Timber Glen Phase III, LLC and Jsm at Timber Glen, LLC Vs.

NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-1775-13T1
TIMBER GLEN PHASE III, LLC,
a New Jersey Limited Liability
Company, and JSM AT TIMBER GLEN,
LLC, a New Jersey Limited Liability
Company, APPROVED FOR PUBLICATION
Plaintiffs-Appellants, August 6, 2015
APPELLATE DIVISION
v.
TOWNSHIP OF HAMILTON, a Municipal
Corporation of the State of New
Jersey,
Defendant-Respondent.
_______________________________
Argued April 20, 2015 - Decided August 6, 2015
Before Judges Lihotz, St. John and
Rothstadt.
On appeal from the Superior Court of New
Jersey, Law Division, Atlantic County,
Docket No. L-0988-12.
Ronald L. Shimanowitz argued the cause for
appellants (Hutt & Shimanowitz, P.C.,
attorneys; Mr. Shimanowitz and Bryan D.
Plocker, on the briefs).
Robert S. Sandman argued the cause for
respondent (Hankin Sandman Palladino &
Weintrob, attorneys; Raymond J. Went, Jr.,
on the brief).
Edward Purcell, Associate Counsel, argued
the cause for amicus curiae New Jersey State
League of Municipalities (Mr. Purcell,
attorney; William J. Kearns, Jr., of
counsel; Mr. Purcell, on the brief).
Sean A. Smith argued the cause for amicus
curiae New Jersey Apartment Association
(Brach Eichler, LLC, attorneys; Charles X.
Gormally, of counsel and on the brief; Mr.
Smith, on the brief).
Robert M. Washburn argued the cause for
amicus curiae New Jersey Builders
Association (Flaster Greenberg, P.C.,
attorneys; Mr. Washburn, of counsel; Emily
Breslin Markos, on the brief).
Barry S. Goodman argued the cause for amicus
curiae New Jersey Realtors (Greenbaum, Rowe,
Smith & Davis, LLP, attorneys; Mr. Goodman,
of counsel and on the brief; Steven B.
Gladis, on the brief).
The opinion of the court was delivered by
LIHOTZ, P.J.A.D.
In this appeal, the parties disagree on the scope of
municipal authority granted by N.J.S.A. 40:52-1 (the Licensing
Act), which empowers municipalities to adopt licensing
ordinances under specific circumstances. Plaintiffs Timber Glen
Phase III, LLC and JSM at Timber Glen, LLC appeal from the
summary judgment dismissal of their complaint in lieu of
prerogative writs that challenged an ordinance adopted by
defendant Township of Hamilton, assessing an annual licensing
fee on residential apartment units.
On appeal, plaintiffs attack the trial judge's legal
interpretation of the Licensing Act as enabling defendant's
2 A-1775-13T1
action and, alternatively, argue the amount of the licensing fee
imposed by defendant's ordinance was arbitrary, capricious and
unreasonable. Several amici appeared and presented arguments
favoring or opposing the authorization to exercise municipal
authority.
Following our consideration of the arguments presented,
viewing the evidential materials in the light most favorable to
plaintiffs, Davis v. Brickman Landscaping, Ltd., 219 N.J. 395,
406 (2014), we conclude the ordinance falls outside the
authority granted to municipal governments under the Licensing
Act. We reverse the grant of summary judgment to defendant as
the licensing ordinance is ultra vires and unenforceable.
The facts are not disputed. Plaintiffs are incorporated in
New Jersey and own apartment buildings in Mays Landing. In
total, the buildings contain 498 units, leased for residential
purposes.
Defendant adopted Ordinance No. 1708-2011 in response to
the findings of its Strategic Planning Smart Growth Committee
(SMART), whose task included issuing recommendations to improve
the quality of life and address safety issues in the township's
residential properties. SMART proposed defendant adopt an
ordinance requiring annual licensing for all residential
properties, specifically designed to "protect . . . tenants
3 A-1775-13T1
[and] . . . landlords who may not have been aware of some of the
activities taking place at the[ir] rental properties." SMART
expressed a goal to place landlords on notice of safety and
habitability issues requiring attention.
