A5700

An Act addressing certain missed residential lease payments in response to the COVID-19 pandemic, and making an appropriation.

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

1. As used in this act:

“25 percent assistance payment” means assistance, provided pursuant to section 4 of this act, in the form of a payment of 25 percent of rent due, but not yet paid, for all of the landlord’s low- and moderate-income tenants in the building or development for which the assistance has been requested during the period that is both within the assistance period and prior to submission of the program application.

“80 percent assistance payment” means assistance, provided pursuant to section 4 of this act, in the form of a payment of 80 percent of rent due, but not yet paid, for all of the landlord’s low- and moderate-income tenants in the building or development for which the assistance has been requested during the period that is both within the assistance period and prior to submission of the program application.

“Assistance” means compensation for unpaid rent provided pursuant to section 4 of this act, through the program.

“Assistance period” means the period beginning April 1, 2020 and ending two months following the end of the public health emergency declared pursuant to Executive Order No. 103 of 2020.

“Commissioner” means the Commissioner of Community Affairs.

“Department” means the Department of Community Affairs.

“Low- and moderate-income tenant” means a residential tenant household, for whom gross household income equals not more than 80 percent of the median gross annual household income for households of the same size within the relevant housing region.

“Program” means the Landlord COVID-19 Compensation Program established by section 2 of this act.

“Program application” means an application for assistance through the program.

2. a. There is established in the Department of Community Affairs the “Landlord COVID-19 Compensation Program.” The purpose of the program is to provide assistance to a landlord to compensate for a portion of the unpaid rent, due during the assistance period, that the landlord’s low- and moderate-income tenants have owed the landlord, but have not yet paid. The program shall not provide assistance to the landlord if the landlord has obtained compensation, or has an outstanding application for compensation, through a different landlord relief program that, as determined by the commissioner, preempts the landlord from eligibility for assistance payments, including, but not limited to, funding from the Small Landlord Emergency Grant Program established by the New Jersey Housing and Mortgage Finance Agency. Pursuant to section 4 of this act, assistance provided through the program shall compensate a landlord for either 80 percent or 25 percent of rent due for all of the landlord’s low- and moderate-income tenants in the building or development for which the assistance has been requested during the period that is both within the assistance period and prior to submission of the program application.

b. The commissioner shall limit eligibility for assistance payments to a landlord that:

(1) as of the date of submission of a program application, is in substantial compliance with the requirements of: the “State Uniform Construction Code Act,” P.L.1975, c.217 (C.52:27D-119 et seq.); the “Hotel and Multiple Dwelling Law,” P.L.1967, c.76 (C.55:13A-1 et seq.); and the State housing code, adopted by the Department of Community Affairs pursuant to P.L. 1966, c. 168 (C.2A:42-74 et seq.);

(2) as of March 9, 2020, is in substantial compliance with property tax and other tax payment responsibilities; and

(3) has no pending criminal charges.

c. The program shall begin accepting applications as soon as possible following enactment of this act. If a landlord applies for assistance prior to the conclusion of the assistance period, and the landlord’s low- and moderate-income tenants miss one or more rent payments after submission of the program application, then the landlord may apply to the department for one or more additional assistance payments on a quarterly basis through the conclusion of the assistance period. The department may adjust this application schedule as deemed appropriate by the commissioner.

3. a. A program application shall list:

(1) the total amount of rent due to the landlord from any low- and moderate-income tenants as established by the leases duly entered between landlord and low- or moderate-income tenants;

(2) the amount of rents paid by the low- and moderate-income tenants or any third parties on behalf of the low- and moderate-income tenants;

(3) the amount of any unpaid and owed rent;

(4) the cost to the landlord of maintaining the low- and moderate-income rental housing;

(5) the amount of security deposit funding that the landlord’s low- and moderate-income tenants have applied against rent pursuant to Executive Order No. 128 of 2020; and

(6) any other information required by the department for determining the landlord’s financial need and that of the landlord’s low- and moderate-income tenants.

