Caldwell Terrace Apartments, Inc. v. Township of Borough of Caldwell

Citations: 224 N.J. Super. 588; 541 A.2d 221; 1988 N.J. Super. LEXIS 129

Court: New Jersey Superior Court Appellate Division; April 14, 1988; New Jersey; State Appellate Court

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The court opinion, delivered by Judge Dreier, addresses cross-appeals regarding a penalty imposed by the Caldwell Rent Leveling Board on the plaintiff for failing to install common-area smoke detectors in a 110-unit apartment building. Initially, the Board assessed a $19,250 penalty, calculated at $175 per unit. The plaintiff sought judicial review and the Law Division judge reduced the penalty to $1,000, determining only one violation had occurred. The defendant appeals for reinstatement of the original penalty while the plaintiff cross-appeals, arguing no penalty should have been assessed.

The court finds the penalty improper, indicating that both municipal and Law Division procedures did not align with applicable laws. The plaintiff had previously held a rent license under an older ordinance and complied with the application requirements of the 1985 Rent Control Ordinance, which mandated specific information regarding the landlord, property, and rent structure. Notably, while compliance with health and safety laws was required for license issuance, the ordinance did not necessitate a certification of such compliance as part of the application process. The ordinance’s penalty provision stipulates fines for violations, including misstatements to the Board, with each housing unit's violation counted separately. Following the issuance of the license, a fire revealed that while internal smoke detectors existed, common areas were unprotected.

The landlord addressed the deficiency of a common-area smoke detection system by contracting for and installing remedial detectors after being informed of the issue. The fire subcode official testified that the municipality did not notify the plaintiff of any violations before the rental license was issued. Only one violation occurred regarding compliance with the ordinance, as the landlord submitted a single application for the rental license, which required compliance with fire and building codes at the time of issuance.

Municipalities have two bases for imposing rent control: the statutory authority under N.J.S.A. 2A:42-74 et seq., allowing for maximum rents and minimum standards for substandard dwellings, and inherent powers to enact rent control, as seen in Inganamort v. Bor. of Fort Lee. The municipality enacted a rent leveling ordinance in 1985, mandating compliance with state safety and housing codes, including requirements for smoke detectors.

Penalties for violations are governed by N.J.S.A. 40:49-5, which allows up to 90 days of imprisonment or fines, but does not permit a rent leveling board to impose such penalties; that authority lies exclusively with the courts. The ordinance cannot authorize administrative officers to adjudicate legal actions, as such powers are judicial. The correct procedure would have been for the Rent Control Board to refer violations to the municipal court for adjudication. Since this proper procedure was not followed, the penalties assessed by the Rent Leveling Board must be vacated.

The Borough argues that the Law Division's assessment of the penalty should be upheld as it has effectively reviewed the violation. However, this position is contested because the Law Division's review was conducted under prerogative writs (R. 4:69-1 et seq.) rather than as a de novo appeal of a municipal court's quasi-criminal ruling (R. 3:23-1 et seq.), which involves different standards of review. Local zoning decisions can only be overturned if found arbitrary, capricious, or unreasonable, and judicial review is permitted only in cases of bad faith or abuse of discretion. Even if a de novo review had occurred, there was no valid municipal proceeding to assess. The issue of whether the plaintiff can still be prosecuted for a municipal ordinance violation after over a year is novel. There is no specific statutory time limit for such violations. Although N.J.S.A. 40:49-5 details penalties, it does not impose a time frame, unlike N.J.S.A. 2C:1-6, which establishes limitations for defined offenses. By analogy, the one-year limitation for disorderly persons offenses should apply to municipal ordinance violations, as it would be unreasonable to allow unlimited prosecution for less severe violations. The judgment of the Law Division is therefore reversed, and the case is remanded for penalties to be vacated and claims for monetary sanctions to be dismissed. It is noted that the plaintiff faced other municipal court complaints and fines. Additionally, the ordinance allows for a maximum fine of $500 or 30 days' imprisonment, which limits what the Law Division could modify. The court also raises doubts about the constitutional authority of the Legislature to create a court within the executive branch, referencing existing laws that establish varying time limitations for motor vehicle offenses.