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Rent Control in Jersey City
Capital Improvement Increase

This Web version COPYRIGHT 2002 GET NJ

No capital improvement rental increase may be passed on to the tenant without a landlord first making an application and having a final approval by the Rent Leveling Board. With the exception of emergencies, the landlord, before proceeding with a major capital improvement is to submit a pre-application to the Office of Tenant/Landlord Relations for the proposed capital improvement which includes cost estimates, together with establishing the allocation for each dwelling unit. Each tenant is to be notified of the pre-application and should be advised of the substance of the proposal, together with their right to request a hearing before the Rent Leveling Board.

The board will determine the conditions of a pre- approval with respect to the improvements, its cost and allocation. Upon completion of the capital improvement, bills, canceled checks and copies of proper permits must be submitted to supplement the pre-application.

After a final hearing before the Hearing Officer, the Rent Leveling Board will review the report and recommendation together with letters of exception before rendering its decision. All major capital improvements may be depreciated over ten (10) years.

A landlord may file for minor capital improvement rental increases. There is no need for a pre-application. Minor capital improvements may be depreciated over five (5) years. The rental increase once approved is considered a surcharge that must terminate after payment of five years.

A capital improvement cost that exceeds the amount of 50% of the assessed value of the building cannot be approved unless the building is in substantial compliance with all relevant property, maintenance and building codes.

Capital Improvement Increases for Vacant Units
In the event of a vacancy, the rent may be increased above the cost of living level only if capital improvements were made to the vacant housing space and only to the extent of the actual cost of those capital improvements. Appropriate permits must be obtained for all work and must be in conformance with applicable city codes.

For capital improvements of up to $5,000 in value, the vacant unit's monthly base rent can be increased by $1.35 per $100 of improvements. Improvements in excess of $5,000 may be increased by $1.55 per $100. Landlords who undertake such capital improvements must register the new rent ($75 per unit filing fee) with the Division of Tenant/Landlord Relations. Their rental registration for the improved units must include the supporting documentation of the costs incurred.

A capital improvement is a permanent improvement that can be claimed by the landlord for depreciation on federal tax returns and adds to the value of the building.

Excluded from this definition are:

  1. Routine repairs and maintenance

  2. Conversion improvements to heat/hot water units for individual apartments where the cost of heat and hot water is transferred to the tenant

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