SENATE, No. 523
STATE OF NEW JERSEY
220th LEGISLATURE
PRE-FILED FOR INTRODUCTION IN THE 2022 SESSION
Sponsored by:
Senator M. TERESA RUIZ
District 29 (Essex)
Senator SHIRLEY K. TURNER
District 15 (Hunterdon and Mercer)
SYNOPSIS
Expands liability of certain individuals associated with limited liability
companies and other commercial entities, when acting as residential landlord.
CURRENT VERSION OF TEXT
As reported by the Senate Community and Urban Affairs Committee with
technical review.
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EXPLANATION – Matter enclosed in bold-faced brackets [thus] in the above bill is
not enacted and is intended to be omitted in the law.
Matter underlined thus is new matter.
AN ACT concerning rental housing and liability of individuals 1
associated with limited liability companies and other commercial 2
entities, and supplementing and amending various parts of the 3
statutory law. 4
5
BE IT ENACTED by the Senate and General Assembly of the State 6
of New Jersey: 7
8
1. (New section) a. A court may hold a corporation, limited 9
liability company, or other legal or commercial entity liable for 10
charges issued to that entity pursuant to a housing code, building 11
code, or health code. 12
b. Notwithstanding any provision of section 30 of the “Revised 13
Uniform Limited Liability Company Act,” P.L.2012, c.50 (C.42:2C-14
30), or any other provision of law to the contrary, with regard to any 15
charge issued following the effective date of 16
P.L. , c. (C. ) (pending before the Legislature as this bill), a 17
court may hold the members of a member-managed limited liability 18
company, the managers of a manager-managed limited liability 19
company, and the directors and officers of a corporation, jointly and 20
severally liable for housing code, building code, or health code 21
charges, so long as: 22
(1) there are at least three charges concerning the property leased 23
by the entity for residential purposes; 24
(2) at least three charges remain unpaid on the first day of the 25
thirteenth month next following the due date of the first charge; 26
(3) notice of the charge and impending enforcement under this 27
section has been issued to the address of the record owner, the 28
registered agent, the managing agent, the members and managers in 29
the case of a limited liability company, the directors and officers in 30
the case of a corporation, and each holder of a recorded mortgage and 31
other existing lienholders, if provided within the landlord’s 32
registration information pursuant to section 2 of P.L.1974, c.50 33
(C.46:8-28). If the landlord is not registered, in violation of section 34
2 of P.L.1974, c.50 (C.46:8-28), then the notice required under this 35
paragraph shall not apply. The notice provided to an individual 36
pursuant to this paragraph shall be sufficient even if the corporation 37
or limited liability company ceases to own the property, so long as 38
the same individual has a role as a registered agent, managing agent, 39
member, manager, director, or officer of the commercial entity 40
serving as the new owner of the property; 41
(4) the individual, if a member of a member-managed limited 42
liability company, possesses at least a 10 percent interest in the 43
business; and 44
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(5) the individual does not successfully assert an affirmative 1
defense pursuant to subsection c. of this section. 2
c. It is an affirmative defense to joint and several liability under 3
this section, if the defendant did not have the ability to ensure 4
payment of the charge, due to a limited duration of involvement with 5
the commercial entity or for another reason, if determined by the 6
court to eliminate the defendant’s culpability for the non-payment of 7
the charge. 8
d. As used in this section, “charge” means any fee, fine, penalty, 9
or other charge issued to a landlord, concerning residential property 10
leased by the landlord, pursuant to a housing, building, or health 11
code. 12
13
2. (New section) a. A court may hold a corporation, limited 14
liability company, or other legal or commercial entity liable for 15
charges issued to that entity pursuant to the "Hotel and Multiple 16
Dwelling Law," P.L.1967, c.76 (C.55:13A-1 et seq.). 17
b. Notwithstanding any provision of section 30 of the “Revised 18
Uniform Limited Liability Company Act,” P.L.2012, c.50 (C.42:2C-19
30), or any other provision of law to the contrary, with regard to any 20
charge issued following the effective date of 21
P.L. , c. (C. ) (pending before the Legislature as this bill), a 22
court may hold the members of a member-managed limited liability 23
company, the managers of a manager-managed limited liability 24
company, and the directors and officers of a corporation, jointly and 25
severally liable for charges issued pursuant to the "Hotel and 26
Multiple Dwelling Law," P.L.1967, c.76 (C.55:13A-1 et seq.), so 27
long as: 28
(1) there are at least three charges concerning the property leased 29
by the entity for residential purposes; 30
(2) at least three charges remain unpaid on the first day of the 31
thirteenth month next following the due date of the first charge; 32
(3) notice of the charge and impending enforcement under this 33
section has been issued to the address of the record owner, the 34
registered agent, the managing agent, the members and managers in 35
the case of a limited liability company, the directors and officers in 36
the case of a corporation, and each holder of a recorded mortgage and 37
other existing lienholders, if provided within the landlord’s 38
registration information pursuant to section 2 of P.L.1974, c.50 39
(C.46:8-28). If the landlord is not registered, in violation of section 40
2 of P.L.1974, c.50 (C.46:8-28), then the notice required under this 41
paragraph shall not apply. The notice provided to an individual 42
pursuant to this paragraph shall be sufficient even if the corporation 43
or limited liability company ceases to own the property, so long as 44
