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Tuesday, July 15, 2014

2A:42-114 Short title. 1.This act shall be known and may be cited as the "Multifamily Housing Preservation and Receivership Act."

2A:42-114  Short title.
1.This act shall be known and may be cited as the "Multifamily Housing Preservation and Receivership Act."

 2A:42-115  Findings, declarations relative to multifamily housing.
2.The Legislature finds and declares that:

a.Many citizens of New Jersey are adversely affected by blighted residential property, including both those who live in buildings that fail to meet adequate standards for health, safety and welfare or fail to meet reasonable housing code standards, and those who live in proximity to such buildings;

b.Substandard and deteriorating buildings are a public safety threat and nuisance, and their blighting effect diminishes health, public safety and property values in the neighborhoods in which they are located;

c.Left to deteriorate over time, these substandard and deteriorating buildings are likely to be abandoned, thereby endangering neighborhood residents and resulting in increased costs to the municipalities in which they are situate;

d.The abandonment of substandard buildings furthermore results in the displacement of lower income tenants, thereby increasing the demand for affordable housing, which is already in short supply, and exacerbating homelessness faced by the citizens of New Jersey;

e.The number of distressed multifamily buildings in the State which could be maintained as safe, affordable housing could be significantly increased if adequate public resources were made available to alleviate negative conditions in the rental housing stock throughout the State;

f.While it is important to provide incentives for landlords to better maintain and improve their properties, it is recognized that there are situations in which it is necessary for other parties to intervene in the operation and maintenance of multifamily buildings, a procedure known as receivership, in order to ensure that they are not abandoned, and that they are maintained as sound, affordable housing, consistent with codes and safety requirements;

g.When receivership becomes necessary, receivership activities and the implementation of receivership plans may be supported by grants and loans to be made available out of a newly-created Preservation Loan Revolving Fund, as provided hereunder; and

h.In order to ensure that the interests of all parties are adequately protected, it is essential that State law provide clear standards and direction to guide the parties with respect to all aspects of receivership.

2A:42-116  Definitions relative to multifamily housing.
3.As used in P.L.2003, c.295 (C.2A:42-114 et al.):

"Agency" means the New Jersey Housing and Mortgage Finance Agency established under section 4 of P.L.1983, c.530 (C.55:14K-4);

"Building" means any building or structure and the land appurtenant thereto in which at least half of the net square footage of the building is used for residential purposes; and shall not include any one to four unit residential building in which the owner occupies one of the units as his or her principal residence;

"Code" means any housing, property maintenance, fire or other public safety code applicable to a residential building, whether enforced by the municipality or by a State agency;

"Commissioner" means the Commissioner of Community Affairs;

"Department" means the Department of Community Affairs;

"Lienholder" or "mortgage holder" means any entity holding a note, mortgage or other interest secured by the building or any part thereof;

"Owner" means the holder or holders of title to a residential building;

"Party in interest" means: (1) any mortgage holder, lien holder or secured creditor of the owner; (2) any tenant living in the building; (3) any entity designated by more than 50 percent of the tenants living in the building as their representative; (4) the public officer; or (5) a non-profit entity providing community services in the municipality in which the building is located;

"Plaintiff" means a party in interest or a qualified entity that files a complaint pursuant to section 4 of P.L.2003, c.295 (C.2A:42-117);

"Public officer" means an officer of the municipality appropriately qualified to carry out the responsibilities set forth in P.L.2003, c.295 (C.2A:42-114 et al.) and designated by resolution of the governing body of the municipality in which the building is located, except that in municipalities organized under the "mayor-council plan" of the "Optional Municipal Charter Law," P.L.1950, c.210 (C.40:69A-1 et seq.), the public officer shall be designated by the mayor;

"Qualified entity" means any person or entity registered with the department on the basis of having demonstrated knowledge and substantial experience in the operation, maintenance and improvement of residential buildings;

"Tenant" means a household that legally occupies a dwelling unit in a residential building.

2A:42-117  Action to appoint receiver.
4.A summary action or otherwise to appoint a receiver to take charge and manage a building may be brought by a party in interest or qualified entity in the Superior Court in the county in which the building is situated.  Any receiver so appointed shall be under the direction and control of the court and shall have full power over the property and may, upon appointment and subject to the provisions of P.L.2003, c.295 (C.2A:42-114 et al.), commence and maintain proceedings for the conservation, protection or disposal of the building, or any part thereof, as the court may deem proper. 

A building shall be eligible for receivership if it meets one of the following criteria:

a.The building is in violation of any State or municipal code to such an extent as to endanger the health and safety of the tenants as of the date of the filing of the complaint with the court, and the violation or violations have persisted, unabated, for at least 90 days preceding the date of the filing of the complaint with the court; or

b.The building is the site of a clear and convincing pattern of recurrent code violations, which may be shown by proofs that the building has been cited for such violations at least four separate times within the 12 months preceding the date of the filing of the complaint with the court, or six separate times in the two years prior to the date of the filing of the complaint with the court and the owner has failed to take action as set forth in section 9 of P.L.2003, c.295 (C.2A:42-122).

A court, upon determining that the conditions set forth in subsection a. or b. of this section exist, based upon evidence provided by the plaintiff, shall appoint a receiver, with such powers as are herein authorized or which, in the court's determination, are necessary to remove or remedy the condition or conditions that are a serious threat to the life, health or safety of the building's tenants or occupants.

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