Court Opinion

ID: 4583953
Source: CourtListenerOpinion
Date Created: 2020-11-05 15:07:58.498281+00
Date Added: 2024-06-11T13:46:01.177004
License: Public Domain

NOT FOR PUBLICATION WITHOUT THE
                               APPROVAL OF THE APPELLATE DIVISION
        This opinion shall not "constitute precedent or be binding upon any court." Although it is posted on the
     internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.

                                                        SUPERIOR COURT OF NEW JERSEY
                                                        APPELLATE DIVISION
                                                        DOCKET NO. A-5382-18T1

GARDEN SPIRES URBAN
RENEWAL, LP

          Plaintiff-Respondent,

v.

OLIVE YANFORD,

     Defendant-Appellant.
_________________________

                   Argued October 22, 2020 – Decided November 5, 2020

                   Before Judges Mawla and Natali.

                   On appeal from the Superior Court of New Jersey, Law
                   Division, Essex County, Docket No. LT-013235-19.

                   Jose L. Ortiz argued the cause for appellant (Essex-
                   Newark Legal Services, attorneys; Maria D. Castruita
                   and Jose L. Ortiz, on the briefs).

                   Matthew A. Sebera argued the cause for respondent
                   (Ehrlich, Petriello, Gudin & Plaza, attorneys; Charles
                   R. Isaacs, on the brief).

PER CURIAM
      Defendant Olive Yanford appeals from an August 5, 2019 Special Civil

Part order granting a judgment of possession to plaintiff Garden Spires Urban

Renewal, LP (Garden Spires), based on defendant's alleged failure to pay rent.

Because the record shows plaintiff failed to comply with applicable federal

regulations when it increased defendant's rent, we reverse.

                                     I.

      Plaintiff is the owner of a residential housing complex in Newark, having

purchased the property in August 2018 from First King Properties, LLC (First

King), and receives funding from the United States Department of Housing and

Urban Development (HUD) under the Section 8 Program.             According to

defendant, she became a tenant in the housing complex in October 2000, after

executing a lease for a subsidized apartment. At the time of the trial court

proceedings, defendant lived in the apartment with her daughter and

granddaughter.

      On May 9, 2019, plaintiff filed a complaint seeking a judgment of

possession claiming defendant failed to pay $2150 in monthly rent due for

January through May 2019. Defendant moved to dismiss the complaint arguing

the court lacked jurisdiction because plaintiff failed to comply with the

applicable federal regulations when it terminated defendant's Section 8 rental

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subsidy and increased defendant's personal monthly rent obligations on

September 1, 2018, from $25 to $2150. On August 5, 2019, the court denied

defendant's motion to dismiss the complaint and entered a judgment of

possession. This appeal followed.

      As the owner of a subsidized housing facility, plaintiff is required to

annually reexamine and determine the family income and composition of each

tenant receiving Section 8 subsidies. 24 C.F.R. § 5.657(b) (2020). Tenants, for

their part, are required to "supply any information requested by the owner or

HUD for use in a regularly scheduled reexamination or an interim reexamination

of family income and composition in accordance with HUD requirements." Id.

at § 5.659(b)(2). HUD regulations require cooperation by a tenant with the

landlord by providing information in annual recertification forms.

      The policies and procedures governing the recertification process a re

contained in a handbook published by HUD. See U.S. Dep't of Hous. and Urban

Dev., HUD Handbook No. 4350.3 REV-1, Occupancy Requirements of

Subsidized Multifamily Housing Programs (2013) (HUD Handbook). "The

HUD Handbook 'is a one-source "rule book" on the occupancy policies and

procedures governing the subsidized multifamily programs' of HUD." Kuzuri

Kijiji, Inc. v. Bryan, 371 N.J. Super. 263, 265 (App. Div. 2004).

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      All recertifications must be completed prior to the tenant's recertification

anniversary date, which is the first day of the month in which a tenant first

moved into the property.        HUD Handbook at § 7–5(A), (B)(1).             Such

recertifications are required to ensure "tenants pay rents commensurate with

their ability to pay." Id. at § 7–4(A).

