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SUPREME COURT OF NEW JERSEY
DOCKET NO. 50,557
HOUSING AUTHORITY & URBAN
CIVIL ACTION
REDEVELOPMENT AGENCY OF
THE CITY OF ATLANTIC CITY, ON PETITION FOR CERTIFICATION FROM
Plaintiff-Respondent, THE FINAL JUDGMENT OF THE NEW
vs. JERSEY SUPERIOR COURT, APPELLATE
DIVISION
VANESSA TAYLOR,
Defendant-Petitioner.
SAT BELOW:
JUDGES STEPHEN SKILLMAN and
ERMINIE L. CONLEY, J.A.D.
PETITION FOR CERTIFICATION AND APPENDIX
OF DEFENDANT-PETITIONER VANESSA TAYLOR
DOUGLAS E. GERSHUNY, EXECUTIVE DIRECTOR
CAPE-ATLANTIC LEGAL SERVICES, INC.
26 SO. PENNSYLVANIA AVENUE
ATLANTIC CITY, NEW JERSEY 08401
PHONE: (609) 348-4200, EXT. 17
i
ATTORNEYS FOR DEFENDANT-PETITIONER
Of Counsel:
KENNETH M. GOLDMAN, ESQUIRE
On the Petition:
KENNETH M. GOLDMAN, ESQUIRE
ii
TABLE OF CONTENTS
[Page]
TABLE OF CONTENTS............................................ i
TABLE OF CITATIONS...........................................ii
STATEMENT OF MATTER INVOLVED..................................1
QUESTIONS PRESENTED...........................................5
ERRORS COMPLAINED OF..........................................5
REASONS FOR CERTIFICATION.....................................7
THIS APPEAL PRESENTS A QUESTION OF GENERAL
PUBLIC IMPORTANCE, CONCERNING EVICTION OF
PUBLIC HOUSING TENANTS IN NEW JERSEY CONTRARY
TO FEDERAL LAW, WHICH HAS NOT BEEN
BUT SHOULD BE RESOLVED BY THE SUPREME COURT.............8
THE APPELLATE DIVISION’S DECISION BELOW DEEMING
ATTORNEYS’ FEES AND LATE CHARGES AS “ACCURED
COSTS” UNDER N.J.S.A. 2A:18-55 CONFLICTS WITH
PREVIOUS REPORTED APPELLATE
DIVISION AND SUPREME COURT DECISIONS...................11
COMMENTS AS TO APPELLATE DIVISION OPINION....................12
THE APPELLATE DIVISION ERRED IN HOLDING THAT THE
ATLANTIC CITY HOUSING AUTHORITY DID NOT VIOLATE
FEDERAL LAW GOVERNING PUBLIC HOUSING BY
DEFINING ATTORNEYS' FEES AND LATE CHARGES
IN ITS LEASE AS ADDITIONAL RENT.......................12
THE APPELLATE DIVISION ERRED IN HOLDING THAT
FEDERAL LAW LIMITING THE MAXIMUM RENT PAYABLE
BY PUBLIC HOUSING TENANTS DID NOT PREEMPT STATE
CONTRACT LAW ALLOWING LANDLORDS TO DEFINE
ATTORNEYS' FEES AND LATE
CHARGES IN LEASES AS ADDITIONAL RENT..................19
CONCLUSION...................................................20
CERTIFICATION OF COUNSEL.....................................20
iii
APPENDIX
[Page]
Notice of Petition for Certification
Filed November 15, 2000.................................1a
Written Opinion by Appellate Division
October 26, 2000........................................4a
Transcript of Trial Court’s Oral Decision
July 27, 1999.........................................13a
Connolly, Report to Governor’s Landlord Tenant
Task Force, N.J. Dept. of Community Affairs
March 3, 2000..........................................21a
iv
TABLE OF AUTHORITIES
[Page]
STATE CASES
Binghamton Housing Authority v. Douglas,
217 A.D.2d 897, 630 N.Y.S.2d 144
(N.Y. App Div. 1995) ........................... 7, 9, 14-16, 18
Community Realty Management, Inc. v. Harris,
155 N.J. 212 (1998) ................................. 1, 6, 8-11
Housing Authority and Urban Redevelopment Agency
of the City of Atlantic v. Taylor,
334 N.J. Super. 573 (App. Div. 2000) .................... passim
Housing Authority of Morristown v. Little,
135 N.J. 274 (1994) ......................................... 20
University Court v. Mahasin,
166 N.J. Super. 551 (App. Div. 1979) .................. 1, 6, 11
FEDERAL CASES
Aujero v. CDA Todco, Inc.,
756 F.2d 1374 (9th Cir. 1984) ............................... 16
Beckman v. New York City Housing Authority,
755 F.2d 1074 (2nd Cir. 1985) ............................... 14
Crochet v. Housing Authority of Tampa,
37 F.3d 607 (11th Cir. 1994) ................................ 14
Hanrahan v. Housing and RedevelopmentAuthority of Duluth,
912 F. Supp. 428 (D. Minn. 1995),
