New Jersey Real Estate Attorney Blog

Articles Posted in Real Estate

gavelMost American businesses keep track of their charges and receivables using a “first in, first out” method. The central principle of this method, referred to as “FIFO,” is to apply customers’ payments toward their earliest balances first, and then toward their later balances. New Jersey landlords had also accepted the FIFO method of accounting until relatively recently, when the State Supreme Court ordered that eviction complaints follow a specific format, in which tenants’ unpaid charges are specifically set forth in detail.

Using the FIFO method, for example, if a tenant failed to pay rent January and February, the next payments that the tenant did remit would be applied to January and February. That application would certainly create a gap in later months in which the payments were made. In the event that the eviction complaint followed the same methodology, it might appear that the tenant owed rents from March and April (or whatever the most recent months were), when the two missed payments were really from January and February. This method is unfortunately confusing for tenants who may show up to Court with receipts to prove that they paid certain rents, only to find that the receipts that they produced do not refer to the missing payments in question.

Prior to the institution of the revised eviction complaint format, we had found that the best method of proving the balance owed in a trial involves going back to the ledger to determine the last date when the balance owed was $0.00. Then the landlord should add up all the rents that became charged since that date (i.e.; the monthly rent multiplied by number of months). Then the landlord should add up all the receipts that were paid during that same time period, and subtract that number from the amount of rents charged to determine how much was still owed.

Notwithstanding the simplicity of that process, I often wondered how a Court would rule when faced with a situation where the tenant could demonstrate that he or she had no idea which rents were owed, and therefore, could not prepare an adequate defense for trial. Fortunately, I received my answer a few weeks ago, when I was waiting for one of our matters to be reached for trial. From the gallery, in the rear of the Courtroom, I watched as another attorney struggled to demonstrate to the Judge that the unpaid rents set forth in the Complaint, did not refer to the actual months in which the payments were missed, but rather, they referred to the most recent months. The attorney continued her explanation to the Judge with a futile statement about standard accounting processes.

The Judge responded that he was familiar with standard accounting practices, but remarked that they were not adequate to enable the tenant a fair opportunity to prepare his defense. The Judge, accordingly, dismissed that matter, with an instruction to the attorney that she could refile the matter, if she redrafted the complaint in a way that showed the tenant the specific months in which the payments were missed.

In light of the Court’s decision in that matter, we have also began to examine our own matters to make sure that that the statement of unpaid charges properly coincides with the months in which the tenant failed to make those rent payments. In cases where the ledger has multiple entries of missed payments, it is also advisable to include a copy of the ledger in the eviction complaint.

Finally, please note that only certain charges can be included in the complaint for non-payment of rent. Attorney’s fees, late charges and utility charges can only be included if there is a written lease calling those items “additional rent.” Furthermore, even in cases where the lease does call attorney’s fees and late fees “additional rent,” they still could not be included in an eviction complaint where the tenant receives Federal rental assistance (e.g.; Section 8).   For other questions regarding landlord tenant matters, please feel free to contact our office.

NickelA few years ago, I was attending a conference for the New Jersey Chapter of the International Association of Assessing Officers. The moderator introduced the Monmouth County Tax Administrator, Matthew Clark, to discuss a new program he was implementing.  Mr. Clark discussed his new website to enable the electronic filing of all tax appeals.  He also spoke about changes to the tax appeal calendar to ensure that tax appeals were filed and decided before the date that the municipalities were required to finalize their budgets.  These all seemed like good ideas.  Then Mr. Clark spoke about making data more available to assessors to create a group of “super-assessors,” who could annually perform revaluations.  Since one of the exceptions to the Freeze Act is a revaluation, it is clear that the process of annual revaluations would substantially vitiate the benefits of a tax appeal.  Later that day, I approached Mr. Clark with a request that he reconsider his position on annual revaluations.  That request did not draw much response other than an acknowledgement that the plan was already a fait accompli.

