175 Executive House, LLC v. Elesha Miles

156 A.3d 190, 449 N.J. Super. 197, 2017 N.J. Super. LEXIS 32

• Court: New Jersey Superior Court Appellate Division
• Decided: March 10, 2017
• Docket: A-1604-15T2
• Status: Published

Opinion

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION DOCKET NO. A-1604-15T2

175 EXECUTIVE HOUSE, L.L.C.,

Plaintiff-Respondent, APPROVED FOR PUBLICATION

v. March 10, 2017

APPELLATE DIVISION ELESHA MILES,

Defendant-Appellant. _________________________________

Argued January 18, 2017 – Decided March 10, 2017

Before Judges Espinosa, Guadagno, and Suter.

On appeal from the Superior Court of New Jersey, Law Division, Special Civil Part, Essex County, Docket No. LT-25723-15.

José L. Ortiz argued the cause for appellant (Essex-Newark Legal Services, attorneys; Mr. Ortiz, Felipe Chavana, and Amy C. Schwind, on the briefs).

Bruce E. Gudin argued the cause for respondent (Ehrlich, Petriello, Gudin & Plaza, P.C., attorneys; Mr. Gudin, on the brief).

The opinion of the court was delivered by

SUTER, J.A.D.

Elesha Miles (defendant) appeals an October 29, 2015 judgment

of possession entered in favor of 175 Executive House, L.L.C. (the

landlord) and a November 16, 2015 order that vacated defendant's Order to Show Cause and affirmed the judgment of possession. We

reverse the judgment of possession.

Defendant rents an apartment in East Orange from the landlord.

She receives a housing assistance voucher under the State's Rental

Assistance Program (S-RAP). N.J.S.A. 52:27D-287.1 to -287.4.

Under that program and because she is elderly and disabled,

defendant pays twenty-five percent of her adjusted annual income

as her share of the rent. The balance of the rent is paid to the

landlord by the Department of Community Affairs (DCA), which

administers S-RAP. Prior to October 1, 2015, defendant paid $510

per month in rent and DCA paid $775 per month, for a total monthly

rent payment of $1,285. After October 1, 2015, when defendant was

recertified for participation in S-RAP, she paid $560 per month

and DCA's contribution remained the same, for a total monthly rent

payment of $1,335. Defendant timely paid her portion of the

monthly rent from her social security income.

On August 14, 2015, the landlord filed a summary dispossess

action seeking a judgment of possession for nonpayment of rent for

the month of August 2015, and citing $1,545 as the amount of rent

due and owing. The complaint did not identify defendant as a

rent-subsidized tenant.

A judgment of possession was entered by default on September

21, 2015, after defendant did not appear in court because she was

2 A-1604-15T2 ill. The landlord thereafter submitted a certification in support

of the judgment of possession and requested a warrant of removal.

In response to a phone call from defendant, the landlord advised

defendant by letter that the eviction was based on $1,425 in unpaid

attorney's fees, late fees, and court costs (collectively,

additional rent), which charges were attributable to an earlier

landlord/tenant action against defendant.1

Defendant filed an emergent Order to Show Cause to vacate the

judgment of possession, and it was temporarily stayed. At the

hearing on October 29, 2015, the landlord testified defendant owed

$1,400 in additional rent. The landlord's counsel represented,

however, that $1,806 in additional rent charges were owed by

defendant. Although defendant mentioned that she had a rent

subsidy, the judge affirmed the August 14, 2015 judgment of

possession without reference to the subsidy, finding that

defendant signed a lease, which included provisions for additional

rent charges, and that $1,806 was due and owing.

Defendant filed a second Order to Show Cause, which was heard

on November 16, 2015. Defendant advised the judge she was

1 The earlier landlord/tenant case was dismissed after defendant agreed to permit access to the apartment for pest control treatments.

3 A-1604-15T2 receiving a rent subsidy,2 that she was current on her rent

payments and that it was illegal to evict her for additional rent

charges when her portion of the monthly rent was paid in full.

However, the judge found nothing had changed since the matter was

heard in October, and he again confirmed the entry of the judgment

of possession. Defendant was locked out of the apartment on

November 18, 2015.