aff'd, 86 F.3d 1159 (9th Cir. 1996) ..................... 14, 16
Miles v. Metropolitan Dade County,
916 F.2d 1528 (11th Cir. 1990),
cert. denied, 502 U.S. 898 (1991) ................. 7, 9, 16, 18
Wisconsin Public Intervenor v. Mortier,
501 U.S. 597 (1991) ......................................... 19
Wright v. Roanoke Redevelopment & Housing Authority,
479 U.S. 418 (1987) ......................................... 14
v
[Page]
FEDERAL CONSTITUTUIONAL PROVISIONS
Supremacy Clause, U.S.Const., Art. VI, cl.2................... 19
STATE STATUTES
N.J.S.A. 2A:18-55................................. 1, 3, 5, 6, 11
N.J.S.A. 2A:18-61.1(a)......................................... 6
FEDERAL STATUTES
Brooke Amendment, 42 U.S.C. § 1437a(a)(1)................. passim
42 U.S.C. § 1437a(a)(2)....................................... 16
42 U.S.C. § 1983.............................................. 14
Quality Housing and Work Responsibility Act of 1998,
Pub. L. No. 105-276, 112 Stat. 2461, tit. V
(Oct. 21, 1998) ......................................... 16, 17
FEDERAL REGULATIONS
24 C.F.R. § 5.603......................................... 16, 17
24 C.F.R. § 5.613............................................. 16
24 C.F.R. § 5.613(a)....................................... 16-18
24 C.F.R. § 5.628.............................................. 7
24 C.F.R. § 5.628(a).......................................... 17
24 C.F.R. § 5.628(a)(4)....................................... 17
24 C.F.R. § 5.630............................................. 17
24 C.F.R. § 960.253........................................... 17
24 C.F.R. § 960.253(c)(3).............................. 7, 17, 18
24 C.F.R. § 966.4(b).......................................... 18
65 Fed. Reg. 16716 (March 29, 2000)........................... 17
vi
HUD Handbook 4350.3........................................... 10
[Page]
MISCELLAENOUS
Connolly, Report to Governor’s Landlord Tenant Task Force,
N.J. Dept. of Community Affairs (March 3, 2000) ............. 8
vii
STATEMENT OF MATTER INVOLVED
This matter involves whether public housing tenants, who pay
their rent arrears, can nevertheless be evicted for nonpayment of
late charges and attorneys fees. The Appellate Division ruled that
under both federal and state 1 law public housing tenants can be
evicted for nonpayment of miscellaneous charges, such as late fees
and attorneys fees. The issue before the Court is whether such
charges can be the basis for eviction in light of the Brooke
Amendment, 42 U.S.C. § 1437a(a)(1), which strictly defines and limits
the rents of public housing tenants.
This Court has never addressed the question whether federal law
under the Brooke Amendment and its implementing regulations
prohibits such evictions. This Court’s resolution of this issue is
critical for thousands of low-income families in New Jersey who,
without federally subsidized housing, cannot afford a place to live.
Due to the Appellate Division’s decision, these families now face
1
The decision is reported at Housing Authority & Urban
Redevelopment Agency of the City of Atlantic v. Taylor, 334 N.J.
Super. 573 (App. Div. 2000). (Pta3). Unlike the trial judge, who
found that late charges and attorneys fees were additional rent, the
Appellate Division ruled that they were “accrued costs” required to
be paid to avoid eviction under N.J.S.A. 2A:18-55. Taylor, at 576,
578. In doing so, the Appellate Division’s decision conflicts with
previous Appellate Division and Supreme Court decisions that such
charges can be the basis of eviction in New Jersey only if defined
as “rent” in leases. See University Court v. Mahasin, 166 N.J. Super.
551 (App. Div. 1979); Community Realty Management, Inc. v. Harris,
155 N.J. 212 (1998). (See Petitioner’s petition, infra, at 6, 11).
1
the increased threat of eviction and loss of their subsidized
housing.
