Title: Franklin Tower One v. N.M.

State: new-jersey

Issuer: New Jersey Supreme Court

Document:

(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for the convenience of the reader. It has been neither reviewed nor approved by the Supreme Court. Please note that, in the interests of brevity, portions of any opinion may not have been summarized). STEIN, J., writing for a unanimous Court. The issue on appeal is whether N.J.S.A. 2A:42-100 prohibits a landlord that has never participated in the federal Section 8 rental assistance program from refusing to accept a Section 8 voucher from one of the landlord's existing tenants who becomes eligible for Section 8 benefits during the course of her tenancy. N.J.S.A. 2A:42-100 provides that a landlord cannot refuse to rent or lease a house or apartment to another person because of the source of any lawful income received by that person or the source of any lawful rent payment to be paid for the house or apartment. Thus, a landlord is prohibited from refusing to rent to a person solely because of the source of that person's lawful income from sources such as child support or governmental rental assistance. Section 8, established by the Housing and Community Development Act of 1974, codified at 42 U.S.C.A. 1437f, authorizes the Secretary of the Department of Housing and Urban Development (HUD) to enter into annual contribution contracts with local public housing authorities so that they may make assistance payments to owners of existing dwelling units. Under this federal rent assistance program, the tenant generally pays no more than thirty percent of his or her household income toward the monthly rent. The balance of the fair market rent, as established by HUD, is paid by the housing authority to the owner. Sava Holding Corporation (Sava) owned an eighteen-unit residential development located at 211 64th Street, West New York, New Jersey. All tenants in the building were subject to verbal month-to-month leases. N.M., a sixty-five-year-old widow who was unable to work, had been a tenant in the building since 1991. N.M.'s sole source of income was monthly Social Security benefits totaling $521.80. The monthly rent was $450, but Sava agreed to reduce her rent to $425 per month. The building was subject to the West New York Rent Control ordinance. On April 22, 1996, the West New York Housing Authority issued N.M. a Section 8 voucher that could be redeemed by the landlord for a portion of N.M.'s monthly rent to be paid by the housing authority. On April 24, 1996, N.M. gave Sava the voucher and other necessary documents to be applied to her next month's rent. Sava refused to accept the voucher or to execute the documents because it did not want to become entangled with the bureaucracy of the Section 8 program. Sava had never before participated in the Section 8 program nor any other federal or state rental assistance program. On May 1996, Sava filed a summons and complaint in tenancy against N.M., alleging non-payment of rent. The trial court held that Sava was not required to accept a Section 8 voucher and that N.J.S.A. 2A:42-100 was preempted under the Supremacy Clause because it interfered with the voluntary nature of the federal Section 8 program. Thereafter, a judgment of possession was entered and N.M. was ordered to pay the total rent due. N.M. filed a notice of appeal. In March 1997, Sava sold the building to Franklin Tower One, L.L.C. (Franklin Tower), the successor in interest to Sava and the named party in this appeal. The Appellate Division reversed the decision of the trial court, holding that N.J.S.A. 2A:42-100 prohibits landlords from refusing to accept Section 8 vouchers. The Appellate Division based its decision on case law and New Jersey's strong public policy to secure affordable housing for low-income people. Moreover, the court did not perceive a conflict between N.J.S.A. 2A:42-100 and Section 8; therefore, it held that the State statute was not preempted. The Supreme Court granted Franklin Tower's petition for certification. HELD: The requirements N.J.S.A. 2A:42-100, which prohibits landlords from refusing to accept a Section 8 voucher from an existing tenant, do not stand as an obstacle to the accomplishment of the objectives of the Section 8 federal assistance program; rather, they advance those goals. Thus, the statute is not preempted by U.S.C.A. 1437f. 1. The federal legislation and regulations explicitly contemplate that the states will work with the federal government to implement the Section 8 program. The federal regulations indicate that landlords are permitted to evaluate the fitness of Section 8 recipients as they would any other prospective tenant. Several courts have found that the federal scheme does not require landlords to participate in the Section 8 program. (pp. 6-13) 2. M.T. v. Kentwood Construction is the only published opinion in New Jersey that has addressed N.J.S.A. 2A:42-100. That case is distinguishable because it was limited to existing tenants who become eligible for Section 8 vouchers during their tenancy and the owner had previously accepted other tenants' Section 8 vouchers. (pp. 13-17) 3. Federal law will preempt a state statute when: 1) Congress expresses an explicit intent to preempt state law; 2) the federal legislation is so comprehensive that it creates the inference that Congress intended to leave no room for state regulation; and 3) state law actually conflicts with federal law. Conflict preemption occurs where compliance with the state and federal law is impossible or where state law stands as an obstacle to the accomplishment of the goals of the federal legislative scheme. State laws imposing stricter requirements than federal law are not necessarily preempted. (pp. 17-21) 4. A landlord's refusal to accept a Section 8 voucher violates the letter and spirit of N.J.S.A. 2A:42-100. The plain language of the statute, the legislative history, and this State's important policy of providing protection for