On December 11, 2015, defendant appealed the judgment of

possession that had been entered on October 29 and November 16,

2015. Before the trial court, she requested an emergent stay of

the lockout pending appeal, which was granted on December 18,

2015. The trial court then vacated the judgment of possession,

finding that it was improper to evict defendant based on additional

rent charges because she received a rent subsidy.

On January 4, 2016, in a subsequent proceeding in the matter,

the trial court vacated part of its December 18, 2015 order,

finding that to the extent it had vacated the judgment of

possession, it had no jurisdiction to do so because of the pending

appeal. R. 2:9-1(a). The stay of eviction was continued, and

defendant was ordered to continue paying monthly rent.

2 Defendant incorrectly represented that she received assistance under the Section 8 Housing Choice Voucher Program (Section 8 voucher program), 42 U.S.C.A. §§ 1437 to 1437z-9, rather than under S-RAP.

4 A-1604-15T2 On appeal, defendant contends that the trial court erred in

entering a judgment of possession because, as an S-RAP recipient,

she could not be evicted based solely upon unpaid additional rent

charges. Defendant also contends the landlord failed to meet its

burden of proof or to show an entitlement to attorney's fees.3

We agree with the trial judge that by the time the matter was

before him in January 2016, he had lost jurisdiction to vacate the

judgment of possession because defendant had filed an appeal. R.

2:9-1(a). The trial court then had no ability to resolve whether

an S-RAP recipient can be evicted based solely on unpaid additional

rent charges.

Defendant supports her contentions based upon cases

construing the Section 8 voucher program. The landlord contends

that S-RAP is sui generis and not subject to the same restrictions,

citing to a portion of the State's regulations that allows rent

above the payment standard.

We are tasked with deciding whether S-RAP, which "provide[s]

rental assistance grants comparable to the federal [S]ection 8

program," N.J.S.A. 52:27D-287.1, is analogous to the Section 8

3 The judgment of possession was based solely upon additional rent charges. Because of our resolution of the issues, we do not decide the validity of the additional rent charges nor whether the attorney's fees were sought consistent with N.J.S.A. 2A:18-16.67.

5 A-1604-15T2 voucher program in prohibiting the eviction of a tenant solely for

non-payment of additional rent charges.

In a summary dispossess action, "[p]ossession of the premises

is the only available remedy for nonpayment of rent." Hodges v.

Sasil Corp., 189 N.J. 210, 221 (2007). A judgment of possession

may be entered if a landlord can prove "one of the statutorily

enumerated 'good cause' grounds for eviction." Sudersan v. Royal,

386 N.J. Super. 246, 251 (App. Div. 2005) (citing N.J.S.A. 2A:18-

61.1). The nonpayment of rent that is "due and owing under the

lease" is good cause for eviction. N.J.S.A. 2A:18-61.1(a). A

tenant cannot be evicted for the "failure to pay 'tangential fees'

such as 'late charges, attorneys' fees, or costs unless the lease

provides that such fees are collectable as rent.'" Hodges, supra,

189 N.J. at 221 (quoting Cmty. Realty Mgmt. v. Harris, 155 N.J.

212, 242 (1998)).

Generally, a lease is enforced "as it is written, absent some

superior contravening public policy." Hous. Auth. & Urban Redev.

Agency v. Taylor, 171 N.J. 580, 586 (2002). Where the eviction

involves a tenant in a public housing program, "[d]espite the

clear lease provisions, the property . . . is governed by standards

different from those applicable to private landlord/tenant

relations." Id. at 594 (first alteration in original) (quoting

Binghamton Hous. Auth. v. Douglas, 630 N.Y.S.2d 144, 145 (N.Y.

6 A-1604-15T2 App. Div. 1995)). Eviction based on the non-payment of additional

rent may be limited "by rent control ordinances or federal law."

Id. at 587 (citing Harris, supra, 155 N.J. at 242).

Under federal statutes and regulations, Congress has

"defin[ed] and limit[ed] rent for low-income tenants in federally-

subsidized housing programs." Id. at 589. "Central to [the

federal] scheme is the Brooke Amendment, which strictly defines

rent based on a tenant's income . . . as '30 per centum of the

family's monthly adjusted income.'" Ibid. (quoting 42 U.S.C.A. §

1437a(a)(1)).4 Under the controlling federal scheme, the strict

definition of rent cannot be expanded by including additional rent

charges as rent. Id. at 593. Our Supreme Court has held that

state law, which permits additional rent charges that are expressly

referenced in the lease to serve as a ground for eviction for non-

payment of rent, is preempted by federal law. Id. at 595.