b. An application shall be accompanied by a form completed by the tenant of each of the landlord’s rental units for which the landlord is seeking assistance endorsing the application, which shall include any additional information required by the department.

c. If the tenant of a rental unit is unwilling to complete the form required in subsection b. of this section notwithstanding diligent effort by the landlord, the landlord may attach to the application a certification in such form as shall be determined by the department setting forth:

(1) the landlord’s efforts to obtain tenant endorsement;

(2) the household income of the tenant, to the best of the landlord’s knowledge;

(3) the number of occupants in the rental unit; and

(4) any additional information required by the department.

4. a. An assistance payment provided through the program shall compensate a landlord for either 80 percent, or 25 percent, of rent due, but not yet paid, for all of the landlord’s low- and moderate-income tenants in the building or development for which the assistance has been requested during the period that is both within the assistance period and prior to submission of the program application.

(1) The acceptance of an 80 percent assistance payment shall constitute a settlement of all rent due from all of the landlord’s low- and moderate-income tenants in the building or development for which the assistance was requested during the period both within the assistance period and prior to submission of the program application.

(2) The acceptance of a 25 percent assistance payment shall constitute a settlement of only 25 percent of rent due from all of the landlord’s low- and moderate-income tenants in the building or development for which the assistance was requested during the period both within the assistance period and prior to submission of the program application.

b. By accepting an assistance payment, the landlord shall waive any late or other fees charged to low- and moderate-income tenants as a result of the nonpayment of rent during the period that is both within the assistance period and prior to submission of the program application. The acceptance of the assistance payment shall constitute a settlement of these costs even though they may not be fully compensated through the assistance payment.

c. Upon the provision of an assistance payment, the commissioner shall notify the landlord’s low- and moderate-income tenants of the protections provided to them as a consequence of the landlord’s receipt of assistance.

d. A landlord shall not accept a rent payment that, pursuant to this act, a tenant is not responsible for paying. If a landlord is provided with a rent payment from a low and moderate income tenant following submission of a program application, the landlord shall promptly reimburse the tenant for that payment if the tenant is ultimately not responsible for the payment as a result of an assistance award provided to the landlord.

e. A landlord receiving assistance or awaiting the department’s response to a program application, shall not initiate an eviction proceeding, or complete a previously-initiated eviction proceeding, for a violation of subsection a., f., or j. of section 2 of P.L. 1974, c. 49 (C. 2A:18-61.1), or otherwise for any unpaid rent balances, owed by a low- and moderate-income tenant for rent due during the period that is both within the assistance period and prior to submission of the program application.

f. A landlord shall not initiate a monetary judgment action against a low- and moderate-income tenant for unpaid rent balances owed during the assistance period unless:

(1) the landlord received only a 25 percent assistance payment, and intends to recover the remaining rent owed, or a portion thereof;

(2) The landlord applied for assistance on behalf of the low and moderate income tenant, but was denied; or

(3) The landlord seeks only to obtain compensation for rent payments due within the assistance period but after submission of a program application, and not covered by a subsequent program application.

g. If a landlord has not applied for assistance pursuant to this act on behalf of a low- and moderate-income tenant, then the landlord shall not initiate an eviction proceeding or a monetary judgment action against that low- or moderate-income tenant for a violation of subsection a., f., or j. of section 2 of P.L. 1974, c. 49 (C. 2A:18-61.1), or otherwise for any unpaid rent balances, owed during the assistance period.

h. A landlord initiating an eviction action shall provide documentation on a form to be prepared and adopted by the Administrative Director of the Courts that the landlord is not prohibited from initiating the action by any provision of this act.

5. The Department of Community Affairs shall, as soon as practicable following the enactment of this act, prepare and make available, on its Internet website, information for landlords on (1) when assistance applications shall be available, (2) the necessary steps for application submission, (3) how to obtain help in application completion, and (4) other matters related to assistance applications deemed necessary by the commissioner. This information shall be made available in English, Spanish, and any other languages determined necessary by the commissioner.