low-income tenants all support the conclusion that N.J.S.A. 2A:42-100 encompasses Section 8 vouchers. It is highly unlikely that the Legislature would have intended to permit the eviction of a tenant solely due to the fact that she is qualified for federal assistance through Section 8. (pp. 21-22) 5. There is nothing in the federal statute explicitly preempting state legislation requiring landlords to honor Section 8 vouchers. Nor is the federal statute so comprehensive as to create an inference that Congress intended that there be no state regulation. Rather, Section 8 contemplates substantial state participation. The Court is unpersuaded that the State statute cannot be harmonized with federal law. The application of the anti-discrimination provision of N.J.S.A. 2A:42-100 to protect tenants who are eligible to receive Section 8 vouchers will neither conflict with nor frustrate the objectives of Congress in enacting the Section 8 program. (pp. 22-25) 6. Because N.M. was residing in Franklin Tower's building when she became eligible for Section 8 assistance, the Court need not decide whether a property owner who has never participated in the Section 8 program would be required to accept a new tenant who was receiving Section 8 assistance at the time of applying for tenancy. It is noted; however, that N.J.S.A. 2A:42-100 makes no distinction between existing and prospective tenants. (pp. 25-28) Judgment of the Appellate Division is AFFIRMED. CHIEF JUSTICE PORITZ and JUSTICES HANDLER, POLLOCK, O'HERN GARIBALDI and COLEMAN join in JUSTICE STEIN'S opinion. SUPREME COURT OF NEW JERSEY A- 159 September Term 1997 FRANKLIN TOWER ONE, L.L.C., as successor in interest to SAVA HOLDING CORPORATION, Plaintiff-Appellant, v. N.M., Defendant-Respondent. Argued October 26, 1998 -- Decided March 23, 1999 On certification to the Superior Court, Appellate Division, whose opinion is reported at 304 N.J. Super. 586 (1997). Tara P. D'Amato argued the cause for appellant. John N. Ukegbu argued the cause for respondent (Timothy K. Madden, Director, Hudson County Legal Services Corporation). Joseph Harris David argued the cause for amicus curiae Legal Services of New Jersey (Melville D. Miller Jr., President, attorney;Mr. Miller and Mr. David, on the brief). Cheryl R. Clarke, Deputy Attorney General, argued the cause for amicus curiae State of New Jersey, Department of Community Affairs (Peter Verniero, Attorney General of New Jersey, attorney; Joseph L. Yannotti, Assistant Attorney General, of counsel; Ms. Clarke and Keith A. Costill, Deputy Attorney General, on the brief). David L. Harris submitted a brief on behalf of amici curiae National Housing Law Project, The Judge David L. Bazelon Center on Mental Health Law, The Connecticut Fair Housing Center, Connecticut Legal Services, Inc. and The St. Paul Tenants' Union (Lowenstein Sandler, attorneys). Norman A. Feinstein submitted a brief on behalf of amici curiae National Multi Housing Council, National Apartment Association, National Leased Housing Association, National Association of Home Builders, New Jersey Apartment Association, Manufactured Housing Institute and Institute of Real Estate Management (Feinstein, Raiss & Klein, attorneys; Mr. Feinstein and Charles L. Edson, a member of the Missouri bar and Harry J. Kelly, a member of the Maryland bar, on the brief). Joan E. Pransky relied on brief submitted by Legal Services of New Jersey on behalf of amicus curiae New Jersey Tenants Organization. The opinion of the Court was delivered by STEIN, J. In 1981, as part of [a]n Act making it unlawful to refuse to rent to persons with children under certain circumstances and to refuse to rent to a person because of objections to the person's source of income, the New Jersey Legislature enacted N.J.S.A. 2A:42-100, which provides, in pertinent part: No person, firm or corporation or any agent, officer or employee thereof shall refuse to rent or lease any house or apartment to another person because of the source of any lawful income received by the person or the source of any lawful rent payment to be paid for the house or apartment. The purpose of the act, in part, was to prohibit[] a landlord from refusing to rent to a person merely because of objections to the source of the person's lawful income. Assembly Commerce, Industry and Professions Committee, Statement to A. 994 (May 1, 1980). In a press release accompanying the signing of the legislation, Governor Byrne stated that its purpose was to protect from housing discrimination welfare recipients, spouses dependent on alimony and child support payments and tenants receiving governmental rental assistance. Office of the Governor, News Release at 1 (Dec. 9, 1981). The issue presented in this appeal is whether N.J.S.A. 2A:42-100 prohibits a landlord that has never participated in the federal Section 8 rental assistance program, 42 U.S.C.A. 1437f, from refusing to accept a Section 8 voucher from one of the landlord's existing tenants who becomes eligible for Section 8 assistance during the course of her tenancy. Specifically, we must decide whether N.J.S.A. 2A:42-100 encompasses Section 8 payments and, if so, whether it is preempted by the federal legislation. The trial court found that the state statute did not encompass Section 8 vouchers and that, even if it did, it is preempted by the federal statute. The Appellate Division reversed, holding that N.J.S.A. 2A:42-100 requires property owners to accept Section 8 vouchers, and that there is no preemption. 304 N.J. Super. 586, 589-90 (1997). We granted the property owner's petition for certification. 152 N.J. 364 (1998). See also N.J.S.A. 2A:18-61.1a (setting forth legislative findings and intent of Anti-Eviction Act). CHIEF JUSTICE PORITZ and JUSTICES HANDLER, POLLOCK, O'HERN, GARIBALDI, and COLEMAN join in JUSTICE STEIN's opinion. NO. A-159 FRANKLIN TOWER ONE, L.L.C., as successor in interest to SAVA HOLDING CORPORATION, Plaintiff-Appellant, v. N.M., Defendant-Respondent. DECIDED