The ordinance, entitled "AN ORDINANCE OF THE TOWNSHIP OF
HAMILTON, COUNTY OF ATLANTIC, REQUIRING RESIDENTIAL RENTAL UNIT
LICENSES, TENANT OCCUPANCY PERMITS AND PERIODIC HABITABILITY
INSPECTIONS AND RE-INSPECTIONS," mandated, among other things,
the registration and licensing of apartment units starting
January 1, 2012. The ordinance provided in pertinent part:
222-3. Residential Rental Unit License
Required.
Effective upon adoption of this Ordinance no
person shall occupy any Residential Rental
Unit nor shall the owner permit the
occupancy of any[] residential rental unit
within the Township of Hamilton if said unit
has not been Licensed by the Bureau of Fire
Prevention on forms which shall be provided
for that purpose. Any owner permitting the
occupancy of a Residential Rental Unit
without said License 90 days after the
Adoption of this ordinance shall be in
violation of this ordinance, and each and
every day thereafter shall be deem[ed] a
separate offense.
A "Residential Rental Unit" was defined in 222-1 as:
Any dwelling . . . which the owner rents or
leases to any third party for the purposes
of that third party or parties to reside in
the premises for a period in excess of
thirty days regardless of the term of any
written or verbal lease. . . . Any room or
4 A-1775-13T1
rooms, suite or a part thereof, whether
furnished or unfurnished, which is occupied
or intended, arranged or designed to be
occupied for sleeping or dwelling purposes
. . . .
Other provisions set forth in the ordinance required
disclosure of names, addresses and phone numbers of all owners
and mortgagees, designation of an Atlantic County agent for
owners not located in the county and other unit-specific
information. The license was to be renewed and the $100 per
unit fee paid annually. Failure to obtain or renew the license
prohibited the owner from renting the unit.
Other sections of the ordinance addressed a tenant
occupancy permit, which owners were required to obtain annually
for a $25 fee per unit. Finally, provisions for annual
habitability inspections, which included a fire inspection, were
included with a separate fee of $125.
Plaintiffs filed a complaint in lieu of prerogative writs
seeking a declaratory judgment invalidating the ordinance as
unconstitutional, ordering repayment of all fees collected to
date, awarding attorney's fees and costs of suit and granting
other relief not relevant to this appeal.
Prior to filing its answer, defendant met with plaintiffs
and others affected by the ordinance. Based upon concerns
raised, defendant adopted an amendment under Ordinance No. 1727-
5 A-1775-13T1
2012, eliminating several original provisions, such as the
tenant occupancy permit fee and some tenant registration
requirements. A slightly reduced annual licensing fee was
adopted1 and the habitability inspection requirements were
retained. The modifying ordinance also added a clause stating
licensing fees were not intended as a source of municipal
revenue, but rather all fees generated were designated for
enforcement purposes. Defendant later adopted Ordinance No.
1752-2013, also amending the original ordinance by repealing the
annual habitability inspection provisions.
The Law Division reviewed the matter on the parties' cross-
motions for summary judgment. Plaintiffs argued the ordinance
did not recite the enabling legislation granting defendant
authority to license residential rentals, and argued it did not
fall within a municipality's general police power. Further,
plaintiffs asserted the Licensing Act did not allow defendant to
license and regulate residential apartment buildings with leases
of 175 days or more, as the clear intent of the statute was
directed toward temporary or transient housing and short-term
1
The $100 fee was reduced to $85. In a subsequent
ordinance, the fee was altered to "an amount established by the
Township Committee through [r]esolution annually as to the cost
of licenses during that calendar year." At the time the matter
was heard, the fee was $65 per unit per year, which would be an
annual expense to plaintiffs of $32,370.
