Brookchester, Inc., Section 1 v. Ligham
Decision Date | 14 February 1955 |
Docket Number | No. A--88,A--88 |
Citation | 17 N.J. 460,111 A.2d 737 |
Parties | BROOKCHESTER, Inc., SECTION 1, a corporation of the State of New Jersey, et al., Petitioners, v. Chester K. LIGHAM, Director of the Office or Rent Control of the State of New Jersey, Respondent. |
Court | New Jersey Supreme Court |
Walter D. Van Riper, Newark, for petitioners (George I. Marcus, Hackensack, attorney).
Harold Kolovsky, Asst. Atty. Gen., for respondent (Grover C. Richman, Jr., Atty. Gen. of New Jersey, attorney; Anthony Zoppi, Deputy Atty. Gen., on the brief).
James A. Major, Hackensack, of counsel, (Herbert F. Myers, Jr., Hackensack, attorney) for intervenor, Brookchester Community Ass'n.
The opinion of the court was delivered by
This is a petition for declaratory judgment, in lieu of prerogative writ, filed in the Superior Court, Appellate Division, pursuant to R.R. 4:88--10, to review administrative rules (designated herein as 'Change No. 5' and 'Change No. 7') promulgated by the State Rent Control Director, the effect of which was to subject rental housing properties of the petitioners to state rent control under the State Rent Control Act of 1953, L.1953, c. 216, N.J.S. 2A:42--14 et seq., N.J.S.A. Prior to hearing in the Superior Court, Appellate Division, we certified the matter on our own motion for disposition in this court.
The jurisdiction of the court under R.R. 4:88--10 was invoked in this matter in a petition for declaratory judgment filed by Brookchester, Inc., Sections 1 to 10, inclusive, each 'Section' being a separate corporation of the State of New Jersey, and each having its principal office in the City of Hackensack, Bergen County, New Jersey. The respondent is Chester K. Ligham, Director of the Office of Rent Control of the State of New Jersey (hereinafter referred to as the State Director).
Petitions for intervention were filed by 16 other New Jersey corporations namely Stevens Gardens, Inc.; Continental Heights, Inc.; Belle-View Gardens, Inc.; Wright Village, Inc.; The Cambridge, Inc.; Maybrook Gardens, Section Four; Maybrook Gardens, Section Five; Maybrook Gardens, Section Three; Floral Park, Inc.; Floral Park, Section II, Inc.; Woodcliff Gardens, Section I, Inc.; Woodcliff Gardens, Section II, Inc.; Linden Arms, Inc.; Sandford, Inc.; Craigholm, Inc.; and Stanwyck, Inc. Their petitions to intervene were granted by the Superior Court, Appellate Division, and they filed petitions for declaratory judgment herein. The Superior Court, Appellate Division, also granted a petition to intervene filed by a group of tenants organized under the name of Brookchester Community Association.
After intervention of the parties above named, it was stipulated that all the petitioners' housing projects involved in these actions were erected and constructed under and pursuant to the provisions of the National Housing Act which provided for the insurance of mortgage loans on said housing projects by the Federal Housing Administration, and all of these housing accommodations are subject to the liens of such mortgages; that all of said projects were commenced during the year 1948 and completed in the year 1950, under and pursuant to the provisions of the rules and regulations of the National Housing Act, namely under section 608 of Title VI of the Act of June 27, 1934, c. 847, as added May 26, 1942, c. 319, Sec. 11, 56 Stat. 303, and the amendments and supplements thereto (see 12 U.S.C.A., Sec. 1743); that under the National Housing Act the Federal Housing Commissioner (also sometimes referred to in the federal legislation as the Administrator) adopted regulations which included, Inter alia, the following requirement:
(Emphasis supplied.)
The Federal Housing Commissioner's regulations included in the stipulation also required incorporation in the corporate charter or agreement of the following provisions:
'(a) No charge shall be made by the mortgagor for the accommodations offered by the project In excess of a rental schedule to be filed with the Commissioner and approved by him or his duly constituted representative prior to the opening of the project for rental, which schedule shall be based upon a maximum average rental fixed prior to the insurance of the mortgage, and shall not thereafter be changed except upon application of the mortgagor to, and the written approval of the change by, the Commissioner.
(Emphasis supplied.)
It was stipulated that maximum rentals for the petitioners' properties subject to these proceedings have been fixed by the Federal Housing Commissioner, and are in effect; that these properties are located in municipalities which have made the State Rent Control Act of 1953 (N.J.S. 2A:42--14 et seq., N.J.S.A.), supra, operative therein; that these housing projects were exempted from the provisions of the Housing and Rent Act of 1947 (50 App.U.S.C.A., secs. 1892--3) by virtue of the fact that they were erected subsequent to February 1, 1947, and that said housing accommodations were also excepted under the original rules and regulations of the State Director, dated July 31, 1953. These rules and regulations were subsequently changed on April 23, 1954, by Change No. 5, and on May 26, 1954, by Change No. 7, copies of the pertinent portions of each of which orders were incorporated in the stipulation. The pertinent portion of Change No. 5 excepted from the operation of the State Rent Control Act of 1953 (N.J.S. 2A:42--14 et seq., N.J.S.A.) supra, new housing space completed
'(2) on or after August 1, 1953;'
The State Director's order referred to as Change No. 7, ante, added a proviso authorizing decontrol of housing space in properties subjected to control by the above quoted provisions of Change No. 5, ante, conditioned upon application by the landlord on notice to the tenants, and proof by the landlord, that 'there are and have been no manipulative or speculative practices and rental and leasing practices which now tend or have tended to unreasonably increase rentals therein.'
Finally it was stipulated that all of the tenants in the subject projects have leases which include the following terms ...
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