Petitioner, Vanessa Taylor, is a public housing tenant residing
at 1513 Westminister Place, Atlantic City, New Jersey, in the Stanley
Holmes public housing development owned and operated by
plaintiff-respondent, Housing Authority & Urban Redevelopment Agency
of the City of Atlantic City (ACHA). Ms. Taylor, a longtime tenant,
has resided there for approximately 15 years and lives with her seven
children in a three-bedroom apartment. (T3-18 to T3-25). In April
1999, Ms. Taylor was employed and her rent was $324.00 a month, which
was based upon 30% of her adjusted gross monthly income in accordance
with federal law defining public housing rents. (T3-25 to T4-4).
Ms. Taylor fell behind in her rent beginning in February 1999.
The ACHA subsequently sued Ms. Taylor for eviction for nonpayment
of rent. As of the court date on April 30, 1999, Ms. Taylor owed three
months rent arrears totaling $972.00. (T4-5 to T4-10). The ACHA also
demanded in its complaint that Ms. Taylor pay an additional $164.50
for other charges. This consisted of $20.00 for late fees, $53.50 for
“previous” court costs and attorneys’ fees, and $91.00 for “current”
court costs and attorneys’ fees.2 (T4-10 to T4-12); (Da11). The ACHA
2
The ACHA did not separately list in its complaint the specific
breakdown between attorneys’ fees and court costs. (Da11). However,
the filing fee designated on the summons was $21.00 (Da9). Thus, of
the combined $144.50 for “previous” and “current” attorneys’ fees
and court costs, only the $21.00 filing fee can be considered as
(. . .continued on next page)
2
had designated these other charges as additional rent under its lease
with Ms. Taylor. (T7-3 to T7-19); (Da58).
On the court date, Ms. Taylor had in her possession and was
willing to pay all of the $972.00 rent arrears. She could not, though,
pay all of the extra charges. The ACHA, however, insisted that Ms.
Taylor pay all of the additional charges on the court date in order
for the eviction case against her to be dismissed. (Da14). If she
failed to pay the additional charges, the ACHA argued that she should
be evicted and that a judgment for possession should enter.
Ms. Taylor contended that these charges could not be considered
rent under federal law, and that she therefore did not have to pay
them on the return date to dismiss the action. The parties then
stipulated that Ms. Taylor would deposit with the court clerk the
entire rent arrears of $972.00, to be held pending the trial court's
decision on the issue. The parties agreed that she did not have to
deposit the $164.50 in extra charges. (T4-13 to T4-15).
On July 27, 1999 the trial court ruled from the bench that the
ACHA was permitted under federal law to assess such miscellaneous
charges as rent in the pending eviction action. (T9-13 to T12-4).
The trial court entered a judgment of possession against Ms. Taylor
and ordered her to deposit the additional $164.50 the next day to avoid
“accrued costs” of this particular action under N.J.S.A. 2A:18-55,
with the remaining $123.50 being claimed as additional rent.
3
the warrant of removal being issued. (T13-17 to T13-22); (Da7; Da8).
Ms. Taylor deposited the money as ordered.3
On October 15, 1999, Ms. Taylor filed a notice of appeal with
the Appellate Division. (Da1). On October 26, 2000 the Appellate
Division affirmed the trial court’s decision, but did so upon other
grounds. Housing Authority and Urban Redevelopment Agency of the City
of Atlantic v. Taylor, 334 N.J. Super. 573, 580-81 (App. Div. 2000).
The trial court had held that federal law did not bar the ACHA from
charging Ms. Taylor with attorneys’ fees and late charges as
“additional rent” under the lease. (T9-13 to T10-20). The Appellate
Division, however, found that these charges were owed under state
law not as “rent,” Taylor, at 578, but as “accrued costs” Id. at 576,
and “additional costs,” Id. at 578, incurred upon default and filing
of the eviction action. The Appellate Division thus held that state
law, as the Appellate Division had so interpreted, did not conflict
with federal law prohibiting housing authorities from defining such
miscellaneous charges as rent. Id. at 580.
3
Ms. Taylor could pay the $164.50 only because she saved it up
during the three months this issue was being briefed by the parties
and decided by the trial court. She also continued to pay her monthly
rent during that time. However, had Ms. Taylor been ordered to pay these
additional charges on the original court date in accordance with the
Appellate Division’s decision, she would have been evicted, losing her
subsidized housing of 15 years and rendered homeless with her seven
children. The Appellate Division downplays such draconian
consequences of its reported decision, Taylor, at 575, which has now
become the harsh reality confronting all federally subsidized tenants
in New Jersey.
4
QUESTIONS PRESENTED
1. Can attorneys’ fees and late charges be considered
“additional costs” within the meaning of the “accrued costs” that
tenants must pay to avoid eviction under N.J.S.A. 2A:18-55?