6 A-1775-13T1
vacation rentals. Moreover, plaintiffs pointed out the
regulatory ordinance did nothing more than impose another fee on
apartment units, which were already regulated by the Hotel and
Multiple Dwelling Act (HMDA), N.J.S.A. 55:13A-1 to -28, and
local property maintenance and fire ordinances. Finally,
plaintiffs asserted the ordinance burdened tenants by
arbitrarily imposing the constantly changing annual fee,
designed to shift municipal burdens onto landlords and tenants.2
Defendant challenged plaintiffs' contentions, stating the
licensing ordinance was validly enacted under the regulatory
legislative functions of the township and was implemented for a
public purpose, that is, to aid tenants experiencing
inappropriate housing conditions unabated by landlords.
Defendant also cited the HMDA, which provides authority to
license and inspect when a new tenancy commences. Defendant
suggests the HMDA did not prohibit adoption of an ordinance for
more frequent licensing, and as remedial legislation, it must be
liberally construed to permit such ordinances.
The judge, in a memorandum decision accompanying the
November 6, 2013 order, interpreted N.J.S.A. 40:52-1(d) and
2
Plaintiffs raised additional issues before the Law
Division, including constitutional challenges and a demand for
attorney's fees under 42 U.S.C.A. § 1983; however, they chose
not to pursue these issues on appeal.
7 A-1775-13T1
N.J.S.A. 40:48-2.12a as authorizing defendant to license rental
properties. Accordingly, he granted summary judgment to
defendant and dismissed plaintiffs' complaint. This appeal
followed.
Our examination of this statutory interpretation challenge
presents legal questions, warranting de novo review. See Redd
v. Bowman, 433 N.J. Super. 178, 187 (App. Div. 2013), certif.
granted, 217 N.J. 293 (2014). We "owe no deference to the trial
court . . . if [we conclude it has] wrongly interpreted a
statute." Zabilowicz v. Kelsey, 200 N.J. 507, 512 (2009).
In construing the meaning of a statute, our task is well-
defined: we must "determine and effectuate the Legislature's
intent," examining the language used and statutory objectives to
be achieved. Redd, supra, 433 N.J. Super. at 187 (citation and
internal quotation marks omitted). See also N.J.S.A. 1:1-1 ("In
the construction of . . . statutes[,] . . . words and phrases
shall be read and construed with their context, and shall,
unless inconsistent with the manifest intent of the
legislature[,] . . . be given their generally accepted meaning,
according to the approved usage of the language.").
"'Construction of any statute necessarily begins with
consideration of its plain language.'" Mun. Council v. James,
183 N.J. 361, 370 (2005) (quoting Merin v. Maglaki, 126 N.J.
8 A-1775-13T1
430, 434 (1992)). We give plainly written statutes their
"ordinary meaning, absent a legislative intent to the contrary,"
with the understanding the language must be construed "in a
fashion consistent with the statutory context in which it
appears." Ibid. (citations and internal quotation marks
omitted). See also Shelton v. Restaurant.com, Inc., 214 N.J.
419, 428-29 (2013).
If our review finds the statutory provisions are ambiguous,
we are free to examine extrinsic aids, such as legislative
history, to ascertain the Legislature's intended meaning.
Shelton, supra, 214 N.J. 429. In interpreting two seemingly
conflicting sections of the same statute, we must read the
provisions in pari materia, construing them "together as a
unitary and harmonious whole." Am. Fire & Cas. Co. v. N.J. Div.
of Taxation, 189 N.J. 65, 80 (2006) (citations and internal
quotation marks omitted). "Every reasonable construction should
be applied" to assure each section is meaningful. Twp. of
Mahwah v. Bergen Cnty. Bd. of Taxation, 98 N.J. 268, 281, cert.
denied, 471 U.S. 1136, 105 S. Ct. 2677, 86 L. Ed. 2d 696 (1985).
Finally, we keep in mind "every word in a statute has meaning
and is not mere surplusage." Jersey Cent. Power & Light Co. v.
Melcar Util. Co., 212 N.J. 576, 587 (2013) (citations and
internal quotation marks omitted).