We applied that holding to the Section 8 voucher program,

which is "a federal housing subsidy program created . . . to assist

low-income families with affordable housing." Sudersan, supra,

386 N.J. Super. at 249. We saw "no difference" in applying the

Court's holding in Taylor, which involved a public housing program,

4 The Brooke Amendment, 42 U.S.C.A. § 1437a(a)(1), "limits the amount of rent that public housing tenants can be charged." Id. at 252.

7 A-1604-15T2 to the Section 8 voucher program. Id. at 253. "[B]oth [programs]

share the same principle of assisting low income families with

affordable housing; both set an income limit on the amount of rent

collectable by a landlord; and both apply to federally funded

providers of housing of last resort." Ibid. We reasoned that

federal law limited "the amount of rent for which a tenant may be

held responsible." Ibid.

In Sudersan, where the landlord sought to evict based on

utility charges, the "effect" was to increase the defendant's

portion of the rent. Id. at 253-54. We held that "[t]he landlord

may not use the terms of its lease to broaden the definition of

rent to include utility charges, and to then use this broader

definition of rent as a basis for eviction." Id. at 254. To do

so "would increase tenant rent beyond the limit established by the

Brooke Amendment and in excess of the specific portion fixed by

the federal housing subsidy program." Ibid.

Our State rent subsidy program is similar to the Section 8

voucher program. In 2004, the Legislature amended the Prevention

of Homelessness Act (the Act), N.J.S.A. 52:27D-280 to -287, to

create a rental assistance program for low-income individuals and

households to be established and administered by DCA. N.J.S.A.

52:27D-287.1. The Legislature expressly provided that the program

established "shall provide rental assistance grants comparable to

8 A-1604-15T2 the federal [S]ection 8 program" but the program would only be

available to State residents who did not then have a federal

Section 8 voucher. N.J.S.A. 52:27D-287.1(a). If a resident

obtained a Section 8 voucher, their assistance under the State

program would terminate.5 N.J.S.A. 52:27D-287.1(b). In a

statement accompanying the original Senate bill, it was observed

that "[d]ue to cutbacks in federal funding, the availability of

[S]ection 8 vouchers has been severely impacted . . . . Therefore,

there is a pressing need for a State rental assistance program for

low income residents of our State who are on the brink of

homelessness." Senate Cmty. & Urban Affairs Comm., Statement to

S. 357 (June 7, 2004). S-RAP became effective on January 7, 2005.

L. 2004 c. 140, § 6.

DCA adopted implementing regulations in May 2005. 37 N.J.R.

1775(a) (May 16, 2005); see N.J.A.C. 5:42-1.1 to -7.3. Eligibility

was based on federal income guidelines. 37 N.J.R. 165(a) (Jan.

18, 2005). Under the program, the tenant and the landlord enter

into a lease. DCA responded to an inquiry in comments to the

regulations upon adoption that it did not require any specific

form of lease. 37 N.J.R. 1775(a) (May 16, 2005). The tenant is

5 Initially, the Act required that a portion of the grants be reserved for senior citizens who met the income requirements, but the Act was later amended effective in 2008 to include certain veterans.

9 A-1604-15T2 responsible to pay the family share of rent, which is defined as

thirty percent of the household's adjusted annual income, or

twenty-five percent for an elderly and disabled head of household.

N.J.A.C. 5:42-1.2. The S-RAP subsidy is "the difference between

the tenant's rent and the applicable DCA payment standard or the

gross rent, whichever is lower." Ibid.; see also N.J.A.C. 5:42-

2.8(a)(7) (similarly defining "S-RAP subsidy" in providing

instructions on the calculation of the "tenant portion of rent").

The payment standard is the maximum monthly assistance payment for

a family assisted in the program. N.J.A.C. 5:42-1.2.

