SUMMIT PLAZA ASSOCIATES VS. RAGEE KOLTA, ET AL. (LT-007691-18, HUDSON COUNTY AND STATEWIDE) (A-1305-18T3)
The court addressed whether the unconscionability standard embodied in N.J.S.A. 2A:18-61.1(f) of New Jersey's Anti-Eviction Act is preempted by federal regulations promulgated by the United States Department of Housing and Urban Development (HUD). N.J.S.A. 2A:18-61.1(f) provides that the unconscionability of a rent increase is a defense in a summary dispossess action to removal for cause based on a tenant's failure to pay rent. Relying on the language in the governing HUD regulations, explicitly preempting the entire field of rent regulation, the court held that N.J.S.A. 2A:18-61.1(f) is preempted by the regulations. As a result, HUD-approved rent increases are not reviewable in summary dispossess proceedings, and the trial judge properly precluded evidence challenging the increase as unconscionable. The court also concluded that if the unit in which the tenant resides is subject to a HUD Section 8 housing assistance payments contract, then the operation, management, and maintenance of that unit, including the approval of rent increases, is governed by HUD's regulatory control irrespective of whether the tenant receives a Section 8 housing subsidy.