6. An intentional misrepresentation by a landlord of any information to obtain an assistance payment shall constitute a crime of the fourth degree in addition to other applicable penalties.

7. a. The Commissioner of Community Affairs, in accordance with the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), shall adopt rules and regulations to effectuate the provisions of this act.

b. Notwithstanding the limitations established in section 1 of P.L. 2011, c.215 (C.52:14B-3a) on the use of regulatory guidance documents, the commissioner shall prepare and disseminate regulatory guidance documents as defined in subsection d. of section 1 of P.L. 2011, c.215 (C.52:14B-3a), in advance of the adoption of regulations as necessary for the administration of this act, for purposes including but not limited to providing guidance on: (1) the procedures required for application submission, and (2) determinations of whether or not a tenant meets the income limitations necessary to qualify as a low- and moderate-income tenant.

8. There is appropriated from funds provided to the State by the United States government under the “Coronavirus Aid, Relief, and Economic Security Act,” Pub. L. 116-136, to the Department of Community Affairs the sum of $300,000,000 for assistance under this program, of which no more than $1,500,000 may be used by the department to defray the administrative costs of the program. If $300,000,000 is not available through the “Coronavirus Aid, Relief, and Economic Security Act,” Pub. L. 116-136, then the remainder of this amount shall be appropriated from other federal funding authorized for coronavirus relief as it becomes available. If federal funding is not available to satisfy the full amount of this appropriation, then the Commissioner of Community Affairs may notify the State Treasurer and the Joint Budget Oversight Committee of the Legislature of the deficiency and may request that the Legislature appropriate a portion of the remainder from the General Fund, or other available State funding sources, for the purposes of the program.

9. This act shall take effect immediately.

STATEMENT

This bill seeks to partially reimburse landlords for past due rents which remain uncollected from low- and moderate-income tenants who were unable to pay all or part of their rental payments during time of the COVID-19 emergency.

The bill would establish the “Landlord COVID-19 Compensation Program” in the Department of Community Affairs (“DCA”) to provide compensation assistance to landlords who have not received full rent payments from their low- or moderate-income tenants during the assistance period. The bill defines this “assistance period” as the period beginning April 1, 2020 and ending two months following the end of the public health emergency declared pursuant to Executive Order No. 103 of 2020. Assistance provided through the program would compensate a landlord for either 80 percent or 25 percent of rent due for all of the landlord’s low- and moderate-income tenants in the building or development for which the assistance is requested during the period that is both within the assistance period and prior to submission of the program application.

The bill limits landlord eligibility for assistance payments to landlords who have no pending criminal charges, and are in substantial compliance with the State housing code and certain other codes, and with property tax and other tax payment responsibilities.

If a landlord applies for assistance prior to the conclusion of the assistance period, and the landlord’s low- and moderate-income tenants miss one or more rent payments after submission of the program application, then the bill would authorize DCA to allow the landlord to apply again for one or more additional assistance payments on a quarterly basis through the conclusion of the assistance period. The bill authorizes DCA to adjust the application schedule as deemed appropriate by the Commissioner of Community Affairs.

The bill directs that a program application would be accompanied by a form completed by the tenant of each of the landlord’s rental units for which the landlord is seeking assistance endorsing the application, and including any additional information required by the DCA. If the tenant of a rental unit is unwilling to complete this form notwithstanding diligent effort by the landlord, then the bill authorizes the landlord to attach to the application a certification in such form as shall be determined by DCA setting forth: (1) the landlord’s efforts to obtain tenant endorsement; (2) the household income of the tenant, to the best of the landlord’s knowledge; (3) the number of occupants in the rental unit, and (4) any additional information required by DCA.

