Rental landlords are hoping a state appellate court ruling will disband the borough's annual licensing fees many landlords feel are nothing more than an arbitrary tax.
GLASSBORO — Two landlords hope a state appellate court ruling will disband the borough's annual licensing fee for apartment rentals that they feel has been nothing more than an arbitrary tax.
But, officials at the state level believe the ruling could have detrimental health and safety repercussions.
The New Jersey Superior Court Appellate Division in August determined that municipalities did not have the authority to charge annual licensing fees on apartment buildings with leases of 175 days or more.
The borough has not announced any plans to change its rental licensing ordinance at this time. The $160 registration fee for each rental unit is still posted on the borough's website.
Adam Szyfman, owner of Glassboro Rentals, has been a staunch opponent of the annual fee for years, describing it as "overkill."
Szyfman said he is not opposed to inspections — which he said include assessing smoke detectors, windows, locks and other functions. But he believes the current annual cost is much too high.
"I'm against egregious fees which I feel is a complete money grab," Szyfman said.
The fees are due in the summertime.
He was happy with the appellate ruling, but because there has yet to be a final word from the borough on the fee, he remains skeptical and wonders if the borough will figure out a way to get around the court decision.
Elizabeth Quam, a landlord in Glassboro, owns 15 rental properties and said every year she pays roughly $2,400 in annual licensing fees.
"It's almost a tax for having a rental property," she said.
She continued, "I was really happy they are upholding and protecting people."
Timber Glen, a New Jersey limited liability company, had filed a complaint against Hamilton Township, in Atlantic County, over annual licensing fees in the township. A trial court had initially dismissed the complaint before the appellate court's reversal.
In the August ruling, however, the appellate court maintained rental fees and inspections for whenever there is a change of occupancy and for short-term leases occupied less than 175 days.
Charles Gormally, a Roseland-based attorney who was part of the team that represented Timber Glen, said the decision will have a positive impact in stablizing the rental property market statewide.
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Gormally's team argued the annual fees not only finsncially burdened landlords but also tenants, who would bear the impact through increased rent.
He believes the fees are a result of the state's constraints on municipalities' ability to increase property taxes. Licensing fees, he said, are a way for municipalities to generate revenue.
"What can a town do when they can't raise property taxes," Gormally said.
He continued, "Towns are put in fiscal restraints. They look to create and increase fees outside the property tax."
Gormally believes it may take time for municipalities with licensing ordinances to comply with the appellate decision.
"You do you have a practical issue where the town is just trying to do the right thing; now you have to change the law and at some point someone (at the state level) will instruct the town that they have to (either) amend, change, revoke or just not enforce them," Gornally said.
Edward Purcell, associate counsel of the New Jersey State League of Municipalities, was among those who argued for Hamilton Township.
Purcell said he understands landlords' frustration, but he believes there will be a cost of the appellate court's decision.
"And there is going to be a lot of issues that are going to arise ... The small little community (rental properties) broken into one or two apartments, how are those going to be inspected?" Purcell said.
The state inspects rental properties of three or more units every five years, but not those with less than three units.
He believes the absence of annual inspections leaves the door open for landlords to neglect tenants and worries about properties with less than three units that forgo state inspections.
He justified the fees, citing that a lot goes into the annual inspections.
"It has to pay for the hourly wages, their benefits, their pensions, the money to put gas in their car, the insurance for their car; these inspectors have to also know their stuff," he said.
Borough officials refused to comment on the matter "due to ongoing litigation about the licensing fees."
Spencer Kent may be reached at skent@njadvancemedia.com. Follow him on Twitter @SpencerMKent. Find the South Jersey Times on Facebook.