      Section 7–7A of the HUD Handbook requires owners to provide tenants

with four, separate written notices regarding a tenant's responsibility to provide

information about "changes in family income or composition necessary to

properly complete an annual recertification."      The owner must provide an

"Initial Notice" each year that "serves to ensure that tenants understand that they

will need to report to the property's management office by the specified date the

following year to prepare for their next recertification." Id. at § 7–7B.1. "The

tenant must sign and date the initial notice to acknowledge receipt; the owner or

manager must sign and date the notice as a witness" and "[t]he owner must

maintain the notice with original signatures in the tenant's file and provide a

copy of the signed notice to the tenant." Id. at § 7–7B.1.b, c.

      An owner must then send a tenant three reminder notices. The first must

be sent 120 days prior to the tenant's recertification anniversary date to ensure

the tenant is advised of "the cutoff date by which the tenant must contact the

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owner and provide the information and signatures necessary for the owner to

process the recertification." Id. at §§ 7–7B.2.a, 7–7B.2.b(5).

      In the event the tenant fails to respond by failing to appear at the property's

management office, an owner is thereafter obligated to send a second reminder

notice no less than ninety days prior to the annual recertification date. Id. at §

7–7B.3.a. To the extent a tenant remains noncompliant and has not completed

the required paperwork for recertification, the owner is required to send a third

reminder notice at least sixty days prior to the recertification date. Id. at § 7–

7B.4.a.

      The sixty-day notice must contain additional information including "the

amount of rent the tenant will be required to pay if the tenant fails to provide the

required recertification information by the recertification anniversary date and

state that this rent increase will be made without additional notice." Id. at § 7–

7B.4.b(2). The Handbook obligates an owner to maintain a copy of each of these

notices "in the tenant file documenting the date the notice was issued." Id. at §§

7–7B.2.c; 7–7B.3.c; 7–7B.4.c.

      If the owner provides all the required notices and "[t]he tenant reports for

the recertification interview on or after the recertification anniversary date[,] "

then the "[t]enant is out of compliance." Id. at § 7–8D.3.a(2). Under these

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circumstances, the tenant loses his or her federal subsidy and "must begin paying

the market rent." Id. at § 7–8D.3.b. A tenant may, however, still apply for

recertification and have his or her subsidy reinstated if: "(1) [a]ssistance is

available at the property; (2) [t]he tenant submits the required information; and

(3) [t]he owner determines that the tenant qualifies for assistance." Id. at § 7–

8D.3.c.

      Finally, section 7–8D.4 of the HUD Handbook also provides that "[w]hen

a tenant fails to provide the required recertification information by the

recertification anniversary date, an owner must inquire whether extenuating

circumstances prevented the tenant from responding prior to the anniversary

date." "Extenuating circumstances" are defined as "circumstances beyond the

tenant's control." Id. at § 7–8D.4.a. "Examples of extenuating circumstances

include, but are not limited to: (1) [h]ospitalization of the tenant[;] (2) [t]enant

out of town for a family emergency (such as the death or severe illness of a close

family member) [;] (3) [t]enant on military duty overseas." Ibid.

      The parties appear to have conceded at trial that based on defendant's

"anniversary date," see § 7–5(A), (B)(1) of the HUD Handbook, she was

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required to complete her annual recertification in August 2018.1 Defendant did

not recertify by that date and the reasons for that failure were addressed in the

Special Civil Part trial where two of plaintiff's employees testified along with

defendant and her daughter.

      Rachel Pichardo, plaintiff's acting administrative assistant, testified

regarding First King's ownership of the property and plaintiff's compliance with

the notice provisions in the HUD Handbook. She described the property at the

time of transfer from First King as "practically dilapidated . . . from negligence,"

with relevant paperwork "literally stuffed in bags [and] in boxes."

      Despite having no personal knowledge of First King's attempts to recertify

defendant, Pichardo stated that First King sent defendant recertification notices

on May 1, June 1, and July 1, 2018. 2 Pichardo, who repeatedly characterized

1
   We were not able to independently confirm defendant's anniversary date or
recertification date, as a copy of the applicable lease was neither marked for
identification at trial nor moved into evidence and is not contained in the record
on appeal. A "resident ledger," however, indicates that defendant's lease
incepted in September 2000 and on appeal defendant represents that she moved
into her apartment in October 2000. As our decision does not turn on whether
defendant's anniversary date for recertification was in August, September, or
October, we accept for purposes of our opinion that defendant's recertification
was required to be completed in August 2018.
2
  Plaintiff's counsel represented to the court that because his client purchased
the property in August 2018, he could not "speak to [the] prior recertifications."

