet another local investor. Shoot me a PM and we can make plans to grab some coffee.
Justin
Hey, Just joined the forum to say I've been looking into this as well. Seems like owners can live for at least a bit and then rent the unit for market rate.
EX: Guttenberg
"In the case of bona fide notice and need for the premises, the premises shall thereafter be decontrolled, and any reasonable rent may be charged thereafter, upon further subsequent notice of rent increase, pursuant to State law."
I believe it should "reset" the prior filings if there were any.
I'm in the area justin. Hope to connect.