Annual revaluations are commonplace in many towns in Somerset County, although they are not specifically legislated like they are in Monmouth County. Since revaluations are time consuming and expensive, New Jersey towns have historically avoided performing them until they have been compelled to do so by the County Tax Board.  Instead, towns have opted to make adjustments only to the tax rates, which are not appealable.  The arithmetic works out the same, of course.  Either way, the town satisfies its budget, although avoiding revaluations can produce some unfair results in cases where there is a substantial deviation in the changes in real estate values in different parts of the town.

A recent series of newspaper articles heavily insinuated that the annual revaluation program was a ploy to line the pockets of one of the former Tax Board Commissioners, who is now employed by the company that does many of the revaluations. The articles are certainly eye-catching, but they unfortunately lack merit, and they fail to produce any evidence of any actual misfeasance.  Other than a common link between the Tax Board and the revaluation company, there is no substance to support the allegations.

Assuming that the purpose of the annual revaluations is to keep the assessments current, we must also acknowledge that revaluation companies use large-scale models to predict values, and unfortunately, there will always be some properties that fall outside of the model, and become over-assessed. Therefore, while we dismiss the notion that there is any unscrupulous or nefarious motive behind the Pilot Program, we are simply arguing the point that the Pilot Program is a bad idea since it deprives the taxpayer from the justice of sustaining a fair assessment following a successful tax appeal.  We are also certain that there will be a chilling effect on some taxpayers who are in genuine need of an appeal, because they believe that their appeals will not produce any long term results.  If the purpose of a tax appeal is to correct a prior injustice, why should the final judgment expire after one year? Perhaps the real purpose of the annual revaluation program is to discourage the filing of tax appeals.

The most common complaint we receive from taxpayers is that their tax assessments are substantially higher than they were last year. The drastic change in assessments may be the result of the town re-equalizing their assessments to 100% (or thereabouts).  In these cases, we would expect that the tax rate would drop commensurately with the increase in assessments.  In some cases, it is only individual properties that are re-assessed, leaving their property owners feeling like they are being overcharged.  In either case, we cannot appeal an assessment based on the increase in assessment.  We can only appeal an assessment in cases where the assessment exceeds the property’s actual value as of October 1 of the pre-tax year.  Our appraisers are especially skilled at developing an opinion of property value based on comparable sales, and for rental properties, an income approach is also used.

Notwithstanding the assessor’s ability to re-assess properties on an annual basis, we have found that for the matters we have settled, the assessor very often allows the new assessment to continue into following years. In cases where the Tax Board’s Judgment is disregarded and assessment increases the following year, we will refile your appeal for the new year at a discounted rate.

Several months ago, we discussed the Abandoned Property Act. Under N.J.S.A. 2A:18-72, et. seq., a landlord cannot dispose of a tenant’s property until the following two conditions occur:

  1. The Landlord must have regained possession from the tenant, either by way of eviction action, or by way of other conclusive proof that the tenant has voluntarily surrendered possession of the premises (e.g.; the tenant turned in the keys or indicated in writing that he or she has surrendered possession); and
  2. The landlord shall also serve the tenant with a written notice, advising the tenant that he or she must claim all belongings in the apartment within 33 days, or they will be presumed to be abandoned, and may be disposed of.

The Abandoned Property Act exists for the benefit of both the landlord and the tenant. For the tenant, it affords an additional month to claim any belongings that may not have been claimed at the time the tenant moved out (or was locked out). For the landlord, the Abandoned Property Act provides a date at which the Landlord can dispose of the tenant’s property, ostensibly without the risk of further claims by the tenant.

For several years, we believed that our clients who complied with the Abandoned Property Act would be immune to further action by the tenant. However, in a recent matter, where the landlord’s compliance with the Abandoned Property Act was seemingly undisputed, there were some factual circumstances that controverted the ordinary rules. In November of 2014, we evicted tenant, and a lockout was performed and our client served the tenant with the appropriate Notice to Claim Abandoned Property. Approximately 55 days later, the tenant later filed an Order to Show Cause, claiming that she had a right to a return of her belongings. The Court did not agree, and the Court vacated the tenant’s application.