DCA also enters into a contract with the landlord. Under the

contract,6 DCA agrees to make a monthly housing assistance payment

to the landlord on behalf of the program participant. That payment

is credited by the landlord toward the tenant's monthly rent.

The landlord contends because S-RAP is "comparable," but not

"identical," to the Section 8 voucher program, tenants can be

subject to summary dispossess actions based on the non-payment of

additional rent even if the tenant's portion of the monthly rent

has been paid. The landlord offers no practical reason why a

participant in the State program should be subject to eviction

6 The landlord has included a contract for a period of time that predates the eviction at issue. It was not part of the record before the trial court.

10 A-1604-15T2 while their counterparts in the federal program are not. Both

programs limit the tenant's portion of the rent to thirty percent

of their income.7 Both programs "share the same principle of

assisting low income families with affordable housing; both set

an income limit on the amount of rent collectable by a landlord;

and both apply to . . . providers of housing of last resort."

Sudersan, supra, 386 N.J. Super. at 253. Moreover, S-RAP was

modeled on the federal program. In comment after comment when the

regulations were adopted, DCA referenced as a guide the rules

under the Section 8 voucher program. 37 N.J.R. 1775(a) (May 16,

2005).

The landlord cites to the regulatory definition of

"calculation of family share rent" in support of its position.

Although defining rent as "30 percent based upon the household's

adjusted annual income," the regulation also provides that

"[r]ents above the payment standard may increase the family share

above 30 percent." N.J.A.C. 5:42-1.2. Then, in describing the

calculation of the tenant's portion of the rent and the subsidy,

the regulations define the tenant's portion of the rent as thirty

percent of adjusted income "minus the applicable utility

allowance[] and the difference between the payment standard and

7 Or in defendant's case, twenty-five percent based on age and disability.

11 A-1604-15T2 the contract unit." N.J.A.C. 5:42-2.8(a)(6). The S-RAP subsidy

is "the difference between the tenant rent and either the

applicable payment standard or contract rent whichever is less."

N.J.A.C. 5:42-2.8(a)(7).

Notably, the regulations make no reference to late charges,

attorney's fees or court costs as "rent" within any of these

definitions. The "payment standard" is the housing assistance

payment paid by DCA to the owner up to 110 percent of the fair

market rent. If the tenant elects to reside in a residence that

has total rent above the "payment standard," the tenant will be

responsible to pay this amount.

The landlord is incorrect that this language distinguishes

S-RAP from the Section 8 voucher program. The federal regulations

similarly provide for tenants to pay rent above thirty percent of

adjusted monthly income "where the gross rent of the unit exceeds

the applicable payment standard for the family," providing that

in such situations, "the family share must not exceed forty percent

of the family's adjusted monthly income."8 24 C.F.R. § 982.508

(1999). This federal regulation, like the S-RAP regulation, is

referencing monthly rent and not additional rent charges and thus,

provides no basis to distinguish the programs.

8 S-RAP does not include this forty percent limit.

12 A-1604-15T2 The landlord contends the programs are distinguishable

because defendant's lease was approved by DCA and allowed for

eviction based on the non-payment of additional rent. We observe

first that the landlord never introduced at trial the tenant's

lease or the landlord's contract with DCA, but has included them

in its appendix for the first time on appeal. Even if these are

the operative contracts, they do not change the result.

In a summary dispossess action, the landlord must certify

that "the charges and fees claimed to be due as rent, other than

the base rent, are permitted to be charged as rent by the lease

and by applicable federal, state and local law." R. 6:6-3(b).

Because the regulations define rent as a percentage of the tenant's

income, the lease contravenes these regulations by broadening the

definition of rent beyond that percentage.

The situation is no different than in Sudersan, where we

concluded that the federal system did not permit additional rent

charges to be used for summary eviction because the effect was to

increase tenant rent "in excess of the specific portion fixed by

the federal housing subsidy program." Sudersan, supra, 386 N.J.

Super. at 254. Further, there is no indication that DCA approved

the substance rather than the form of the contract, which in any

event cannot conflict with the State's regulations.

13 A-1604-15T2 As such, we hold that a tenant with an S-RAP voucher cannot

be evicted for non-payment of rent based solely on the failure to

pay additional rent charges under the lease.

The judgment of possession is reversed.

14 A-1604-15T2