2. Does federal law, which defines and limits the maximum rent
payable by public housing tenants, preempt state contract law, which
permits landlords to characterize attorneys’ fees and late charges
as “additional rent” in leases and sue to evict for nonpayment of
such additional rent?
ERRORS COMPLAINED OF
The Appellate Division fundamentally misconstrued both state
and federal law governing the definition and payment of “additional
rent” in the public housing context. Regarding state law, the
Appellate Division erred in holding that tenants’ payment of late
and attorneys’ fees to avoid entry of a judgment for possession under
N.J.S.A. 2A:18-55 is required as part of the “accrued costs” of
eviction proceedings, rather than as part of the “rent claimed to
be in default” under tenants’ leases. Taylor, supra, at 576, 578.
Regarding federal law, the Appellate Division erred in holding that
public housing authorities, like private landlords, may sue to evict
for attorneys’ fees and late charges in nonpayment of rent summary
dispossess actions.
In New Jersey, tenants may statutorily avoid eviction for
nonpayment of rent by paying to the court clerk on the trial date
5
the “rent claimed to be in default, together with the accrued costs
of the proceedings.” N.J.S.A. 2A:18-55. Landlords generally cannot
evict tenants for nonpayment of attorneys’ fees and late charges.
N.J.S.A. 2A:18-61.1(a). However, New Jersey laws governing eviction
nowhere define “rent,” leaving the matter to the bargain struck by
the parties, subject to public policy limitations. As a matter of
contract law, landlords may thus define payment of attorneys’ fees
and late fees in leases as “additional rent.” In such cases, these
charges become part of the rent in default that tenants must pay to
avoid eviction under N.J.S.A. 2A:18-55. See University Court v.
Mahasin, 166 N.J. Super. 551 (App. Div. 1979); Community Realty
Management, Inc. v. Harris, 155 N.J. 212 (1998). The Appellate
Division’s mischaracterization of late and attorneys’ fees as
“accrued costs” N.J.S.A. 2A:18-55 is therefore contrary to state law.
Furthermore, in the public housing context, there exists a clear
and unambiguous federal statutory definition of “rent” under 42
U.S.C. § 1437a(a)(1), commonly known as the Brooke Amendment, which
strictly defines and limits the rent payable by public housing
tenants. See also 24 C.F.R. § 5.628; 24 C.F.R. § 960.253(c)(3).
Federal statutory and regulatory law not only defines rent, but also
prohibits housing authorities from defining miscellaneous charges,
such as attorneys’ fees and late charges, as rent or additional rent
in leases. See Miles v. Metropolitan Dade County, 916 F.2d 1528 (11th
Cir. 1990), cert. denied, 502 U.S. 898 (1991); Binghamton Housing
6
Authority v. Douglas, 217 A.D.2d 897, 630 N.Y.S.2d 144 (N.Y. App Div.
1995). Federal law, therefore, preempts state contract law, and
housing authorities cannot sue to evict for nonpayment of rent for
attorneys’ fees and late charges, even if those charges are
designated as “additional rent” in leases according to state law.
The Appellate Division therefore erred in holding that state contract
law did not conflict with federal law restricting public housing
tenants’ rents. Taylor, at 580.
REASONS FOR CERTIFICATION
Special reasons exist why the Court should grant certification
to review the Appellate Division’s final judgment below. R. 2:12-4.
First, this appeal presents a question of general public importance
that has not been but should be settled by this Court. Second, the
Appellate Division’s decision conflicts with other reported
Appellate Division and Supreme Court decisions. R. 2:12-4. These
reasons are discussed below.
THIS APPEAL PRESENTS A QUESTION OF GENERAL
PUBLIC IMPORTANCE, CONCERNING EVICTION OF
PUBLIC HOUSING TENANTS IN NEW JERSEY CONTRARY
TO FEDERAL LAW, WHICH HAS NOT BEEN BUT SHOULD
BE RESOLVED BY THE SUPREME COURT.
In New Jersey, more than 45,000 families rent apartments in
governmentally owned and operated public housing developments. An
additional 75,000 New Jersey families live in privately owned,
federally assisted housing developments. See Connolly, Report to
Governor’s Landlord Tenant Task Force, N.J. Dept. of Community
7
Affairs (March 3, 2000) (Table 1). (Pta21-22). These low-income
families depend upon their subsidized rents in order to afford their
apartments. The Appellate Division’s decision, permitting eviction
of federally subsidized tenants for nonpayment of rent for attorneys’
fees and late charges, seriously jeopardizes these families’ ability
to keep their homes. Indeed, this Court has recognized that landlords
renting federally subsidized housing “must be charged with the
knowledge of the substantial impact a few extra dollars for late
charges will have on their tenants' budgets and consequent abilities
to avoid eviction for non-payment of rent." Community Realty
Management, Inc. v. Harris, 155 N.J. 212, 232 (1998).
