S4541

An Act concerning residential rent payment surcharges, supplementing and amending P.L.1975, c.310, amending P.L.2019, c.300, and supplementing P.L.1960, c.39 (C.56:8-1 et seq.).

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. (New section) The Legislature finds and declares that:

a. New Jersey tenants face growing financial burdens due to rising rents, stagnant wages, and persistent inflation affecting essential goods and services, financial burdens which are exacerbated by New Jersey's prohibitively expensive housing market;

b. According to the National Low-Income Housing Coalition, a New Jersey renter must earn over $33 per hour to afford a modest two-bedroom apartment at market rent without being cost-burdened;

c. Over 45 percent of renters in the State are rent-burdened, paying more than 30 percent of their income for housing costs;

d. As more landlords transition to digital and online platforms to collect rent, tenants are often charged additional "convenience" fees, commonly ranging from three dollars to $100 per transaction, for the use of credit cards, debit cards, or electronic transfers to pay rent;

e. These surcharges, although individually small, can amount to hundreds of dollars annually per household;

f. For tenants on fixed incomes, especially senior citizens, disabled individuals, and lower wage earners, these charges represent an unfair and unnecessary financial strain;

g. Despite requirements imposed pursuant to section 2 of P.L.2019, c.300 (C.46:8-49.1), which prohibit a landlord from requiring a tenant or prospective tenant to pay rent by means of an electronic funds transfer, in many cases, landlords do not provide tenants with a no-cost, alternative payment method such as in-person, check, or money order payment, effectively forcing tenants to incur fees simply to meet their housing obligations;

h. It is in the public interest to ensure that tenants in this State are not subject to exploitative or unavoidable charges in connection with their rent payments, particularly in the context of the ongoing housing affordability crisis;

i. If tenants are subjected to such exploitative or unavoidable charges in connection with their rent payments, it is imperative to provide tenants with a private cause of action and, given the frequent disparity in financial resources between a landlord and tenant, provide an appropriate financial incentive to challenge a landlord’s unlawful conduct, incentivize private attorneys to represent residential tenants, and hold bad actors accountable to ensure that legal protections in place for residential tenants are actually enforced; and

j. Therefore, it is necessary and proper to place reasonable limits on rent payment surcharges, require landlords to assume the costs of such fees if tenants are not given a free alternative method of payment, and ensure penalties for noncompliance reflect the increase in the cost of renting residential rental units in New Jersey since the enactment of P.L.1975, c.310 (C.46:8-43 et seq.).

2. Section 2 of P.L.2019, c.300 (C.46:8-49.1) is amended to read as follows:

2. a. As used in this section:

"Landlord" means any person, or a firm, corporation, or other business entity, including a property manager or other agent of a person, or a firm, corporation, or other business entity, that leases, rents, or offers to lease or rent, residential units to a tenant.

"Online rent payment surcharge" means any fee or charge imposed in connection with the use of an online platform or electronic payment method to pay rent, including but not limited to, a credit card, debit card, automated clearinghouse (ACH), convenience fees, or electronic funds transfer fees.

b. No landlord shall require a tenant or prospective tenant to remit any amount due to the landlord pursuant to a residential lease, renewal, or extension agreement by means of electronic funds transfer, including but not limited to an electronic funds transfer system that automatically transfers funds on a regular, periodic, and recurring basis.

c. (1) A landlord shall not impose, pass through, or accept, whether directly, indirectly, or implicitly require through a third-party online rent payment method, a surcharge or other similar cost that exceeds five dollars per monthly rental payment for an online rent payment method.

(2) If a third-party online rent payment method utilized by the landlord to collect rent requires a surcharge or other similar cost that exceeds five dollars per monthly rental payment, the landlord shall assume and be responsible for the full cost of all online rent payment surcharges incurred by the tenant exceeding five dollars, or shall reimburse the tenant for the amounts exceeding five dollars and shall provide the tenant with a receipt pursuant to section 3 of P.L.2019, c.300 (C.46:8-49.2). If the landlord uses a third-party online rent payment method that requires a surcharge or other similar cost that exceeds five dollars, the landlord shall provide to the tenant a document that itemizes all related charges and demonstrates that the landlord assumed the full costs of all online rent payment surcharges exceeding five dollars, or that the landlord reimbursed the tenant for the full costs of all online rent payment surcharges exceeding five dollars within 10 days of the date of the payment.

d. A landlord who violates this section shall be subject to the penalty provisions of section 5 of P.L.1975, c.310 (C.46:8-47) and section 5 of P.L. , C. (C. ) (pending before the Legislature as this bill).

e. A violation of this section shall constitute an unlawful practice pursuant to the New Jersey consumer fraud act, P.L.1960, c.39 (C.56:8-1 et seq.).

