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What do you mean by the "landlord residing in the property?" Does the landlord live in the apartment complex? or does the landlord live with you?
One more question....do you have a written lease?
Second, the landlord has to offer you the option of entering into a new lease after the old lease expires. This new lease may be at a higher rent. The next section describes how a landlord must end your lease and offer you a new lease at a higher rent.
Notice terminating lease and notice of rent increase. The law requires that, for a landlord to raise your rent, you must be given proper written notice. A proper notice must inform the tenant that the current written or oral lease is being ended and that the tenant can stay in the rental unit by signing a new lease at a higher rent.
Since your lease is monthly, a proper notice must explain that your existing lease will be terminated or ended in one full calendar month. You must receive this notice at least one month before your lease ends. The notice period may be greater, depending on what your current lease says. If your lease is for one year, the notice must explain that your lease will terminate on the date the lease ends, and you must receive this notice at least one month before that date. The notice can be for a longer period, such as 90 days before the lease is to end, if the lease requires it.
In addition to ending the lease, the notice must also say that, at the end of your current lease, you have the choice of accepting a new lease at the higher rent. If you decide to sign the lease and stay on as a tenant, you must pay the rent increase. Cite: Harry's Village, Inc. v. Egg Harbor Tp., 89 N.J. 576 (1982).
Any notice of a rent increase that is not in writing and is not divided into two parts-(1) ending the old lease and (2) beginning a new lease at a higher rent-is not legal, and you do not have to pay the increase.
If you don't pay the increase If the landlord asks for a rent increase, and you decide to stay but not pay the increase, you are not agreeing to the increase. You should be aware that, if you do this, the landlord can try to evict you in court under the Anti-Eviction Act. The law allows landlords to evict tenants for nonpayment of a rent increase.
In court, you can argue to the judge that the landlord did not give you proper notice and therefore you do not have to pay the increase until the landlord has given you the right notice. If you succeed with this argument, the judge will dismiss the eviction complaint.
The judge could also find that the landlord gave you the proper notice of a rent increase. This means that, unless the increase is "unconscionable" or in excess of the amount allowed by rent control, you will be evicted unless you pay the increase. Cite: N.J.S.A. 2A:18-61.1(f).
Unconscionable rent increases Under the Anti-Eviction Act, a landlord cannot make you pay an increase in rent that is so large that it is unconscionable, meaning that it is extremely harsh or so unreasonable as to be shocking. Unconscionability is not important to tenants if the apartment, house, or mobile home is covered by a rent control ordinance adopted by the city or township. In that situation, rent control limits the amount of the rent increase. Also, if you live in subsidized housing, or receive Section 8, federal law will determine how much your rent can be increased. In all other cases, the only protection you have is that the statute states that the rent increase cannot be unconscionable. Cite: N.J.S.A. 2A:18-61.1(f).
There is no specific percentage for the increase. However, the increase cannot be "unconscionable."
Whether an increase is unconscionable depends on the facts of each case. The eviction law does not state what makes an increase unconscionable. In deciding disputes between tenants and their landlords over rent increases, judges have not defined how large an increase must be in dollars or percentages to be unconscionable. It is clear that some rent increases are unconscionable because the increase is much larger than the prior rent, or because the landlord has asked for many small increases in a short period of time that all add up to a large increase. For example, an increase of over 20 percent, if made by the landlord without a very good reason, could be unconscionable. Even a five percent increase could be unconscionable if the conditions in the building are very bad and the landlord has failed to make needed repairs.
If you believe that the rent increase your landlord is asking for may be unconscionable, you can refuse to pay the increase. Your landlord can then take you to court to try to evict you for nonpayment of the rent increase. If the notice ending your lease and increasing your rent is proper, then you can defend against the increase in court by arguing that the increase is unconscionable.
Burden of proof. If the landlord takes you to court, it will be up to the judge to decide if the increase is unconscionable and if you have to pay the increase or be evicted. The burden of proof is on the landlord to show that the rent increase is fair and not unconscionable. Cite: Fromet Properties, Inc. v. Buel, 294 N.J. Super. 601 (App. Div. 1996).
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