This Court in Harris, however, did not directly address the
issue presented by this appeal. Harris dealt primarily with
overhauling state landlord-tenant court procedures to ensure that
pro se tenants are afforded with basic due process and fairness in
eviction proceedings uniformly throughout the state. Harris left
unanswered the question here, whether federal law, strictly defining
and limiting rents under the Brooke Amendment, 42 U.S.C. §
1437a(a)(1), and implementing regulations, prohibits eviction of
federally subsidized tenants for nonpayment of attorneys’ fees and
late charges as “additional rent.” Under the Brooke Amendment,
public housing authorities cannot charge tenants in public housing
more than 30% of their adjusted gross monthly income as rent. See
Miles v. Metropolitan Dade County, 916 F.2d 1528(11th Cir. 1990),
8
cert. denied, 502 U.S. 898 (1991); Binghamton Housing Authority v.
Douglas, 217 A.D.2d 897, 630 N.Y.S.2d 144 (N.Y. App Div. 1995).
Indeed, because the Court did not address the Brooke Amendment
rent limitations in Harris, the Court’s treatment of federal law in
Harris is incomplete and inconsistent. For instance, the Court had
ordered, as part of the Harris pro se curative instructions, that
tenancy courts recite at the calendar call the following
instructions:
A landlord is not entitled to evict based upon
failure to pay any attorneys' fees, costs or
late charges, unless there is a lease provision
which states that such fees are collectible as
rent. Even if there is such a provision in the
lease, the amount due as rent may be limited by
a rent control ordinance, or in the case of
public or federally-assisted housing, by
federal law.
Harris, at 242 (emphasis added). The Court did not, though, examine
or explain the federal law limiting public and federally-assisted
tenants’ rents under the Brooke Amendment and implementing
regulations.4 Moreover, the Court’s specific factual holding that
the federally-assisted tenant in Harris had to pay $17.50 for damages
4
The Court only considered part of HUD Handbook 4350.3
concerning privately owned, federally-assisted developments.
Harris, at 233-34. This HUD Handbook, however, does not apply to
public housing at issue in the present matter. See Section 1-2, HUD
Handbook 4350.3. Further, the Court did not examine the sections of
the HUD Handbook defining subsidized tenants’ rents, which
incoporate the Brooke Amendment limitations. See Chapter 3, HUD
Handbook 4350.3. By reviewing the HUD Handbook outside of Brooke
(. . .continued on next page)
9
and $25.00 for contract costs as part of the rent necessary to avoid
eviction, Id. at 236, is at odds with the Court’s instructions quoted
above.
Importantly, Harris gives no guidance concerning the facts
here, where a public housing tenant is willing to pay all rent arrears
on the court date to avoid eviction, but the housing authority demands
further payment of late and attorneys’ fees as additional rent. This
Court should thus grant certification to clarify the relevant federal
law to settle whether the Brooke Amendment and implementing
regulations prohibit housing authorities from evicting for
nonpayment of such miscellaneous charges as additional rent.
THE APPELLATE DIVISION’S DECISION BELOW DEEMING
ATTORNEYS’ FEES AND LATE CHARGES AS “ACCURED
COSTS” UNDER N.J.S.A. 2A:18-55 CONFLICTS WITH
PREVIOUS REPORTED APPELLATE DIVISION AND
SUPREME COURT DECISIONS.
The Appellate Division’s holding that attorneys’ fees and late
charges are part of the “accrued costs” under N.J.S.A. 2A:18-55
conflicts with the decision in University Court v. Mahasin, 166 N.J.
Super. 551 (App. Div. 1979). The Appellate Division in Mahasin held
that attorneys’ fees are not accrued costs of summary dispossess
actions under N.J.S.A. 2A:18-55, but rather, as a matter of state
contract law, can be the basis of eviction only if defined as
“additional rent” in a lease:
[S]ince Title 22A does not authorize an allowance
of counsel fees as part of the statutory costs in
a dispossess action, payment of a counsel fee can
Amendment’s statutory framework, the Court’s analysis of federal law
in Harris is thus incomplete.
10
be required . . . only to the extent that such a
fee can be considered as part of the rent due and
owing. . . . [and] only if the lease so provides.
