Attorney Derek Reed of Ehrlich, Petriello, Gudin, Plaza & Reed P.C. spoke on behalf of the Property Owners Association of New Jersey to njspotlight.com for a Nov. 23 article, saying property owners would be “hard-hit” with higher property taxes if a proposed bill making its way through the state’s legislature ultimately passes.
A-4034/S-2340 – or, “The People’s Bill,” as it is called by tenant advocates – allows residential tenants, who have failed to pay some or all of the rent since March 2020, six months to re-pay each month of missed rent to a property owner with all rent that became due during the emergency period to be paid in full 30 months after the end of the emergency period, which period does not end until two months after the end of the public health emergency. Currently, there is no end to the public health emergency, which results in an indefinite period for property owners to go without rent while other costs and expenses remain due.
Effectively, the bill would pass renters’ financial burdens and struggles onto their landlords, who have been facing financial uncertainties of their own. Those uncertainties undoubtedly will continue to worsen as this pandemic continues with no recourse.
The bill could affect more property owners than just those with nonpaying tenants under their rooves, as Reed emphasized to njspotllight.com. It can also have a domino effect that eventually leaves New Jersey homeowners with even higher property tax burdens.
Preventing rental properties from replacing nonpaying tenants with those who can pay would reduce the amount of income the property generates. The property’s tax liability is tied to how much income it generates per year, so a reduction in income translates into a lower assessable value of the property. As a result, New Jersey homeowners could realize increases property taxes as a result.
Reed told njspotlight.com that other states such as Virginia and California have responded to situations such as New Jersey’s with laws that balance the interests of tenants and landlords, such as providing less time to pay back missed rent.
“Other states have thought about it more holistically, by asking how to help keep tenants in the property without devastating an entire multifamily housing industry,” he told the online publication.
For more information about this article, attorney Reed, or our services at Ehrlich, Petriello, Gudin, Plaza & Reed P.C., please contact us online.