N.J. Admin. Code § 5:80-26.18

Current through Register Vol. 56, No. 11, June 3, 2024

Section 5:80-26.18 - Enforcement

(a) By accepting State funds for affordable housing purposes, or by submitting to the jurisdiction of COAH, a municipality shall be deemed to have delegated to its administrative agent the day-to-day responsibility for implementing practices and procedures designed to ensure effective compliance with the controls set forth in this subchapter. The municipality, however, shall retain the ultimate responsibility for ensuring effective compliance with this subchapter.

(b) The administrative agent's enforcement responsibility for implementing such practices and procedures shall not be delegated or otherwise transferred to any other party, except to a successor administrative agent. Anything in this subchapter to the contrary notwithstanding, the Agency and DCA each may, in their discretion, contract with for-profit and nonprofit organizations to carry out delegated administrative agent functions, provided, however, that in any such case the Agency or DCA shall maintain primary responsibility for the delegated functions.

(c) The municipality shall:

1. Provide to the administrative agent the name, title and telephone number of the municipal official who shall be responsible for liaison with the administrative agent on all matters related to this subchapter;

2. Ensure that applicable local ordinances are not in conflict with, and enable efficient implementation of, this subchapter;

3. Retain or otherwise designate legal counsel for the purposes of representing any municipal entity acting as administrative agent and of enforcing the controls set forth in this subchapter;

4. Ensure that all restricted units are identified as affordable within the tax assessor's office and any municipal utility authority (MUA). The municipality and MUA shall promptly notify the administrative agent of a change in billing address, payment delinquency of two consecutive billing cycles, transfer of title, or institution of a writ of foreclosure on all affordable units; and

5. Provide all reasonable and necessary assistance in support of the administrative agent's efforts to ensure effective compliance with the controls set forth in this subchapter.

(d) Administrative agent practices and procedures shall include, but shall not necessarily be limited to, the following:

1. Securing from all developers and sponsors of restricted units, at the earliest point of contact in the processing of the project or development, written acknowledgement of the requirement that no restricted unit can be offered, or in any other way committed, to any person, other than a household duly certified to the unit by the administrative agent;

2. Requiring that all certified applicants for restricted units execute a certificate substantially in the form, as applicable, of either the ownership or rental certificates set forth in Appendices J and K;

3. The posting annually in all rental properties, including two-family homes, of a notice as to the maximum permitted rent together with the telephone number of the administrative agent where complaints of excess rent can be made;

4. Annual mailings to all owners of affordable dwelling units, reminding them of the following notices and requirements:

i. If the unit is owner-occupied, that the unit may be resold only to a household that has been approved in advance and in writing by the administrative agent;

ii. That no sale of the unit shall be lawful, unless approved in advance and in writing by the administrative agent, and that no sale shall be for a consideration greater than regulated maximum permitted resale price, as determined by the administrative agent;

iii. That no refinancing, equity loan, secured letter of credit, or any other mortgage obligation or other debt secured by the unit may be incurred except as approved in advance and in writing by the administrative agent, and that at no time will the administrative agent approve any debt, if incurring the debt would make the total of all such debt exceed 95 percent of the then applicable maximum permitted resale price;

iv. That the owner of the unit shall at all times maintain the unit as his or her principal place of residence, which shall be defined as residing at the unit at least 260 days out of each calendar year;

v. That, except as set forth in 5:80-26.18(c)4 vii, at no time shall the owner of the unit lease or rent the unit to any person or persons, except on a short-term hardship basis, as approved in advance and in writing by the administrative agent;

vi. That the maximum permitted rent chargeable to affordable tenants is as stated in the notice required to be posted in accordance with 5:80-26.18(d)3, a copy of which shall be enclosed, and that copies of all leases for affordable rental units must be submitted annually to the administrative agent;

vii. If the affordable unit is a two-family home, that the owner shall lease the rental unit only to certified households approved in writing by the administrative agent, shall charge rent no greater than the maximum permitted rent as determined by the administrative agent, and shall submit for written approval of the administrative agent copies of all proposed leases prior to having them signed by any proposed tenant; and

viii. That no improvements may be made to any unit that would affect its bedroom configuration, except as provided in subsection (a) of 5:80-26.9(a) and in any event, that no improvement made to the unit will be taken into consideration to increase the maximum permitted resale price, except for improvements approved in advance and in writing by the administrative agent;

5. Securing annually from municipalities lists of all affordable housing units for which tax bills are mailed to absentee owners, and notifying all such owners that they must either move back to their unit or sell it;

6. Establishing a program for diverting unlawful rent payments to the municipality's affordable housing trust fund or other appropriate municipal fund approved by the DCA. For purposes of this subsection, unlawful rent payments shall mean:

i. All rent monies paid by a person who has not been duly certified in accordance with the provisions of 5:80-26.16;

ii. All rent paid by a person or persons renting an ownership unit from an owner who has moved out of his or her unit illegally;

iii. Rent paid by a lawful tenant in excess of amounts permitted by law; and

iv. Rent paid to an affordable owner who is claiming a hardship, when the owner has not received prior authorization from the administrative agent as is provided for under the provisions of 5:80-26.7(a); and

7. Establishing a rent-to-equity program, to be implemented in situations where an affordable owner has unlawfully rented out his or her unit, and where the tenant has entered into a tenancy without knowledge of its unlawful nature. Under such rent-to-equity program, the tenant, including the immediate family of such tenant, shall be given an opportunity to purchase the unit from the affordable owner, and the affordable owner shall be compelled to sell the unit to the tenant, with the total of all rent paid to the owner being credited to tenant as down payment money paid to the affordable owner. Anything herein to the contrary notwithstanding, any person offered a unit under such a rent to equity program must first be certified as eligible under the provisions of 5:80-26.16.

(e) Banks and other lending institutions are prohibited from issuing any loan secured by owner-occupied real property subject to the affordability controls set forth in this subchapter, if such loan would be in excess of amounts permitted by the restriction documents recorded in the deed or mortgage book in the county in which the property is located. Any loan issued in violation of this subsection shall be void as against public policy.

(f) The Agency, COAH and the DCA hereby reserve, for themselves and for each administrative agent appointed pursuant to this subchapter, all of the rights and remedies available at law and in equity for the enforcement of this subchapter.

N.J. Admin. Code § 5:80-26.18

Recodified from N.J.A.C. 5:80-26.17 and amended by R.2004 d.475, effective 12/20/2004.
See: 36 N.J.R. 3655(a), 36 N.J.R. 5713(a).
Rewrote the section. Former N.J.A.C. 5:80-26.18, Appeals, recodified to N.J.A.C. 5:80-26.19.