Six months later, the Landlord still had possession of the belongings, and he decided to give them to an auction company to sell the belongings. When the tenant learned that her belongings were about to be sold at auction, she filed another Order to Show Cause, again arguing that she had a right to return of her belongings. In opposition to the tenant’s Motion, I argued the principle of Res Judicata, which is the civil equivalent of “double jeopardy.” Since the tenant’s new Motion did not allege any facts that were not previously argued in the original Motion, our position was that the tenant was barred from re-arguing the same case that had already been denied six months earlier. Additionally, I re-asserted the fact that the Landlord had complied with the Abandoned Property Act, and accordingly, the tenant had no cognizable claim for any of her belongings.

However, in the new Motion, the tenant argued that the reason she had not been able to retrieve her belongings within the 33-day period afforded in the Abandoned Property Act was that the Landlord did not respond to her numerous requests to allow her access to pick up her belongings. The tenant stated her belief that she was never provided with a specific time to pick up her belongings. Conversely, the Landlord argued that he was waiting for the tenant to respond to him with a specific time to pick up her belongings, and that in the two months that passed after the Abandoned Property Notice was served, the tenant never gave him a time, during which he should allow access. After lengthy arguments by both sides, the Court entered its verdict.

The trial Judge stated that, while the tenant was served with a proper Notice under the Abandoned Property Act, it did not appear that the tenant was really given a fair opportunity to retrieve her belongings. Accordingly, the Court ruled that, notwithstanding the fact that the legal requirements of the Abandoned Property Act were complied with, the tenant should be afforded an additional week to claim her belongings. The Court, however, did order that the tenant was responsible for the reasonable storage fees charged for the auction company.

Following this decision, we have issued revised instructions to our clients that in addition to satisfying the two requirements set forth in the Abandoned Property Act, the Landlord should either suggest a series of dates when he or she would be available, or ask the tenant for a series of dates when he or she would be available to meet for retrieval of belongings.  For questions regarding Landlord Tenant law, please contact our office.

gavel.jpgFor taxpayers in Mercer, Middlesex and Monmouth Counties, who have matters pending before the New Jersey Tax Court, our job just got even easier (and faster). Historically, a property tax matter filed in the New Jersey Tax Court would require the two attorneys to make several appearances in Court before the matter would finally be scheduled for trial. The first appearance, which would be scheduled anywhere between 8 and 18 months after the original filing, would usually not yield much in the way of productive results. The second appearance, which may have been scheduled about two months later, would generally lead to the parties being instructed by the Court to complete discovery and discuss settlement. On the third appearance, the Judge would tell the parties to go get appraisals and continue discussing settlement. If the matter did not settle by the fifth appearance, we could usually ask the Court to schedule a trial. While each case was unique, we never got to a trial without at least 4 prior Court appearances.

With 60,000 property tax cases pending before the Tax Court and only 6 Judges to hear all of them, the case management process has not only been burdensome for the attorneys, but it has also exhausted the Court’s limited resources. For those of you who have not had the pleasure of showing up to Tax Court on a Wednesday morning, when there are 400 cases scheduled for case management, you have unfortunately missed out on a miraculous event, that has apparently been phased out of the process, at least by one out of the six Judges who hear Real Estate Tax Appeals.

Judge Sundar, who presides over Tax Appeals for Mercer, Middlesex and Monmouth County properties, has implemented a new plan to speed up the Tax Appeal process. The plan involves having the two attorneys work out the details of the case management process on their own and reporting the status to the Judge via email. This will eventually lead to the Court being able to increase the number of cases it can clear, rather than dealing with an issue that can usually be resolved by the two attorneys on a case. As much as I enjoyed spending my Wednesday mornings in downtown Trenton chatting with my colleagues about capitalization rates, equalization ratios and external obsolescence, while waiting for my cases to be called, it will be nice to be able to devote the 3 hours to more productive pursuits.