9 A-1775-13T1
Guided by these rules, we examine defendant's position
arguing the ordinance followed supportive enabling legislation,
which authorized its imposition of licensing requirements for
rental residential real estate, as well as plaintiffs'
challenges to that asserted authority.
Defendant contends its licensing authority is grounded
generally in a municipality's police power, and, more
specifically, in subsection (d) of the Licensing Act.
Defendant's view is supported by amicus New Jersey State League
of Municipalities (League of Municipalities), which additionally
cites the enforcement provision of the HMDA, N.J.S.A. 55:13A-21,
suggesting licensure is compatible with the regulatory power
over dwelling space upon termination of occupancy found in
N.J.S.A. 40:48-2.12m.
Plaintiffs disagree. Their primary challenge argues
defendant may only regulate apartment rentals for terms less
than 175 consecutive days, as allowed by subsection (n) of the
Licensing Act, because regulation of residential rentals
generally rests with the State under the HMDA, unless otherwise
authorized. Amici New Jersey Builders Association, New Jersey
Realtors, and New Jersey Apartment Association support
plaintiffs' positions.
10 A-1775-13T1
Initially, when reviewing a municipal action, we apply a
presumption of validity and reasonableness to adopted
ordinances. Lake Valley Assocs., LLC v. Twp. of Pemberton, 411
N.J. Super. 501, 505 (App. Div.), certif. denied, 202 N.J. 43
(2010); see also First Peoples Bank v. Twp. of Medford, 126 N.J.
413, 418 (1991) ("[A] reviewing court should presume the
validity and reasonableness of a municipal ordinance."). We do
not "pass on the wisdom of the ordinance; that is exclusively a
legislative function." Pheasant Bridge Corp. v. Twp. of Warren,
169 N.J. 282, 290 (2001), cert. denied, 535 U.S. 1077, 122 S.
Ct. 1959, 152 L. Ed. 2d 1020 (2002). A party challenging an
ordinance must demonstrate the ordinance, "in whole or in
application to any particular property," is arbitrary,
capricious or unreasonable. Id. at 289-90 (citation and
internal quotation marks omitted). Therefore, the "presumption
of validity [cannot] be overcome unless the evidence clearly
establishes its unreasonableness." Twp. of Livingston v.
Marchev, 85 N.J. Super. 428, 432 (App. Div. 1964) (citing
Vickers v. Twp. Comm. of Gloucester Twp., 37 N.J. 232, 242
(1962)), certif. denied, 44 N.J. 412, appeal dismissed, 382 U.S.
201, 86 S. Ct. 393, 15 L. Ed. 2d 269 (1965).
11 A-1775-13T1
The validity of local legislative action is based on the
New Jersey State Constitution Article IV, section VII, paragraph
11, which states:
The provisions of this Constitution and of
any law concerning municipal corporations
formed for local government, or concerning
counties, shall be liberally construed in
their favor. The powers of counties and
such municipal corporations shall include
not only those granted in express terms but
also those of necessary or fair implication,
or incident to the powers expressly
conferred, or essential thereto, and not
inconsistent with or prohibited by this
Constitution or by law.
See also Moyant v. Paramus, 30 N.J. 528, 534 (1959) (discussing
presumptive validity of municipal ordinances). This "[h]ome
rule is basic in our government" and "embodies the principle
that the police power of the State may be invested in local
government to enable local government to discharge its role as
an arm or agency of the State and to meet other needs of the
community." Inganamort v. Ft. Lee, 62 N.J. 521, 528 (1973).
"Express powers as well as those that arise by fair implication
are given broad latitude, so long as they are not wielded in
contravention of the overarching statutory grant of authority or
conflict otherwise with an express statutory limitation or
prohibition." Varsolona v. Breen Capital Servs. Corp., 180 N.J.
605, 625 (2004).
12 A-1775-13T1
The presumption of the validity of local legislative
action, however, is constrained by the obvious understanding
that "[a] statute has supremacy over an ordinance," In re
Ordinance 04-75, 192 N.J. 446, 469 (2007), and "a local
municipality is but a creature of the State, capable of
exercising only those powers granted to it by the Legislature
. . . ." Moyant, supra, 30 N.J. at 535. See also Dome Realty,
Inc. v. Paterson, 83 N.J. 212, 225 (1980) ("[M]unicipalities,
being created by the State, have no powers save those delegated
to them by the Legislature and the State Constitution.").