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defendant's subsidized rent as a "gift," stated that plaintiff also sent out notices

to defendant, although she failed to identify when such notices were sent or the

contents of any letter.3 Pichardo also stated that despite attempts to contact

defendant as early as October, plaintiff's representatives first met with defendant

in November 2018, to begin the recertification process. Ultimately, the court

deemed the notices sent by First King inadmissible because the individual who

allegedly sent the notices was not called as a witness and the court was therefore

unable to conclude that First King sent the notices or that defendant received

them.

        Katerra Fields, plaintiff's office manager responsible for the Section 8

recertification process, testified regarding plaintiff's attempts to recertify

defendant. She stated that she first met defendant in late-October or early-

November 2018, when defendant walked into her office and placed a letter

advising she was going on vacation "down on the table, and walked right out the

3
  Despite Pichardo's testimony, the only two documents in the record on appeal
that address plaintiff's, as opposed to First King's, written communication
regarding the recertification process are a January 16, 2020 "notice to
cease/comply" which "request[ed] . . . [defendant] . . . come in for an initial
certification on January 13, 2020 at 11:00 [a.m.] to obtain a subsidy, which is
required to live in this property." The letter further advised that any failure to
comply would support "good cause" to terminate the lease. Also contained in
the appellate appendix is a January 31, 2020 "notice to quit and demand for
possession."
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                                         8
door." Fields stated she thereafter attempted to contact defendant by phone

regarding the recertification process but "did not receive any answer from her."

      According to Fields, defendant returned to her office with her daughters ,

who were then also residing in the apartment, on November 20, 2018. Fields

stated that she asked defendant to provide records necessary for the

recertification process including defendant's pay stubs. She explained that she

attempted to contact defendant's employer as defendant submitted non-

consecutive weekly paystubs. Pichardo testified that defendant's daughters also

submitted non-consecutive pay stubs.

      Fields stated that because defendant's recertification was long overdue,

she advised her that plaintiff would extend its deadline for defendant to provide

all outstanding documentation until the next day. Defendant met with Fields

approximately one week later and provided a letter indicating she wanted to

remove her adult children from the lease. Fields advised defendant that in order

to effectuate her request, defendant was required to provide information to

establish their current residence and formally amend the lease.

      According to Fields, defendant never provided the outstanding

information. Fields confirmed, however, that she did not inquire if there were

extenuating circumstances explaining defendant's failure. Fields also stated that

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she did not send any written notices to defendant regarding the recertification

process but orally advised defendant that her subsidy was terminated.

      At the conclusion of Fields' testimony, the court again noted that plaintiff

failed to present a witness from First King regarding the recertification notices.

The court also stated that at the time of the ownership transfer in August 2018,

plaintiff had "ample time to give [defendant] notice that [defendant] needed to

come up with paperwork to be recertified," and it was "totally inappropriate" to

require defendant to "[c]ome back tomorrow and have all your paperwork ready

in one day."

      Having failed to present a competent witness to testify as to proper service

of any of the four required notices, which the court called the "crux" of the case,

the court granted plaintiff's counsel's request for an adjournment to subpoena a

representative of First King, and for plaintiff "to convince HUD to . . . recertify"

defendant. As to the lack of proofs regarding compliance with the recertification

notice provisions, the court found, "there [was] a total lack on the part of the

landlord of sending out and following up on proper notices . . . ."

      The parties returned to court on July 12 and August 5, 2019, after

unsuccessfully attempting to resolve the matter.         At the August 5, 2019

proceeding, plaintiff's counsel addressed the recertification issue by informing

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                                        10
the court that "a good chunk . . . of the prior company's management did stay on

. . . during the transition" and he was prepared to present a witness, Patricia

Stewart, who "personally delivered [the notices] on [defendant's] door as they

[did] every other year." Despite counsel's proffer, neither Stewart nor any other

representative from First King appeared at trial.