Effective immediately, Judge Sundar will no longer require attorneys to appear in Court for case management conferences, except for matters that commenced prior to 2013 or in cases where a case management order has already been entered. We can only hope that the other 5 Judges will adopt the same policy.

For more information about tax appeals, please feel free to contact our office.

dollar-sign-1317230-m.jpgOur firm’s County Tax Appeals for the 2015 Tax Year have concluded. We are pleased to report that this year, we have reduced the assessments for our tax appeal clients by more than $5.1 Million. In more than 70% of our concluded matters, we were able to reduce the assessments for our clients. In Monmouth County, our appeals in Sea Girt had the largest margin of savings, averaging more than $150,000 per property. In Asbury Park, where a revaluation was recently conducted, assessments did not vary substantially from true market values. In Middlesex County, our concluded matters yielded an average assessment reduction of 24% of assessed value.

As always, much of the credit goes to our experienced team of real estate appraisers, who have done an excellent job in not only preparing the appraisal reports, but also testifying at the tax appeal hearings. In all, we used a total of 9 appraisers for our 2015 matters, and they have all done an exceptional job in helping us overcome the burden of proof in out matters.

Finally, we note that a property does not need to be assessed for more than it is worth in order to be considered “over-assessed.” In many towns, an “equalization ratio” is used to determine the percentage of value at which properties should be assessed. If your property is assessed at a higher percentage of value than the rest of your town, you may also have a good case for a tax appeal. However, for Monmouth County residents, we note that due to the new “Assessment Demonstration Program” being in effect in Monmouth County, nearly all towns in this County have attempted to assess their properties at or near 100% of “True Market Value.” In cases where the assessments have exceeded true market value, we encourage taxpayers to file appeals.

For taxpayers who did not file a tax appeal for the 2015 year, we note that we will begin accepting appeals for 2016 starting in October of this year. In Monmouth County, all tax appeals are due by January 15, 2016. In the remainder of New Jersey Counties, tax appeals are generally due by April 1, 2016. In the event that your property is over-assessed, we encourage you to contact us as early in the Tax Appeal season as possible, so we have time to have one of our appraisers evaluate your property prior to the filing deadline.

Keys.jpgFor the last 12 years, our firm has been writing articles about the eviction process. We have discussed pre-suit notices, habitability hearings, security deposit defenses, and a variety of other topics, focused on the eviction process. However, we have never provided any articles regarding Warrants of Removal. The Warrant of Removal is generally the last stage in the eviction process. While post-judgment applications sometimes add an extra step to the process, it is important for landlords to have a full and complete understanding of the Warrant of Removal process, in order to minimize the risk of unnecessarily delaying the lockout of a tenant of even causing the involuntary dismissal of an eviction.

Following nearly all eviction matters that are based on nonpayment of rent, we will leave the Courthouse with either a settlement that the landlord has agreed upon, or a default against the tenant. The defaults can be the result of a tenant not showing up to court to contest the eviction, or in some cases, they can be the result of the tenant showing up, but without the enough funds to persuade the landlord to enter into a settlement agreement. Since the Court cannot make the landlord wait for rents or force the landlord to accept the rent in installments, the Court will change the marking for these cases from “Ready” to “Voluntary Default,” or “Judgment by Consent.”

Whether the Default is the result of the tenant not showing up, or the result of the tenant showing up with no money, a Judgment for Possession will enter. Barring the very unlikely possibility that of the tenant posting the full amount due with the Court later on the day set for the hearing, the Landlord should immediately apply for a Warrant of Removal.

According to N.J.S.A. 2A:18-57, the Warrant of Removal cannot be issue sooner than the third business day after the entry of a Judgment for Possession. Nearly every vicinage of the New Jersey Superior Court system seems to have different interpretation of that Statute. We have argued that the proper reading of the Statute suggests that, so long as the Landlord’s attorney submitted the Certifications (XI-T and XI-U) on the day of the hearing, the Court should be ready to issue the Warrant of Removal as early as 3 business days later, regardless of whether the landlord waited a day or two to actually file the Warrant. However, some Courts will not process the Warrant until at least 3 business days after they receive it. In either case, the Landlord’s deadline to order the Warrant expires 30 days after the hearing date. This is a strict deadline, and there are no exceptions to this rule. In cases where the Warrant is being ordered because the tenant breached a settlement agreement, the Warrant must be ordered within 30 days of the alleged breach of the settlement. In most cases, the breach will involve either a missed installment or a missed monthly rent payment during the time period of the settlement.