"Whether the State alone should act or should leave the
initiative and the solution to local government, rests in
legislative discretion." Inganamort, supra, 62 N.J. at 528.
Thus, "the Legislature may invest in local government the police
power to devise measures tailored to the local scene." Ibid.
(emphasis added).
When examining the municipal authority to regulate in the
first instance, the Supreme Court in Inganamort instructed
judicial review of an ordinance requires
three constituent questions: (1) does the
State Constitution prohibit delegation to
municipalities of the power . . . ; (2) if
that power may be granted, has the
Legislature done so; and (3) if the State
statutes vesting police power in
municipalities do embrace this area, is the
exercise of that power by local government
13 A-1775-13T1
preempted or barred by reason of the
existence of other statutes dealing with the
subject matter.
[Id. at 527.]
The general grant defining a municipality's police power is
found in N.J.S.A. 40:48-2. The statute provides:
Any municipality may make, amend,
repeal and enforce such other ordinances,
regulations, rules and by-laws not contrary
to the laws of this state or of the United
States, as it may deem necessary and proper
for the good government, order and
protection of persons and property, and for
the preservation of the public health,
safety and welfare of the municipality and
its inhabitants, and as may be necessary to
carry into effect the powers and duties
conferred and imposed by this subtitle, or
by any law.
[N.J.S.A. 40:48-2.]
The Court has held this statute "authorizes a municipality
to take such action as it deems necessary and proper for the
purposes specified subject only to the limitation that such
action not be prohibited by or inconsistent with the
Constitution or the other statutes . . . ." Moyant, supra, 30
N.J. at 542 (citation and internal quotation marks omitted).
However, "[n]either the constitutional nor the statutory
provision is a blanket authorization to pursue the governing
body's particularized notion of the public good or to legislate
beyond the bestowed powers, express or implied." Repair Master,
14 A-1775-13T1
Inc. v. Borough of Paulsboro, 352 N.J. Super. 1, 8 (App. Div.
2002).
A municipality is also granted specific authority to
regulate local "buildings and structures and their use and
occupation to prevent and abate conditions therein harmful to
the health and safety of the occupants of said buildings and
structures and the general public in the municipality."
N.J.S.A. 40:48-2.12a. Specific statutes address imposing
registration requirements for residences containing two or more
families, N.J.S.A. 40:48-2.12c, and regulating "the maintenance
and condition of any unit of dwelling space, upon termination of
occupancy," N.J.S.A. 40:48-2.12m. These statutes do not
authorize licensure of residential apartments.
Contrary to defendant's and the League of Municipalities'
arguments, the powers to regulate and to license, although
related, are discrete. See, e.g., Moyant, supra, 30 N.J. at 545
("Registration and licensing are commonly accepted as such
reasonable regulatory means . . . ." (emphasis added)). The
Court addressed this distinction in Nelson Cooney & Sons v.
Township of South Harrison, 57 N.J. 384 (1971):
N.J.S.A. 40:52-1 covers a large number of
business and instrumentalities used therein
as the permitted subjects of municipal
licenses. Essentially all are also proper
subjects for police power regulatory
ordinances, authorized by N.J.S.A. 40:48-1
15 A-1775-13T1
and 2. But the latter power does not
include the right to require a license
. . . .
[Bernardsville Quarry v. Borough of
Bernardsville, 129 N.J. 221, 229-30 (1992)
(quoting Nelson, supra, 57 N.J. at 390
n.4).]
See also Colonial Oaks W., Inc. v. E. Brunswick, 61 N.J. 560,
572 (1972) (same).
As identified during the trial court proceedings, defendant
had exercised regulatory authority over apartments. Ordinances
were adopted governing inspection of apartments prior to the
commencement of a new tenancy, assuring maintenance of the
premises and compliance with fire safety.