Mahasin, at 554-55. The Appellate Division’s decision below further
conflicts with this Court’s opinion in Community Realty Management,
Inc. v. Harris, 155 N.J. 212, 242 (1998), which cited Mahasin with
approval and adopted Mahasin’s formulation of state law. "A landlord
is not entitled to evict based upon failure to pay any attorneys'
fees, costs or late charges, unless there is a lease provision which
states that such fees are collectible as rent." Harris, at 242.
By misconstruing “additional costs” with “additional rent, the
Appellate Division not only violated state law but also misapplied
federal law under the Brooke Amendment. By erroneously deeming late
and attorneys’ fees as additional costs, the Appellate Division
avoided applying the Brooke Amendment’s rent restrictions to the ACHA
lease, which unmistakably defined these miscellaneous charges as
rent.
COMMENTS AS TO APPELLATE DIVISION OPINION
THE APPELLATE DIVISION ERRED IN HOLDING THAT THE
ATLANTIC CITY HOUSING AUTHORITY DID NOT VIOLATE
FEDERAL LAW GOVERNING PUBLIC HOUSING BY
DEFINING ATTORNEYS' FEES AND LATE CHARGES IN ITS
LEASE AS ADDITIONAL RENT.
In it is decision below, the Appellate Division incorrectly
asserted that "[d]efendant does not dispute or raise any issue as
to the existence and validity of the governing lease provisions which
provide for late fees, attorneys' fees, and court costs in the event
11
of a nonpayment of rent and a summary dispossess action" or "that
these lease charges are prohibited by the governing federal public
housing law." Housing Authority & Urban Redevelopment Agency of the
City of Atlantic v. Taylor, 334 N.J. Super. 573, 575-76 (App. Div.
2000).
Quite the contrary. In her appellate brief, petitioner had
argued vigorously that the ACHA lease provisions violated federal
law because the ACHA had defined attorneys' fees and late charges
as being additional rent. On Page 5 of petitioner's appellate brief,
for instance, petitioner argued that "federal law does indeed
prohibit public housing authorities from deeming such miscellaneous
charges as 'rent,' and that the trial court in this matter had
misinterpreted the relevant federal law in permitting the ACHA to
charge late fees, attorney's fees and costs as additional rent."
(Db5).
In affirming the trial court, the Appellate Division
misconstrued the relevant federal law, particularly the maximum rent
limits payable by public housing tenants that Congress has
established under the Brooke Amendment, 42 U.S.C. § 1437a(a)(1). The
Brooke Amendment provides in relevant part:
(1) . . . . [A] family shall pay as rent for
a dwelling unit assisted under this chapter. .
. the highest of the following amounts, rounded
to the nearest dollar:
(A) 30 per centum of the family’s monthly
adjusted income;
12
(B) 10 per centum of the family’s monthly
income; or
(C) if the family is receiving payments for
welfare assistance from a public agency
and a part of such payments, adjusted in
accordance with the family’s actual
housing costs, is specifically designated
by such agency to meet the family’s housing
costs, the portion of such payments which
is so designated.
42 U.S.C. § 1437a(a)(1) (emphasis added).
Cases construing the Brooke Amendment under 42 U.S.C. §
1437a(a)(1) continually have recognized the maximum rental amounts
chargeable to tenants under the statute. See Wright v. Roanoke
Redevelopment & Housing Authority, 479 U.S. 418 (1987); Binghamton
Housing Authority v. Douglas, 217 A.D.2d 897, 630 N.Y.S.2d 144 (N.Y.
App. Div. 1995).
In Wright, the U.S. Supreme Court held that public housing
tenants could bring suit under 42 U.S.C. § 1983 to enforce such rent
limits. In reviewing the operation of the Brooke Amendment, the Court
observed that in 1969, "the Housing Act [of 1937] was amended in a
fundamental respect: the Brooke Amendment imposed a ceiling for rents
charged to low-income people living in public housing projects, and,
as later amended, provides that a low-income family 'shall pay as
rent' a specified percentage of its income." Wright, at 420
(citations omitted). See also Crochet v. Housing Authority of Tampa,
37 F.3d 607, 612 (11th Cir. 1994) ("Brooke Amendment. . . provides
13
that a tenant's rent may not exceed a fixed percentage of his or her
income"); Hanrahan v. Housing and Redevelopment Authority of Duluth,
912 F. Supp. 428, 437 (D. Minn. 1995), aff'd, 86 F.3d 1159 (9th Cir.
1996) (statutory and regulatory "provisions place a cap on the
percentage of a public housing tenant's monthly adjusted income which
may be chargeable as rent"); cf., Beckman v. New York City Housing
Authority, 755 F.2d 1074, 1079-80 (2nd Cir. 1985) (rent limits under
Brooke Amendment apply to tenant households properly reporting their
income; rent limits may be exceeded where tenants fail to report
income necessary to calculate rent and housing authority estimates
such tenants' rents).