(cf: P.L.2019, c.300, s.2)

3. Section 3 of P.L.2019, c.300 (C.46:8-49.2) is amended to read as follows:

3. a. (1) A landlord shall provide a receipt, either printed [or] , emailed, or electronically generated from the payment method, to a tenant for each [cash] payment made to the landlord for any amount due to the landlord pursuant to a residential lease, renewal, or extension agreement. The receipt shall accurately indicate the amount of the payment, the purpose of the payment, when the payment was received, the printed or typed names of both the landlord and tenant, and who accepted the payment.

(2) The following attestation shall be provided as set forth in this paragraph in no less than size 12 and bold-faced type with every receipt created for a rental payment that was provided by a tenant to a landlord:

"THE LANDLORD AFFIRMS, UNDER THE PENALTY OF PERJURY, THAT:

§ The receipt accurately represents the amount of the payment, the purpose of the payment, the date the payment was received, the identity of the landlord and the tenant, and the landlord or landlord’s agent who accepted the rental payment;

§ THE LANDLORD HAS NOT IMPOSED, PASSED THROUGH, OR ACCEPTED, WHETHER DIRECTLY, INDIRECTLY, OR IMPLICITLY REQUIRED THROUGH A THIRD-PARTY ONLINE RENT PAYMENT METHOD, A SURCHARGE OR OTHER SIMILAR COST THAT EXCEEDS FIVE DOLLARS PER MONTHLY RENTAL PAYMENT FOR AN ONLINE RENT PAYMENT METHOD; AND

§ IF THE LANDLORD HAS UTILIZED A THIRD-PARTY ONLINE RENT PAYMENT METHOD FOR RECEIVING RENT, THE LANDLORD:

o HAS ASSUMED THE PAYMENT OF THE SURCHARGE OR OTHER SIMILAR COSTS THAT EXCEEDED FIVE DOLLARS PER MONTHLY RENTAL PAYMENT, OR

o WILL REIMBURSE THE TENANT, WITHIN 10 DAYS FROM THE DATE OF THE PAYMENT, FOR THE COSTS OF THE SURCHARGE OR OTHER SIMILAR CHARGES THAT EXCEEDED FIVE DOLLARS PER MONTHLY RENTAL PAYMENT.

THE LANDLORD AFFIRMS THAT THE FOREGOING IS TRUE AND THAT, FOR A VIOLATION OF SECTIONS 2 AND 3 OF P.L.2019, C.300 (C.46:8-49.1 and 46:8-49.2), AND P.L.1975, C.310 (C.46:8-43 ET SEQ.), THE LANDLORD IS SUBJECT TO THE PENALTIES SET FORTH IN SECTION 5 OF P.L.1975, C.310 (C.46:8-47) AND SECTION 5 OF P.L. , C. (C. ) (PENDING BEFORE THE LEGISLATURE AS THIS BILL)."

b. A landlord who violates this section shall be subject to the penalty provisions of section 5 of P.L.1975, c.310 (C.46:8-47) and section 5 of P.L. , C. (C. ) (pending before the Legislature as this bill), except that the penalty shall be $100 more for a second violation by a landlord within a five-year period, and the penalty shall be $200 more for each subsequent violation by a landlord within a five-year period.

c. It shall be a valid defense in any action or proceeding against a tenant to recover possession of real property for the nonpayment of rent that the landlord violated this section with respect to the months in which the violation or violations occurred.

(cf: P.L.2019, c.300, s.3)

4. Section 5 of P.L.1975, c.310 (C.46:8-47) is amended to read as follows:

5. a. Any landlord who violates any provision of [this act] P.L.1975, c.310 (C.46:8-43 et seq.), contrary to the legal rights of tenants, shall be liable to a penalty of not more than [$100.00] $1,000 for each offense. Such penalty shall be collected and enforced by summary proceedings pursuant to "the penalty enforcement law" (N.J.S.2A:58-1 et seq.). The Superior Court, Law Division, Special Civil Part in the county in which the rental premises are located shall have jurisdiction over such proceedings. Process shall be in the nature of a summons or warrant, and shall issue upon the complaint of the commissioner [,] or the Attorney General [, or any other person].