Because the Legislature has specifically addressed
licensing in Chapter 52 of Title 40, we reject defendant's
overarching proposition suggesting the general police power
regulatory authority, as found in N.J.S.A. 40:48-2 or N.J.S.A.
40:48-2.12m, encompasses the authority to license residential
rental units. See Zullo v. Bd. of Health, 9 N.J. 431, 437
(1952) ("The power to license and to levy fees therefor is not
inherent in local agencies exercising by delegation a portion of
the State's police power and in the absence of statutory grant
does not exist in a municipal corporation . . . ."). Thus, the
authority granted by the State to license rental properties,
which by its nature includes a revenue generating component, is
16 A-1775-13T1
circumscribed by the provisions of the Licensing Act. See
Bernardsville Quarry, supra, 129 N.J. at 229 ("N.J.S.A. 40:52-1
is simply a grant of power allowing municipalities to use
licenses ancillary to its powers to regulate.").
The Licensing Act provides, in pertinent part:
The governing body may make, amend,
repeal and enforce ordinances to license and
regulate:
. . . .
d. Hotels, boardinghouses, lodging and
rooming houses, trailer camps and camp
sites, motels, furnished and unfurnished
rented housing or living units and all other
places and buildings used for sleeping and
lodging purposes, and the occupancy thereof,
restaurants and all other eating places, and
the keepers thereof;
. . . .
n. The rental of real property for a term
less than 175 consecutive days for
residential purposes by a person having a
permanent place of residence elsewhere.
[N.J.S.A. 40:52-1.]
The Legislature's primary purpose in enacting the Licensing
Act was to "authorize municipalities to license and regulate, as
police measures for the public health, safety, morals or
welfare, the local businesses described therein, and only
incidentally to impose on the businesses thus licensed and
regulated license fees for revenue which may, at least within
17 A-1775-13T1
reasonable limits, exceed the regulatory costs." Salomon v.
Jersey City, 12 N.J. 379, 390 (1953). Therefore, a
municipality's exercised licensing authority "cannot be an
arbitrary exertion of th[at] power," Ring v. N. Arlington, 136
N.J.L. 494, 497 (Sup. Ct.), aff'd o.b., 1 N.J. 24 (1948), nor
can the exercise be unreasonable, Indep. Warehouses v. Scheele,
134 N.J.L. 133, 136 (E. & A. 1946), aff'd, 331 U.S. 70, 67 S.
Ct. 1062, 91 L. Ed. 1346 (1947).
In this matter, the parties' primary positions interpreting
the Licensing Act can be summed up as follows: defendant argues
the broad language in subsection (d) encompasses any form of
licensure of rental residences as apartments fall within
"furnished and unfurnished rented housing or living units."
Plaintiffs, on the other hand, reject this sweeping
interpretation, suggesting subsection (d) applies only to
temporary residential uses, drawing support from subsection (n),
which permits licensing authority over short-term residential
rentals, not more permanent dwellings. Plaintiffs argue if
authority to license residential real estate is included within
subsection (d), subsection (n) is rendered superfluous.
On its face, the statute appears to contain an ambiguity,
as the provisions of subsection (d) (directed to "furnished and
unfurnished rented housing or living units and all other places
18 A-1775-13T1
and buildings used for sleeping and lodging purposes, and the
occupancy thereof") would appear to include the subject of
subsection (n) (governing "[t]he rental of real property for a
term less than 175 consecutive days for residential purposes by
a person having a permanent place of residence elsewhere")
N.J.S.A. 40:52-1(d), (n) (emphasis added).
"Applying traditional principles of statutory construction,
we look to the legislative history to aid in determining the
legislative intent of a statute whose plain language is subject
to more than one reasonable interpretation." United Parcel
Serv. Gen. Servs. Co. v. Dir., Div. of Taxation, 220 N.J. 90, 94
(2014) (citation and internal quotation marks omitted). See
also DiProspero v. Penn, 183 N.J. 477, 492-93 (2005) ("[I]f
there is ambiguity in the statutory language that leads to more
than one plausible interpretation, we may turn to extrinsic
evidence, 'including legislative history, committee reports, and
contemporaneous construction.'" (quoting Cherry Hill Manor
Assocs. v. Faugno, 182 N.J. 64, 75 (2004))).