Indeed, in an appeal in New York similar to the present matter,
the court held that the Brooke Amendment prohibited the housing
authority from evicting a public housing tenant for failing to pay
late fees, utility fees and maintenance fees. Binghamton Housing
Authority v. Douglas, 217 A.D.2d 897, 630 N.Y.S.2d 144 (N.Y. App Div.
1995). Like the ACHA in the present matter, the housing authority
in Binghamton had designated these fees as "added rent" in its lease
and sued to evict for nonpayment of rent when the tenant failed to
pay these fees. In upholding dismissal of the eviction case, the court
reasoned:
Despite the clear lease provisions, the property
at issue is governed by standards different from
those applicable to private landlord/tenant
relations. Pursuant to the Brooke Amendment, as
implemented by the public housing regulations,
14
the total tenant payment allowable as rent is only
that amount designated by the guidelines therein.
. . and does not include "charges for excess
utility consumption or other miscellaneous
charges.”
Binghamton, at 217 A.D.2d at 898, 630 N.Y.S.2d at 145 (citations
omitted). Thus, while the Binghamton court held that these fees could
be collected in a separate monetary action, the court nonetheless held
that failure to pay such fees could not be the basis for eviction for
nonpayment of rent since, under the Brooke Amendment, they cannot be
rent. Id., at 217 A.D.2d at 899, 630 N.Y.S.2d at 145. See also Miles
v. Metropolitan Dade County, 916 F.2d 1528, 1532 n.4 (11th Cir. 1990),
cert. denied, 502 U.S. 898 (1991)(Brooke Amendment and implementing
regulations do not permit a housing authority to "transform a
miscellaneous charge into rent"); Aujero v. CDA Todco, Inc. 756 F.2d
1374 (9th Cir. 1984) (landlord’s charge of a mandatory meal fee is not
rent, and therefore cannot be considered in determining whether the
30% rental limitation was violated); Hanrahan, supra, 912 F. Supp.
at 437 (mandatory meal charges not deemed rent).
In 1998, Congress passed the Quality Housing and Work
Responsibility Act of 1998, Pub. L. No. 105-276, 112 Stat. 2461, tit.
V (Oct. 21, 1998) (QHWRA), carrying over the Brooke Amendment rent
limits. 5 The public housing federal regulations, both before and
5
Section 523 of the Act amended the provisions of 42 U.S.C. §
1437a(a)(2) effective October 1, 1999, by permitting public housing
tenants to choose to pay "flat rents" comparable to private market
(. . .continued on next page)
15
after QHWRA, continued to implement the Brooke Amendment rent
restrictions. Before QHWRA, 24 C.F.R. § 5.603 and 24 C.F.R. § 5.613
were in effect at the time the trial court below rendered its decision.
24 C.F.R. § 5.603 defined "tenant rent" as the “amount payable monthly
by the family as rent to the PHA or owner, as applicable. . . .” Further,
24 C.F.R. § 5.613(a)(2) expressly exempted "miscellaneous charges"
from public housing tenants' payment of rent. Specifically, 24 C.F.R.
§ 5.613(a)(2) had stated:
For public housing only. Total tenant payment
for families residing in public housing does not
include charges for excess utility consumption
or other miscellaneous charges (see Sec. 966.4
of this chapter). (Emphasis added).6
The above regulations were recently amended, see 65 Fed. Reg.
16716 (March 29, 2000). 24 C.F.R. § 5.603 states that “tenant rent"
is "[t]he amount payable monthly by the family as rent to the unit
owner (section 8 owner or PHA in public housing)...." Moreover, the
“total tenant payment” under 24 C.F.R. § 5.628(a) tracks the Brooke
Amendment’s identical language, incorporating the Brooke Amendment’s
rent definitions and limits.7 Importantly, 24 C.F.R. § 960.253(c)(3)8
rents instead of the “income-based rents” at 42 U.S.C. § 1437a(a)(1)
under the Brooke Amendment.
6
The Appellate Division agreed that although now repealed, 24
C.F.R. § 5.613(a)(2) was in effect at the time of the trial court’s
decision and applied to the ACHA’s lease. Taylor, at 573, n.3.
7
24 C.F.R. § 5.628(a)(4) adds a “minimum rent” section that
is not part of the Brooke Amendment. Tenants reporting no income
must pay a minimum rent of no more than $50.00 a month. 24 C.F.R.
