In the United States, every state defines its laws and regulations. Every state has its rent regulations formulated in accordance with subsets of apartments. The idea is to monitor affordable housing and keep people from going homeless and broke. Protect your assets and financial interests with the ideal United States landlord insurance coverage for your property.
However, New Jersey has no rent stabilization or statewide rent control laws. However, cities and counties in NJ can enforce their own rent control laws. If you own a property in in NJ, you must follow these local municipalities rental control laws. This enables landlords to set rent and increase it across the state, given that they provide proper notice.
On the other hand, the landlord can increase the rent with certain discretions, as much as they wish, and whenever they want. So, let's find out:
- What do these terms mean?
- What are the exceptions?
- What are the limitations?
These questions will help us understand the rights of both tenants and landlords in New Jersey.
What is rent control?
Rent control, or rent regulation, usually refers to laws and ordinances limiting how much a landlord can increase rent in a given period and set conditions for when and how much they can raise rents. Such regulations are set to make housing affordable by imposing price controls. There are generally two types of rent regulation:
- Eviction control
- Price control
Both require landlords to limit their rates for tenants based on factors such as salaries and inflation. Eviction controls specify criteria under which tenants cannot be evicted, whereas price controls define how landlords can increase rent. Controlling the eviction rates is often difficult due to constant changes in housing markets; therefore, wage-related regulations are more common.
Rent control is more common in cities where competition for limited housing stock raises market-rate prices out of reach for these residents.
According to the National Multifamily Housing Council’s website, rent control is not applicable in all United States. For example, some states have neither rent control nor premonitions, including the following: Florida, Wyoming, Nebraska, Ohio, Maine, Hawaii, Delaware, Alaska, Nevada, Virginia, West Virginia, and Pennsylvania.
There are two primary forms of rent regulation:
- Eviction Control: Eviction control policies set forth specific conditions under which tenants may or may not be evicted from their homes. These rules are designed to protect tenants from arbitrary or unjust removal, ensuring that evictions occur only for valid reasons, such as non-payment of rent or violation of lease terms. Eviction control helps to provide a sense of security for tenants, knowing that their housing situation is stable and protected by law.
- Price Control: Price control, on the other hand, directly addresses the issue of rent increases. These regulations dictate how and when landlords can raise rent, often tying permissible rent hikes to factors like inflation rates, the tenant's income, or other economic indicators. The goal of price control is to prevent sudden and excessive increases in rent that could otherwise push tenants out of their homes due to affordability issues.
When Can a Landlord Raise Rent in New Jersey?
A landlord can raise rent in New Jersey upon the termination of a lease period or beginning of lease period but no rent increase can be done during an active lease. For a year-long lease, a landlord must provide you with 60- 90 days notice in writing. For tenants on month-to-month lease, the landlord must notify atleast one month before the lease ends. For tenants on a week-to-week lease that can be as little as 7-days notice. The landlord must give the tenant the option of entering a new lease with the increase rental rate. The median Fair Market Rent in New Jersey is $1,602 for a 2-bedroom home in 2023.
How Much Can a Landlord Raise Rent in New Jersey?
No, the state of New Jersey does not provide a limit to rent increases. However the local municipalities do and the rent increase limits can range anywhere between 2 - 6% per year. Many cities in New Jersey follows the Consumer Price Index (CPI) to set that range. Here is some guidance around NJ Cities and rent control limits.
- Barnegat Township - 3.5%
- Bayonne - Based on CPI (max 5.5%)
- Bergen - 4%
- Camden - 5.5%
- East Orange - 4 or 5%
- East Rutherford - 5.5%
- East Windsor - 2.9% (and if necessary due to heating cost)
- Eatontown - 3.5% (landlord pays heat) or 2.5% (tenant pays utilities)
- Fairview - 4%
- Fort Lee - 5%
- Guttenberg Town - 4%
- Jersey City - Based on CPI (max 4%)
- Leonia - 5% per year on renewal
- Linden - CPI or 5% (whichever is lower)
- Lindenwold Boro - 3.5%
- Lyndhurst - 5.5%
- Marywood Borough - 4.25%
- Newark - Based on CPI (max 4%)
- West Orange - 3% (landlord pays heat) or 2% (tenant pays heat)
How Can You Have Fixed Rent in New Jersey?
Only a fixed-term lease can bind the landlord not to raise the rent until the lease ends. After the lease ends, the landlord can raise however they want when renewing the lease. Also, in a month-to-month lease, the landlord can raise the rent any time after producing a notice one month prior. So, if you are looking to have a fixed rent, you can talk to the landlord when signing the lease. That would give you the edge to have the same rent for the term of the lease.
When Can an Increase in Rent Become Illegal?
Certain situations classify the rent hike as illegal in the state of New Jersey. Those are:
- Discrimination
- Increasing before the end of the lease
- And the act of retaliation
In New Jersey, every landlord must follow the Federal Fair Housing Act that states a landlord may not increase rent based on the age, race, religion, nation of origin, familial status, sexual orientation, military status, or disability status of the tenant.
Correspondingly goes for the case of lease. When signing the lease for a year, the tenant and landlord agree on the rent. The lease document indicates that the rent will remain the same until the end of the lease term. In this scenario, the landlord has to wait for the lease term to end and cannot increase the rent.
If a tenant exercises their legal right, which doesn't sit well with the landlord in New Jersey, and a rent hike comes as a response or retaliation, it is termed illegal. The legal rights include:By making a complaint to any governmental agency regarding certain conditions in the building. Such as health inspectors, building inspectors, fire departments, or any other regulatory body for lousy living conditions.By joining any tenant union. Suppose the landlord is uncomfortable with the tenant joining any union and retaliates against it. However, it is the legal right of the tenant to join any tenant union. Use rent money to fix any defects in the rental unit. The tenant can use the rent money for these fixes when the landlord has failed to comply with the fixes, resulting in terrible living conditions, health hazards, or safety hazards. Learn more about New Jersey tenant unions here.
Is There a Certain Limit to Rent Increment?
Again, no! The landlord can increase the rent as much as they intend to, but it must be reasonable. However, this can cause a loss of income in the future.
If tenants find the rent unreasonable, they are likely to move out when they find something within the budget. However, since the rent is high, conflicting with the space and location, there are chances to have new tenants any time soon.
When the old tenants leave, it's a loss of income for the landlord. That's because the property will stay vacant until someone comes along and agrees to the hiked rents.
The Rent Increase Notice
A majority of jurisdictions require landlords to send an official written rent increase notice to raise the price of rental units. This notification must detail the new price, as well as when it takes effect. The landlords must submit a request for rental increase in NJ to DCA (Department of Consumer Affairs) for approval. The rent can be increased only after DCA approval and atleast 60 days after DCA receives the request from the property owner. In New Jersey, all tenants must receive a written notice 30 day prior to inform them of the rent increase for it to be valid.
Conclusion
However, the presence and specifics of rent control laws vary significantly by location. In the United States, rent control policies are not uniform across all states or cities. Some states have comprehensive rent control laws, while others have either limited or no rent control measures in place. The National Multifamily Housing Council notes that states such as Florida, Wyoming, Nebraska, Ohio, Maine, Hawaii, Delaware, Alaska, Nevada, Virginia, West Virginia, and Pennsylvania do not have rent control laws or preemption against them.
Critics of rent control argue that it can lead to decreased investment in rental properties, reduced maintenance and quality of housing stock, and a shortage of available rental units as landlords may choose to convert rental properties to other uses or opt not to rent them out. Proponents, however, argue that rent control is essential for ensuring housing affordability and stability for tenants, particularly in markets with soaring rental prices and limited availability.
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