The Execution of the Warrant of Removal (i.e.; the lockout) of the tenant follows an almost identical timetable as the service of the Warrant. After a Warrant of Removal is served, the Court Officer must wait an additional 3 business days before executing the Warrant. The Landlord shall have 30 days with which to have the Warrant executed. However, in the case of the execution of the Warrant, it is much easier to miss a deadline. Landlords are often unaware of when their Warrants are served, and then they sometimes do not know which Court Officer served the Warrant. Therefore, the time period during which the Landlord can execute the Warrant of Removal sometimes is sometimes expired without the landlord even realizing how much time was lost. Electronic Court records are available online through the New Jersey Judiciary website and can be very helpful in assisting landlords to find out when their Warrants were served and who the Court Officers are. For more information on this subject, please contact our office.

April Calendar.jpgSince 2004, our office has been representing property owners throughout New Jersey in both residential and commercial tax appeals. For a taxpayer, who has already paid the tax appeal filing fee, and in some cases, has even retained an appraiser to prepare a report, the prospect of having a tax appeal dismissed, before it is even heard by the Tax Board, can be extremely frustrating. As we prepare for another season of tax appeal hearings, we have been asked to address some of the more common causes for dismissals of Tax Appeals.

Nonpayment of Taxes

One of the most common causes of “involuntary” dismissals of tax appeals is the failure of the property owner to pay taxes. Under N.J.S.A. 54:3-27, a taxpayer’s failure to pay the first quarter taxes and any other municipal charges (including sewer charges) prior to the tax appeal hearing will result in the dismissal of the tax appeal. While the Tax Board will generally require a Motion by the municipal attorney before dismissing the matter, the Tax Board will allow the taxpayer to present arguments that the non-payment was subsequently cured, so long as the taxes are paid prior to the hearing.

Failure to Permit Inspection

While government officials cannot compel property owners to allow access to their properties, it certainly would not be reasonable for a property owner to refuse to grant the assessor access to a property in which a tax appeal is pending. Granting the assessor access to the property is especially important in cases where the taxpayer is arguing that the assessor’s records are not accurate. For instance, in some cases, the taxpayer will argue that the assessor mismeasured the house, or miscounted the number of rooms, or assumed that the house had an amenity that it did not have.

In cases in which the assessor argues that the homeowner has refused access to the property, the Tax Board will sometimes allow the matter to be rescheduled so that the assessor may get another opportunity to inspect the premises. Notwithstanding this possibility, taxpayers should not assume that the matter would be rescheduled. The Tax Board has the option of allowing the matter to proceed during the initial hearing and allowing the parties to present their evidence. Since the Tax Assessor is already provided the presumption of correctness, it will be the property owner’s burden to prove that the tax assessor’s records are inaccurate.

Failure to Respond to Chapter 91 Inquiry

One of the principal factors in the determination of value for a commercial property is the amount of income produced by the property. Tax Assessors may serve upon the owner of a commercial property a written inquiry, known as a Chapter 91 request, demanding information about the income and expenses of the property. The requests are generally sent in June of the pre-tax year, via certified mail. In the event that the taxpayer fails to respond to the Chapter 91 within 45 days, he or she will lose the right to file an appeal the following year. Taxpayers should be forewarned that a dismissal for failure to comply with a Chapter 91 request is not curable.