Subsection (d) as originally adopted provided municipal
licensing of "[h]otels, boarding houses, lodging and rooming
houses, and all other places and buildings used for sleeping and
lodging purposes, restaurants and all other eating places, and
the keepers thereof . . . ." L. 1941, c. 92. Thereafter the
19 A-1775-13T1
statute was amended, largely in response to judicial
interpretations.
By 1948, "trailer camps and camp sites" were added. L.
1948, c. 425. See Edwards v. Mayor & Council of Moonachie, 3
N.J. 17, 23 (1949) (concluding "[t]railer camps and camp sites,
in the view of the ordinance, comprise 'places' used for
'sleeping and lodging purposes'" governed by the statute).
The next amendment came on the heels of the Court's denial
of certification of this court's affirmance of a trial judge's
rejection of the scope of subsection (d) to include licensing
apartments. In Boulevard Apartments, Inc. v. Hasbrouck Heights,
86 N.J. Super. 189 (Law Div. 1965), aff'd o.b., 90 N.J. Super.
242 (App. Div.), certif. denied, 47 N.J. 239 (1966), the Law
Division held:
We do not consider an apartment house to be
in the same general or specific class as a
hotel, boarding house, lodging or rooming
house. These are commercial businesses
requiring regulation for the safety, health
and morals of the community. An apartment
house, where unfurnished apartments are
rented for a term, without overnight or
transient business, is in the same category
as a private or two- or three-family
residence.
. . . .
We are cognizant that the statute,
N.J.S.A. 40:52-1(d), contains the words "all
other places and buildings used for sleeping
20 A-1775-13T1
and lodging purposes." We do not consider
apartment houses to be in that category.
[Id. at 193-94.]
Thereafter, subsection (d) was amended to add "motels, furnished
and unfurnished rented housing or living units . . . and the
occupancy thereof." L. 1968, c. 296.
In 1998, subsections (m), relating to rental of commercial
property, and (n), relating to residential rentals, were added.
L. 1997, c. 317. A legislative statement attached to the bill
when introduced, adding this new subsection, stated:
This bill would limit the authority of a
municipality to license the rental of
commercial and residential real property to
leases of less than 125 days. Under current
law, a municipality has the authority to
regulate all leases. This bill would
effectively limit that authority to seasonal
leases, such as weekly rentals in shore
municipalities.
[Ibid.]
The proposal was altered by the Senate Community Affairs
Committee, increasing 125 to 175 days. The amendment as adopted
did not make changes to subsection (d).
Since the 1998 amendment, few opportunities have been
presented for judicial review of these statutory provisions.3
3
In Lake Valley, a municipal ordinance imposing licensing
and inspection requirements upon a change in tenancy of
residential rentals was upheld upon a finding the State did not
(continued)
21 A-1775-13T1
Importantly, none of those cases considered the issue now before
the court.
Obligated as we are to "seek an interpretation that will
make the most consistent whole of the statute," In re Registrant
N.B., __ N.J. __, __ (2015) (slip op. at 28) (citations and
internal quotation marks omitted), we determine the bill
statement accompanying the 1998 amendment serves as powerful
evidence of the objectives and intentions of the Legislature
with respect to licensing residential rentals. We conclude
municipalities are not authorized to issue ordinances imposing
licenses for apartment units which provide tenancies of 175 days
or more.
Aligned with the maxim "expressio unius est exclusio
alterius," which means the inclusion of one excludes the other,
DiProspero, supra, 183 N.J. at 495, we understand the very
specific addition of subsection (n), which limits licensure to
(continued)
preempt the area by enacting the HMDA. Lake Valley, supra, 411
N.J. Super. at 505-07. Licensing authority was not examined.
