NJ court backs Murphy’s order allowing tenants to use security deposit as rent during COVID crisis
A court struck a blow at a group of New Jersey landlords on Tuesday who argued that Gov. Phil Murphy’s executive order signed at the height of the coronavirus pandemic that allowed tenants to use their security deposit to pay rent was unconstitutional.
A state court sided with the Murphy administration and ruled that the governor was in their power to sign the order under the Disaster Control Act.
Murphy’s administration hailed the move as a victory for tenants. But Jared McClain, the attorney representing the owners, said “no law or contract in New Jersey is safe any time the state faces an economic downturn.”
“Living in New Jersey during the economic collapse of 2006, it would have been an absolute shock to almost anyone that the governor could simply waive the enforceability of any law and any private contract whenever he claimed that that would meet the needs of the economic crisis, ”McClain said in a statement. “But today’s decision gives exactly that power to the governor.”
Murphy used the emergency ordinance to issue dozens of executive orders, including mask warrants and a moratorium on ongoing evictions, which prevents landlords from locking down tenants.
The Disaster Control Act initially gave governors the power to respond to war emergencies. But “the legislature ultimately extended the powers of the governor to deal with any unusual incident endangering public health, safety or welfare,” the court wrote in its ruling. “Neither does the governor have to wait for a disaster to happen before taking action.”
Acting Attorney General Andrew Buck called the decision a big win for New Jersey residents struggling to pay their rent.
“In the worst of COVID-19, @GovMurphy protect individuals from public health and economic damage. One Exec Order has supported tenants and helped them stay in their homes. Today, NJ has won big in court: the government order protecting tenants is valid… ”he said in a tweet.
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Unemployment rose as Murphy signed the executive order, and the state and nation essentially shut themselves down to fight the spread of the pandemic. More than 70,000 evictions have been filed since April 2020, and housing advocates warn of the next “tsunami of evictions” once the public health emergency ends.
Landlords and landlords, meanwhile, argued that they were struggling to pay their bills and had not been afforded the same protection as tenants.
A couple involved in the lawsuit, the Johnsons, have not received rent since last spring and are in debt of $ 14,000. And the Kravitz family have rented out their Glassboro property to students who haven’t paid the last few months of rent and left the apartment in shambles, McClain said.
Since the complaint was filed, dozens of other small landlords running into debt and having problems with their tenants have contacted McClain, he said in May. Most have fallen behind on their mortgage or property tax payments.
“It’s unfortunate for most of those involved because the pandemic has been devastating for everyone, but by the end of it he could miss 18 months of rent,” McClain said at the time.
The lawsuit had already been filed and dismissed in federal court.
The state has offered several forms of rental relief to tenants and landlords, including the COVID-19 Emergency Rent Assistance Program, which is expected to distribute $ 353 million to more than 30,000 households. Another program, the Small Landlord Emergency Grant, was only available to owners with more than three or less than 30 properties, excluding some small owners.
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