b. In addition to the penalties set forth pursuant to subsection a. of this section, and notwithstanding any provision of subsection a. of this section to the contrary, a landlord who violates any provision of P.L.1975, c.310 (C.46:8-43 et seq.), contrary to the legal rights of a tenant, shall be liable to a penalty of $1,000 for each offense in an action brought at the discretion of a tenant whose landlord violates any provision of P.L.1975, c.310 (C.46:8-43 et seq.). The tenant shall be permitted to recover a civil penalty of $1,000, reasonable attorney’s fees, court costs, expenses for expert witnesses, and other related fees and expenses incurred in proving a violation of P.L.1975, c.310 (C.46:8-43 et seq.). The Superior Court, Law Division, Special Civil Part in the county in which the rental premises are located shall have jurisdiction over proceedings initiated pursuant to this paragraph. Process shall be in the nature of a summons or warrant, and shall issue upon the complaint of the tenant. In addition to the penalties set forth in this section, a tenant shall also be permitted to recover, from a landlord in violation of section 2 of P.L.2019, c.300 (C.46:8-49.1), an amount equal to the surcharge or other similar cost that exceeded the allowable five dollars per monthly rental payment for an online rent payment method, which was wrongfully charged to a tenant.

(cf: P.L.1991, c.91, s.460)

5. (New section) It shall be an unlawful practice for any landlord, as defined pursuant to subsection a. of section 2 of P.L.2019, c.300 (C.46:8-49.1), to impose upon, pass through to, or accept from, a tenant, whether directly, indirectly, or implicitly require through a third-party online rent payment method, a surcharge or other similar cost that exceeds five dollars per monthly rental payment for an online rent payment method in violation of section 2 of P.L.2019, c.300 (C.46:8-49.1), or to fail to include the notice required pursuant to paragraph (2) of subsection a. of section 3 of P.L.2019, c.300 (C.46:8-49.2).

6. This act shall take effect on the first day of the third month next following the date of enactment, and shall apply to any surcharge or other similar cost for an online rent payment method that is charged to a tenant on or after the effective date.

STATEMENT

This bill prohibits a landlord from imposing certain surcharges on a tenant for an online rent payment method.

While section 2 of P.L.2019, c.300 (C.46:8-49.1) currently prohibits a landlord from requiring a tenant or prospective tenant to remit rent due by means of electronic funds transfer, a landlord has discretion to impose certain surcharges on payment by means of electronic funds transfer for an online payment method.

Specifically, this bill prohibits a landlord from imposing, passing through, or accepting, whether directly, indirectly, or implicitly through a third-party online rent payment method, a surcharge or other similar cost that exceeds five dollars per monthly rental payment for an online rent payment method (prohibited surcharge). The bill requires that if a third-party online rent payment method utilized by the landlord requires a prohibited surcharge, the landlord is to assume and be responsible for the full cost of the prohibited surcharge or reimburse the tenant. Further, the bill requires that if the landlord uses a third-party online rent payment method that requires a prohibited surcharge, the landlord is to provide to the tenant a document that itemizes all related charges and demonstrates that the landlord assumed the costs of all online rent payment surcharges, as defined in the bill, exceeding five dollars, or that the landlord reimbursed the tenant for the costs of all online rent payment surcharges exceeding five dollars within 10 days of the date of payment by the tenant.

The bill requires that the landlord provide an attestation with a receipt, required following all rent payments provided by a tenant, as described in the bill, in which the landlord affirms, under the penalty of perjury, the veracity of the receipt and compliance with certain provisions of the bill.

A violation of the bill constitutes an unlawful practice pursuant to the New Jersey consumer fraud act, P.L.1960, c.39 (C.56:8-1 et seq.), and subjects a landlord to the to the penalty provisions of section 5 of P.L.1975, c.310 (C.46:8-47), which the bill increases to $1,000 from $100 to reflect the increase in the average price of rent for residential rental units in New Jersey since the penalty provisions’ enactment in 1975. The bill also provides a private cause of action for a tenant whose landlord has violated the requirements of the bill, and specifies that a tenant is to recover the $1,000, in addition to reasonable attorney’s fees, court costs, expenses for expert witnesses, and other related fees and expenses incurred in proving a violation of P.L.1975, c.310 (C.46:8-43 et seq.). The bill also authorizes the tenant to recover an amount equal to the surcharge or other similar cost that exceeds five dollars per monthly rental payment, wrongfully charged to a tenant.

The bill would take effect on the first day of the third month next following enactment and apply to any surcharge or other similar cost for an online rent payment method that is charged to a tenant on or after the effective date.