Since the beginning of the COVID-19 pandemic, NJAA has been advocating for policies that support both tenants and landlords in need without placing unnecessary and burdensome mandates on landlords who have been providing safe housing throughout the pandemic to millions of New Jerseyans.
New Jersey imposed an eviction moratorium through Executive Order 106 in March of 2020 before instituting its “stay-at-home” order and shuttering businesses and workplaces throughout the state. The eviction moratorium was tied to either the Public Health Emergency or State of Emergency, whichever was longer. Through subsequent legislation, P.L. 2021, c. 103 clarified that the eviction moratorium was scheduled to remain in effect through December 31, 2021.
NJAA worked with the Legislature to pass S-3691, which: (1) ends the eviction moratorium on a phased schedule, (2) provides tenant protections to avoid an eviction crisis, and (3) provides both $500 million in additional rental assistance and $250 million in utility assistance.
NJAA will be holding an education seminar at 10:30 a.m. on August 20, 2021, to discuss the new law and what it means for your business. We would encourage you to register by clicking here.
End of the Eviction Moratorium & Civil Debt Conversion
P.L. 2021, c. 103, provided that the eviction moratorium would have continued through the end-of-the-year for all tenants.
Under the new law signed on August 4, 2021, the eviction moratorium will end according to the following fixed date schedule:
August 4 – Cases Unrelated to Nonpayment of Rent
August 31 – Cases Arising Due to Nonpayment of Rent for Middle-and Upper-Income Households (anyone making over 80% of Area Median Income)
November 15 – Removals Due to Foreclosure
December 31 – Cases Arising Due to Nonpayment of Rent for Low- and Moderate-Income Households (anyone making below 80% of Area Median Income) Who Complete Certification
Note: For low- and moderate-income households to qualify for extended protections, they will need to certify, under penalty of perjury, (1) their income, (2) that they were unable to pay rent due to a COVID-19 hardship, and (3) that they have applied for state and local rental assistance, as applicable. Certification forms will be prepared by the Department of Community Affairs and must be provided by the tenant to the landlord.
Upon completion of this certification, low- and moderate-income households would be given continued eviction protections until December 31, 2021.
Civil Debt Conversion
Under the bill, any unpaid rent that is due between March 1, 2020, and August 31, 2021, would be considered “civil debt” and cannot be the basis for an eviction action for any household earning up to 120% of the Area Median Income. As such, pending eviction cases will be dismissed upon certification from the tenant, under penalty of perjury, that the tenant meets the income qualifications.
The money, however, would still be owed. If a tenant does not repay the rent owed, either through rental assistance, a negotiated repayment agreement, or in a lump sum, the law allows landlords to seek monetary judgments for unpaid rent during the covered period in the Special Civil Part of the Superior Court, regardless of the amount of rent in dispute. The law, however, prohibits the sale or assignment of debt to a third-party debt collector.
Court fees for cases already filed, but dismissed under the law, would not be returned to the landlord. However, if the landlord is required to file against the same tenant, the landlord may request that the case be reinstated with the court without needing to pay a filing fee. In short, the landlord would pay the fees to serve the amended action, but no court filing fees would be required.
Implied Warranty of Habitability
The law seeks to ensure that the implied warranty of habitability is maintained for all tenants, especially those receiving state or federal rental assistance. As such, when a landlord is receiving assistance on behalf of a tenant during the course of the payment period, if a participant household experiences conditions that violate the implied warranty of habitability, the tenant can certify to the DCA that such conditions exist. Based on the tenant’s written certification, the department would conduct an inspection of the dwelling and upon confirmation that the violation of the implied warranty of habitability exists, the department would, after serving the landlord with written notification of such violation and providing the landlord with sufficient opportunity to cure, consider whether and in what amount to withhold rent based on those conditions. In short, if a landlord violates the warranty of habitability while receiving state or federal rental assistance, the DCA has the authority to reduce or eliminate such assistance.
Credit Protections & Eviction Records Protections
The law prohibits landlords from furnishing derogatory information about a tenant’s failure to pay rent, or failure to pay rent on time, that accrued during the covered period, either to a Credit Reporting Agency or to another landlord. Such information provided by a landlord to a landlord’s management company or attorney would not be considered a violation of the act.
The Attorney General enforces the section of the law pertaining to both the use of eviction records and information provided to a credit reporting agency and can impose fines and other requirements. If, however, a landlord provided such information prior to enactment of the law, the landlord would not be subject to the penalty provisions of the act, but may be required to retract the report.
Additionally, the law prohibits landlords from refusing to rent to a prospective residential tenant due to any record or information reflecting a tenant’s non-payment or late payment of rent, or a related court filing, during the covered period.
Note that separate legislation, also signed into law, directs the courts to seal these eviction records.
Expanded Rental Assistance
The bill would establish the “Eviction Prevention Program” within the Department of Community Affairs to assist tenants paying off arrearages, current rent, and paying rent on a prospective basis. The program would be modelled after the COVID-19 Emergency Rental Assistance Program (CVERAP-II).
The program would be funded by $750 million in federal assistance, with $500 million dedicated to rental assistance and up to $250 million for utility assistance. This would be in addition to federal monies already appropriated to rental assistance programs at both the state and local levels.
While the program will be modelled after the CVERAP-II program, eligibility will be expanded to include middle-income households (those households with incomes up to 120% of AMI). For ongoing rent, assistance would be provided on a sliding scale based on the household’s income and rent obligations:
Very low-income household (Up to 30% of AMI) — A very low-income household a deep subsidy can be provided in the amount necessary to limit the household’s share of ongoing rent to not more than 30 percent of the household’s income;
Low income & Moderate income (low income is up to 50% AMI; moderate income is up to 80% AMI) For a low- or moderate-income household that is not also very low-income, a shallow subsidy may be provided in the amount necessary to limit the household’s share of ongoing rent to not more than 30 percent of the household’s income, but it cannot exceed $800 per month; and
Middle Income Household (above 80% AMI but up to 120% AMI) — For a middle-income household, assistance in the form of a subsidy may be provided in the amount necessary to limit the household’s share of ongoing rent to not more than 30 percent of the household’s income, provided, however, that the amount of any such subsidy shall not exceed $500 per month.
In keeping with the current CVERAP-II program, a landlord would be required to waive any late fees or penalties for the period covered by any rental assistance payment(s).
Please click here for a copy of S-3691 as signed into law by the Governor.