An assistance payment provided through the program would compensate a landlord for either 80 percent, or 25 percent, of rent due, but not yet paid, for all of the landlord’s low- and moderate-income tenants in the building or development for which the assistance is requested during the period that is both within the assistance period and prior to submission of the program application. The acceptance of an 80 percent assistance payment would constitute a settlement of all rent due from all of the landlord’s low- and moderate-income tenants in the building or development for which the assistance was requested during this period. However, the acceptance of a 25 percent assistance payment would constitute a settlement of only 25 percent of rent due from all of the landlord’s low- and moderate-income tenants in the building or development for which the assistance was requested during this period.

By accepting an assistance payment, the landlord would be agreeing to also waive any late or other fees charged to low- and moderate-income tenants as a result of the nonpayment of rent during the period that is both within the assistance period and prior to submission of the program application. Upon the provision of an assistance payment, DCA would notify the landlord’s low- and moderate-income tenants of the protections provided to them as a consequence of the landlord’s receipt of assistance. The bill would prohibit a landlord from accepting a delinquent rent payment from a low- and moderate-income tenant if the tenant is not responsible for the rent payment as a result of the landlord’s receipt of an assistance payment.

Under the bill, a landlord receiving assistance or awaiting DCA’s response to a program application, would not be permitted to initiate an eviction proceeding, or complete a previously-initiated eviction proceeding, for non-payment or habitually late payment of rent due during the period that is both within the assistance period and prior to submission of the program application. The bill would prohibit a landlord from initiating a monetary judgment action against a low- and moderate-income tenant for unpaid rent balances owed during the assistance period unless: (1) the landlord receives only a 25 percent assistance payment, and intends to recover the remaining rent owed, or a portion thereof, (2) the landlord has applied for assistance on behalf of the low and moderate income tenant, but has been denied, or (3) the landlord seeks only to obtain compensation for rent payments due within the assistance period but after submission of a program application, and not covered by a subsequent program application. If a landlord does not apply for assistance on behalf of a low- and moderate-income tenant, then the landlord would be prohibited from initiating an eviction proceeding or a monetary judgment action against that low- or moderate-income tenant for unpaid rent balances owed during the assistance period. The bill would require a landlord initiating an eviction action to provide documentation on a form to be prepared and adopted by the Administrative Director of the Courts that the landlord is not prohibited from initiating the action by any provision of the bill.

The bill directs DCA, as soon as practicable following the enactment of the bill to prepare and make available, on its Internet website, information for landlords on: (1) when assistance applications shall be available, (2) the necessary steps for application submission, (3) how to obtain help in application completion, and (4) other matters related to assistance applications deemed necessary by the commissioner. This information would be made available in English, Spanish, and any other languages determined necessary by the commissioner.

An intentional misrepresentation by a landlord of any information to obtain an assistance payment would constitute a crime of the fourth degree in addition to other applicable penalties.

The bill directs DCA to adopt rules and regulations to effectuate the provisions of the bill. Notwithstanding the limitations established in section 1 of P.L. 2011, c.215 (C.52:14B-3a) on the use of regulatory guidance documents, the bill would authorize DCA to prepare and disseminate regulatory guidance documents in advance of the adoption of regulations as necessary for the administration of this bill, for purposes including but not limited to providing guidance on: (1) the procedures required for application submission, and (2) determinations of whether or not a tenant meets the income limitations necessary to qualify as a low- and moderate-income tenant.

The bill would appropriate from funds provided to the State by the United States government under the “Coronavirus Aid, Relief, and Economic Security Act,” Pub. L. 116-136, to DCA the sum of $300,000,000 for assistance under the program. If $300,000,000 is not available through the “Coronavirus Aid, Relief, and Economic Security Act,” then the remainder of this amount shall be appropriated from other federal funding authorized for coronavirus relief as it becomes available. If federal funding is not available to satisfy the full amount of this appropriation, the bill would authorize the Commissioner of Community Affairs to notify the State Treasurer and the Joint Budget Oversight Committee of the Legislature of the deficiency and request that the Legislature appropriate a portion of the remainder from the General Fund, or other available State funding sources.