      Defendant testified that she successfully recertified in each of the prior

nineteen years without incident. And, contrary to Fields' testimony, defendant's

daughter stated that she went with her mother to plaintiff's office "many times"

in October. Defendant also testified that she provided all requested information

including all her pay stubs and was told "everything is finished" but then

plaintiff's representatives kept "asking me for the same thing over, and over."

Plaintiff accepted defendant's subsidized rent in September, October, and

November 2018 but refused to accept her rent thereafter due to her failure to

recertify.

      At the conclusion of trial, the court entered the August 5, 2019 order under

review which granted plaintiff possession of defendant's apartment unless

defendant paid $8600 representing a portion of the outstanding market rate rent

for the unit. In the court's oral opinion issued that day, the court effectively

denied defendant's motion to dismiss the complaint and found that the "[p]rior

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owner sent notices that there was going to be a recertification." According to

the court, that recertification began in November 2018, when defendant was

advised to bring "four to six pay stubs because someone worked in the

apartment."

      The court also concluded that there were no extenuating circumstances

that would excuse defendant's noncompliance with the recertification process.

The court explained that although defendant had recertified consistently for

nineteen years, it described her attempts at compliance and to obtain rental

assistance after November 2018, as "insufficient." The court also characterized

the circumstances presented as "problematic" and recognized that although the

"transfer in ownership . . . [may] provide[] some gap in the certification

process," it was "hesitant to say that [defendant] is completely off the hook here

because . . . [defendant failed to make] an adequate effort to re-comply."

      The court stayed its order for twenty days to permit defendant to file a

notice of appeal. After defendant perfected her appeal, plaintiff filed a warrant

for removal and defendant was subsequently locked out of her apartment.

Shortly thereafter, the court granted defendant's emergent application to vacate

the warrant of removal and stayed further trial court proceedings.

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                                        II.

      Defendant claims she could not be evicted because the court lacked

jurisdiction to resolve the dispute as plaintiff failed to establish that it served the

required federal recertification notices and failed to take "steps to timely

recertify defendant." We agree, in part, and reverse because the record fails to

contain competent evidence that plaintiff, or First King, properly notified

defendant of the recertification process in accordance with the HUD Handbook.

      A party seeking to overturn a judgment of possession must demonstrate

on appeal that the judge abused his or her discretion in entering the judgment.

Cmty. Realty Mgmt. v. Harris, 155 N.J. 212, 236 (1998). We will not disturb

the factual findings of the trial judge unless "they are so manifestly unsupported

by or inconsistent with the competent, relevant and reasonably credible evidence

as to offend the interests of justice." Klump v. Borough of Avalon, 202 N.J.

390, 412 (2010) (quoting Abtrax Pharm. v. Elkins–Sinn, Inc., 139 N.J. 499, 517

(1995)). We review a trial court's conclusions of law de novo. Manalapan

Realty, L.P. v. Twp. Comm. of Manalapan, 140 N.J. 366, 379 (1995).

      As previously noted, "[u]nder federal law, an owner landlord is required

to satisfy specific requirements when attempting to terminate a subsidized

tenancy. We have held federal requirements to be jurisdictional prerequisites to

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the establishment of good cause for eviction in state court." Riverview Towers

Assocs. v. Jones, 358 N.J. Super. 85, 88 (App. Div. 2003). Further, in Housing

Authority of the City of Newark v. Raindrop, 287 N.J. Super. 222, 231 (App.

Div. 1996), we concluded that a landlord's failure to follow federal notice

requirements for the termination of a lease could not be regarded as "technical

noncompliance" but instead "denied the trial court jurisdiction." See also Winns

v. Rosado, 440 N.J. Super. 98, 106 (Law Div. 2014) (finding plaintiff's failure

to provide notice of the action to the Department of Community Affairs as

required under federal regulations deprived the court of jurisdiction over

plaintiff's complaint for judgment of possession).

      Here, the trial record failed to establish plaintiff served the initial and the

three recertification reminder notices upon defendant.             After correctly

concluding that plaintiff's representative could not testify as to the service and

the contents of notices purportedly sent by First King to which she had no

personal knowledge, the court later found in summary fashion that the notices

were, in fact sent, without explaining the factual basis for that conclusion.