See ibid. Similarly, in Repair Master, this court struck down
an ordinance regulating the nature of occupancy of rental
property; however, the issue of licensing authority was neither
challenged nor reviewed. Repair Master, supra, 352 N.J. Super.
at 14. Finally, in United Property Owners Association of Belmar
v. Borough of Belmar, 343 N.J. Super. 1, 32 (App. Div.), certif.
denied, 170 N.J. 390 (2001), we upheld the scope of an ordinance
regulating summer beach rentals, based on legislative authority,
including N.J.S.A. 40:52-1(n).
22 A-1775-13T1
residential rentals of "less than 175 consecutive days,"
precludes licensure of residential rentals for 175 days or more.
Further, the Legislature's addition of this discrete provision,
expressly limiting licenses to "rental of real property for a
term less than 175 consecutive days for residential purposes by
a person having a permanent place of residence elsewhere," must
be considered purposeful and made while cognizant of subsection
(d) because "[a] legislative body in this State is presumed to
be familiar . . . with the statutory law of the State . . . ."
Yanow v. Seven Oaks Park, Inc., 11 N.J. 341, 350 (1953). The
bill's interpretative statement reinforces this view and
reflects an explicit intent to limit municipal licensing
authority "to seasonal leases" and, therefore, assures the full
meaning of all statutory provisions. See Jersey Cent. Power &
Light, supra, 212 N.J. at 587 (stating a court must assume
legislative enactments do not use "any unnecessary or
meaningless language" (citation and internal quotation marks
omitted)).
The trial judge did not mention the language or impact of
subsection (n) when rendering his decision. However, we find
this provision critical to the overall understanding of the
scope of statutory authority. Reading the whole of the statute,
we conclude the addition of a separate section directed to
23 A-1775-13T1
short-term or seasonal residential leases suggests temporal
implications when considering the meaning of "furnished and
unfurnished rental units" described in subsection (d). This is
especially true because the other arrangements mentioned in
subsection (d) refer to short-term living (e.g., motels, hotels,
boardinghouses, rooming houses and camp sites). Reading these
two provisions in this way reconciles the Legislature's decision
not to amend subsection (d) when adding subsection (n). See
Shelton, supra, 214 N.J. at 440 ("Words in a statute should not
be read in isolation.")
We cannot agree with defendant and the League of
Municipalities that subsection (n) merely provides another type
of rental housing subject to licensure or was limited to rentals
in resort communities. The interpretative statement to the 1998
amendment refutes these assertions. Were defendant's view
correct, a clarification in (d) would have been sufficient.
Instead, we conclude the addition of (n) was designed and
significant as it reflects a specific intent to limit licensing
of residential rentals, which were viewed differently from the
living arrangements listed in subsection (d).
As we stated above, licensing is a distinct function
authorized by N.J.S.A. 40:52-1. We conclude the Legislature
chose to limit municipal licensing authority to short-term lease
24 A-1775-13T1
arrangements. If that interpretation is incorrect, the
Legislature will act to provide further clarification.
Therefore, defendant may not mandate by ordinance licensure
of residential rentals for 175 days or more, accompanied by an
annual licensing fee. The ordinance mandating this licensure is
invalid as ultra vires and unenforceable.4
We choose not to address plaintiffs' alternative argument,
as we conclude it is moot. Comando v. Nugiel, 436 N.J. Super.
203, 219 (App. Div. 2014) (declining discussion of issue when
controversy is concluded).
We vacate the summary judgment dismissal of plaintiffs'
complaint and reverse the order upholding defendant's licensing
ordinance. We remand this matter to the Law Division for
further proceedings as necessitated by our opinion. We do not
retain jurisdiction.
Reversed and remanded.
4
Our opinion is confined to the authority to license and
does not address defendant's regulatory or inspection authority
granted by other statutes designed to assure rental premises
remain safe, building and fire code compliant and structurally
sound. See Devine v. Mantua Twp., 28 N.J. Super. 299, 305 (Law
Div. 1953).
25 A-1775-13T1