Filing Deadline

Finally, taxpayers need to remember not to miss the deadline to file their appeals. In Monmouth County, the deadline to file an appeal is generally January 15. In the remainder of New Jersey, the deadline to appeal is April 1. There are very few exceptions to the filing deadlines. If you believe an exception may apply to your matter, you should contact your local Tax Board for more information. Please note that the tax appeal filing deadline refers to the date upon which the Tax Board must receive the tax appeal filing. Postmark dates are irrelevant and taxpayers should keep in mind that some Tax Boards close as early as 4:15 P.M., and therefore, it is best to file the tax appeal as early as possible. Our office will be accepting new tax appeals until March 23. For more information regarding your matter, please contact our office.

check book.jpgOur office previously reported on the changes in how Monmouth County’s tax appeals are scheduled. In order to ensure that all County Tax Appeals are heard and resolved prior to the finalization of municipal budgets, Monmouth County had implemented a new calendar that requires tax appeals to be filed by January 15. In this week’s article, we will highlight an additional change in Monmouth County’s approach to tax assessments.

During the past few weeks, our office has fielded hundreds of phone calls from taxpayers who are concerned that their assessments have been dramatically raised. Their first question is “why is my assessment being raised, when the property has not increased in value?” I need to explain that, in some cases, the town previously had all of the properties assessed at a percentage of true value and now that the town is being re-assessed, all properties are (ostensibly) going to be re-assessed at 100% of true value.

In other cases, where the town was already assessed at full market value, there are still several properties, which for variety of reasons, under-assessed. Therefore, the fact that your assessment has increased substantially is not in itself a reason for appeal. Rather, we need to look at the new assessment and determine whether it exceeds the fair market value.

The next question taxpayers have is “why is this re-assessment happening in every town?” To answer this question, we need to review the “Annual Assessment Revision” clause of the new program. The program provides the tax assessor with both the authority and the requirement for the annual review and revision of all properties within the municipality. The intention in this case is to create increased accuracy of assessments and to reduce exposure for revenue losses due to appeals.

Since Monmouth County is the first to implement this program, it is uncertain whether the program will be a success. It is, however, certain, that in these initial few years, there will be an inordinate number of tax appeals filed by taxpayers who are dissatisfied with their “starting point.” We need to caution potential clients, however, that their new assessments should only be appealed if they exceed the market value of the property.

Finally, for taxpayers who recently won a tax appeal within the last 2 years and are wondering why the “freeze act” does not protect their old assessments, the answer is that the freeze act does not apply to any town that has undergone a municipal-wide revaluation or re-assessment. Put simply, the Freeze Act does not protect any prior assessments in Monmouth County. Furthermore, we note that a wholesale increase in municipal assessments generally will not cause a substantial increase in taxes, since the tax rates would also be adjusted accordingly.

While the new program is designed to standardize and create a unilateral result throughout Monmouth County, the unfortunate fact is that not all assessors have equal ability to accurately and reliably determine property values. So far this year, the majority of our tax appeals have come from the towns of Marlboro, Middletown and Holmdel. For more information on tax assessments and tax appeals, please feel free to contact our office.

Nickel.jpgAs we enter the 2015 tax appeal season, we have fielded hundreds of phone calls from property owners who are interested in filing appeals. Since the determination of whether a property has been over-assessed is not always apparent without an appraisal, we have taken the time to discuss the questions presented by each caller before determining whether we would accept the matter, or reject the matter, or whether we would immediately assign the matter to one of our appraisers for a more definitive opinion as to whether the tax appeal is worthwhile for both our office and the taxpayer. During this process, the taxpayers have asked us many recurring questions. The following is a list of three frequently asked questions, along with our answers:

1. What is a revaluation or re-assessment?
Sometimes, due to changes in real estate values, the assessments in a town may be significantly lower than the actual values of real estate in the town. Alternatively, in the recent deflationary real estate market from 2007 through 2013, some towns actually had assessments that greatly exceeded the values of their real estate. Historically, towns did not often conduct revaluations due to the time and expense of doing so. Instead, the assessors left old assessments in place, and compensated by adjusting tax rates to make the budgets work. However, Monmouth County recently ordered all municipalities to conduct annual revaluations or re-assessments to ensure that each town remains assessed at 100% of true value. Notwithstanding the fact that a town may conduct a revaluation, assessments are still excessive on occasion, and that is when the taxpayer should file a tax appeal.