(. . .continued on next page)
16
continues the limits on public housing tenant rents from the previous
regulations. 24 C.F.R. § 960.253(c)(3) mandates in relevant part:
(3) The income-based tenant rent must not exceed
the total tenant payment (Sec. 5.628 of this
title) for the family minus any
applicable utility allowance for tenant-paid
utilities. . . . (Emphasis added).
As the statutory and regulatory scheme demonstrate, in the area
of public and federally subsidized housing, Congress has strictly
defined rent and limited the rent payable by low-income families'
living in public housing. If attorneys’ fees or late charges are
deemed “additional rent,” this by definition exceeds the carefully
circumscribed Brooke Amendment rent limits.
The Appellate Division in the present matter erroneously relied
upon the provisions of 24 C.F.R. § 966.4(b) and § 966.6(h) without
addressing the limitations imposed by the repealed 24 C.F.R. §
5.613(a)(2) and the current 24 C.F.R. § 960.253(c)(3). Although 24
C.F.R. § 966.4(b) and § 966.6(h) do permit public housing authorities
to adopt lease provisions charging tenants with attorneys’ and legal
charges, these federal regulations in no way authorize housing
authorities to define these charges in leases as additional rent.
On the contrary, to do so directly violates the Brooke Amendment,
§ 5.630 contains various financial hardship exemptions excusing
tenants from paying the minimum rent, and tenants unable to pay the
minimum rent cannot be evicted.
8
The regulations at 24 C.F.R. § 960.253 implement the “choice
(. . .continued on next page)
17
as well as the previous regulations at 24 C.F.R. § 5.613(a)(2) and
the current regulations at 24 C.F.R. § 960.253(c)(3). As noted, the
courts in Binghamton, supra, and Miles, supra, had recognized this
crucial distinction between rent and miscellaneous charges.
THE APPELLATE DIVISION ERRED IN HOLDING THAT
FEDERAL LAW LIMITING THE MAXIMUM RENT PAYABLE
BY PUBLIC HOUSING TENANTS DID NOT PREEMPT STATE
CONTRACT LAW ALLOWING LANDLORDS TO DEFINE
ATTORNEYS' FEES AND LATE CHARGES IN LEASES AS
ADDITIONAL RENT.
Under the Supremacy Clause, U.S.Const., Art. VI, cl.2.
preemption occurs when state law actually conflicts with federal law.
Conflict preemption arises when the operation of state law “stands
as an obstacle to the accomplishment and execution of the full
purposes and objectives of Congress.” Wisconsin Public Intervenor
v. Mortier, 501 U.S. 597, 605 (1991).
New Jersey contract law permitting public housing authorities
to charge their tenants attorneys’ fees and late charges as
additional rent under their leases does indeed present a major
obstacle obstructing the congressional objectives and purposes
underlying the Brooke Amendment, 42 U.S.C. §1437a(a)(1). The essence
of the maximum rent level set under the Brooke Amendment is to ensure
that low-income families, who otherwise cannot afford market rental
rates, pay shelter costs within their limited means and resources.
of rent” option enacted under the QHWRA in 1998.
18
In order to allow low-income tenants to afford such housing, Congress
has strictly defined and limited the rents they pay.
The definition of rent in this regard is critical. By expanding
it to include “additional rent” for miscellaneous charges, poor
tenants face a much greater risk of eviction. Allowing public housing
authorities to ignore these rent definitions and ceilings creates
a significant financial risk for poor tenants who will be evicted
from subsidized housing because they cannot afford these additional
charges. Indeed, this Court has recognized that public housing
authorities are "publicly-subsidized provider[s] of housing of last
resort... subject to public policy responsibilities not generally
imposed on private landlords." Housing Authority of Morristown v.
Little, 135 N.J. 274, 291 (1994). Accordingly, housing authorities’
rights under state law to freely define miscellaneous charges as rent
are circumscribed by their obligations to comply with congressional
intent under the Brooke Amendment restricting rents chargeable to
public housing tenants.
CONCLUSION
For the foregoing reasons, it is respectfully requested that
the Court grant this Petition for Certification.
CERTIFICATION OF COUNSEL
I certify that this Petition presents substantial questions and
is filed in good faith and not for purposes of delay.
Dated: December 28, 2000 Respectfully submitted,
19
CAPE-ATLANTIC LEGAL SERVICES, INC.
Attorneys for Defendant-Petitioner
Vanessa Taylor
By:___________________________
KENNETH M. GOLDMAN, ESQUIRE
20
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