      At trial, plaintiff offered only Pichardo's testimony to establish

satisfaction of the notice requirements. Pichardo, however, did not send out the

notices, a representative of First King allegedly did. In addition, Pichardo did

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not testify to possessing any independent knowledge that defendant was served

properly with any of the four notices or what was contained in those letters,

which are clearly hearsay. See N.J.R.E. 801(c).4

      Further, a proper foundation was not laid to establish the documents as

business records of defendant or First King under N.J.R.E. 803(c)(6 ) nor was

defendant confronted with the notices on cross-examination. We also note that

despite counsel's request to adjourn the June 13, 2019 hearing to subpoena a

representative of First King, and his subsequent proffer regarding the scope of

Stewart's testimony, she never testified at trial. In sum, based on the trial record,

Pichardo was not competent to provide testimony regarding service and the

content of any notices sent by First King and there was no other evidentiary

basis for the court on the trial record to consider the substance of those notices

or conclude they were actually sent by First King and received by defendant.

      Plaintiff contends that under N.J.R.E. 301, it was discharged from

providing proof that First King properly served the four notices because

defendant conceded that she contacted a First King representative in August

4
  The notices were not attached to the complaint for possession as required by
Rule 6:3-4(d). In addition, although the court briefly reviewed the notices
purportedly sent by First King, they were not marked for identification and are
not part of the appellate record.
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                                        15
prior to the sale of the property to commence the recertification process. As

best we can discern from plaintiff's argument, it concludes that this "fact"

establishes a presumption that First King served the four recertification notices

in compliance with the HUD Handbook. It further maintains that N.J.R.E. 611

provides support for the court's factual findings.      We disagree with both

contentions.

      N.J.R.E. 301 permits a presumption discharging a party's burden of

producing evidence of a fact only if "no evidence tending to disprove the

presumed fact is presented" or "the evidence is such that reasonable persons

would not differ" as to the existence or nonexistence of the presumed fact.

N.J.R.E. 301(b), (c). Even assuming defendant had preliminary discussions with

First King representatives in August, that "fact" does not establish that First

King previously effectuated proper service of the four required notices, the

contents of those letters, and plaintiff's compliance with the remaining

procedures in the HUD Handbook. Nor does the court's ability under N.J.R.E.

611(a) to "exercise reasonable control over the mode and order of interrogating

witnesses and presenting evidence," excuse plaintiff from establishing actual

service of each notice consistent with the HUD Handbook.

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      Further, plaintiff's compliance with the notice provisions in the HUD

Handbook was not excused, as the court seemingly concluded, because

defendant purportedly failed to participate to plaintiff's satisfaction in the

"recertification" process commencing in November. The procedures set forth in

the HUD Handbook are clear and straightforward and are detailed to protect the

significant property right a tenant possesses to a Section 8 subsidized housing

voucher, and the federal government's concomitant interests in ensuring an

accurate and equitable distribution of those benefits. These procedures require

a clear record that a landlord properly notified a tenant and memorialized those

interactions. Proper notification and compliance are not satisfied by a post-hoc

oral recertification process.

      We would be remiss if we did not note that defendant lived in her

subsidized unit for nearly twenty years without any difficulty in recertifying,

prior to the change in ownership in August 2018.        We disagree with any

suggestion that defendant's successful prior history with the recertification

process somehow inculpated her with respect to the loss of her certification and

excused, based on the competent evidence at trial, plaintiff's and First King's

non-compliance with the HUD Handbook.

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      In light of our decision that the record failed to establish plaintiff's

compliance with the provisions of the HUD handbook, we need not address

defendant's alternative argument that plaintiff failed to consider appropriately

the extenuating circumstances excusing compliance with the recertification

process. See HUD Handbook, § 7–8D.4.a.

      Accordingly, we reverse and vacate the judgment of possession.

Defendant shall promptly submit, and plaintiff shall properly consider, an

application for recertification. To the extent we have not specifically addressed

any of plaintiff's arguments, it is because we conclude they are without sufficient

merit to warrant discussion in a written opinion. R. 2:11-3(e)(1)(E).

      Reversed.

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