2. What causes errors in assessments?
When conducting a re-assessment, municipal tax assessors cannot individually appraise every house, since that process would take too long and cost too much money. Instead, the assessors rely on a “model” to predict real estate values within the framework of the location of the property and quality of the improvement (i.e.; the house) on the property. However, the models are often flawed and sometimes fail to take into account internal and external factors that may de-value one particular property in a neighborhood. Additionally, it should be noted that appraising is not an exact science. While it is an appraiser’s job to predict what a “ready, willing and able” purchaser might pay for a property, there are a myriad of factors for an appraiser to consider, and it is very possible that two appraisers could reach an entirely different conclusion as to value, especially in cases where there is a shortage of comparable sales upon which the appraiser can base his or her findings.

3. Why is my assessment higher than my neighbor’s assessment, when his house is nicer than mine?
Answer -You can only appeal if your assessment (or equalized assessment) exceeds the actual value of your property. This is generally determined by sales of comparable homes. It is not determined based upon the assessments of other homes. Furthermore, you may not appeal your assessment based on the assessments of other homes. If you believe that other homes in your neighborhood are under-assessed, you have the right to file a tax appeal on the other homes to request that their assessments are raised; however, that action will not affect your assessment, and it probably will not make you very popular among your neighbors.

In our next installment, we address three additional questions regarding Tax Appeals. As always, if you feel that your property has been over-assessed, please feel free to contact our office for a consultation.

dollar-sign-1317230-m.jpgBetween the 21 vicinages of the New Jersey Superior Court, thousands of employees are on staff, performing a variety of functions. Despite streamlining and reductions in workforce, the operation of the Courts remains a very expensive process, and the filing fees, which have not been increased in more than 10 years, are not sufficient to cover the expense of running the Courts. Under the circumstances, an increase in filing fees seems rather necessary to ensure that the Courts will remain properly funded. Accordingly, on August 11, 2014, the State of New Jersey Supreme Court received authorization from the legislature to enact a comprehensive set of fee increases, affecting all divisions of the Superior Courts. The proposed increases, which are projected to be enacted into law on November 17 are currently in a review process and the New Jersey Supreme Court was accepting comments from the State Bar until October 15.

Since our practice focuses mostly on the Special Civil Part, we will look at how the fee increases affect that practice. There is currently a $25 fee for filing an eviction complaint. That fee does not include the “mileage” fee, which is generally between $2 and $20, depending on the location of the property. Under the proposed plan, the filing fee would be increased to $50.00 (not including the mileage fee). To further complicate matters, the fee for additional defendants on a complaint will increase from $2 to $5. This means that a single eviction complaint for 3 adults residing in a rental may cost as much as $80 in court costs alone. For landlords who are looking to sue a prior tenant to collect unpaid rents, the fees will also increase. The prior filing fee of $50 for Special Civil Part Complaints (under $15,000) will be increased to $100.

For our Tax Appeal clients, the fee increases will not be as onerous. The filing fee for Tax Court Small Claims Division matters, which includes all residential properties, as well as any other properties where the annual tax liability is less than $25,000, the filing fee will increase from $35 to $50. For Standard Track cases, the filing fee will increase from $200 to $250. There are no fee increases contemplated for matters filed with the County Boards of Taxation.

Ostensibly, the proposed legislation appears to be necessary to subsidize an underfunded Court system. However, we have learned that only a small portion of the funds obtained from the fee increases will actually be allocated toward the Court’s operation. Instead, most of the additional funds will be used for other purposes, including the development and administration of a “Statewide pretrial services program,” as well as the development of a “Statewide digital e-court system,” Additionally, the proposal includes increased financial assistance to Legal Services of New Jersey, the entity that provides low cost legal services to indigent litigants.

Once the proposal is approved, the fee increases will take effect on November 17. Our office will send a more formal announcement to our clients once the filing fee increase takes effect.