the same individual has a role as a registered agent, managing agent, 45
member, manager, director, or officer of the commercial entity 46
serving as the new owner of the property; 47
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(4) the individual, if a member of a member-managed limited 1
liability company, possesses at least a 10 percent interest in the 2
business; and 3
(5) the individual does not successfully assert an affirmative 4
defense pursuant to subsection c. of this section. 5
c. It is an affirmative defense to joint and several liability under 6
this section, if the defendant did not have the ability to ensure 7
payment of the charge, due to a limited duration of involvement with 8
the commercial entity or for another reason, if determined by the 9
court to eliminate the defendant’s culpability for the non-payment of 10
the charge. 11
d. As used in this section, “charge” means any fee, fine, penalty, 12
or other charge issued to a landlord, concerning residential property 13
leased by the landlord, pursuant to the "Hotel and Multiple Dwelling 14
Law," P.L.1967, c.76 (C.55:13A-1 et seq.). 15
16
3. (New section) a. With regard to any charge issued following 17
the effective date of P.L. , c. (C. ) (pending before the 18
Legislature as this bill), the directors of a corporation shall be jointly 19
and severally liable for: 20
(1) housing code, building code, or health code charges, so long 21
as the conditions under subsection b. of section 1 of P.L. , c. (C ) 22
(pending before the Legislature as this bill) have been satisfied; and 23
(2) charges issued pursuant to the "Hotel and Multiple Dwelling 24
Law," P.L.1967, c.76 (C.55:13A-1 et seq.), so long as the conditions 25
under subsection b. of section 2 of P.L. , c. (C. ) (pending 26
before the Legislature as this bill) have been satisfied. 27
b. As used in this section, “charge” means any fee, fine, penalty, 28
or other charge issued to a landlord, concerning residential property 29
leased by the landlord, pursuant to a housing, building, or health 30
code, and any charge issued pursuant to the "Hotel and Multiple 31
Dwelling Law," P.L.1967, c.76 (C.55:13A-1 et seq.). 32
33
4. (New section) a. With regard to any charge issued following 34
the effective date of P.L. , c. (C. ) (pending before the 35
Legislature as this bill), the officers of a corporation shall be jointly 36
and severally liable for: 37
(1) housing code, building code, or health code charges, so long 38
as the conditions under subsection b. of section 1 of P.L. , c. 39
(C. ) (pending before the Legislature as this bill) have been 40
satisfied; and 41
(2) charges issued pursuant to the "Hotel and Multiple Dwelling 42
Law," P.L.1967, c.76 (C.55:13A-1 et seq.), so long as the conditions 43
under subsection b. of section 2 of P.L. , c. (C. ) (pending 44
before the Legislature as this bill) have been satisfied. 45
b. As used in this section, “charge” means any fee, fine, penalty, 46
or other charge issued to a landlord, concerning residential property 47
leased by the landlord, pursuant to a housing, building, or health 48
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code, and any charge issued pursuant to the "Hotel and Multiple 1
Dwelling Law," P.L.1967, c.76 (C.55:13A-1 et seq.). 2
3
5. Section 30 of P.L.2012, c.50 (C.42:2C-30) is amended to read 4
as follows: 5
30. a. The debts, obligations, or other liabilities of a limited 6
liability company, whether arising in contract, tort, or otherwise: 7
(1) are solely the debts, obligations, or other liabilities of the 8
company; and 9
(2) do not become the debts, obligations, or other liabilities of a 10
member or manager solely by reason of the member acting as a 11
member or manager acting as a manager. 12
b. The failure of a limited liability company to observe any 13
particular formalities relating to the exercise of its powers or 14
management of its activities is not a ground for imposing liability on 15
the members or managers for the debts, obligations, or other 16
liabilities of the company. 17
c. Notwithstanding any provision of this section to the contrary, 18
with regard to any charge issued following the effective date of P.L., 19
c. (C. ) (pending before the Legislature as this bill), the members 20
of a member-managed limited liability company who possess at least 21
a 10 percent interest in the business, and the managers of a manager-22
managed limited liability company, shall be jointly and severally 23
liable for: 24
(1) housing code, building code, or health code charges, so long 25
as the conditions under subsection b. of section 1 of 26
P.L. , c. (C. ) (pending before the Legislature as this bill) 27
have been satisfied; and 28
(2) charges issued pursuant to the "Hotel and Multiple Dwelling 29
Law," P.L.1967, c.76 (C.55:13A-1 et seq.), so long as the conditions 30
under subsection b. of section 2 of P.L. , c. (C. ) (pending 31
before the Legislature as this bill) have been satisfied. 32
(cf: P.L.2012, c.50, s.30) 33
34
6. Section 2 of P.L.1974, c.50 (C.46:8-28) is amended to read as 35
follows: 36
2. Every landlord shall, within 30 days following the effective 37
date of [this act] P.L.1974, c.50 (C.46:8-28), or at the time of the 38
creation of the first tenancy in any newly constructed or 39
reconstructed building, file with the clerk of the municipality, or with 40
such other municipal official as is designated by the clerk, in which 41
the residential property is situated, in the case of a one-dwelling unit 42
rental or a two-dwelling unit non-owner occupied premises, or with 43
the Bureau of Housing Inspection in the Department of Community 44
Affairs in the case of a multiple dwelling as defined in section 3 of 45
the "Hotel and Multiple Dwelling Law" (C.55:13A-3), a certificate 46
of registration on forms prescribed by the Commissioner of 47
Community Affairs, which shall contain the following information: 48
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a. The name and address of the record owner or owners of the 1
premises and the record owner or owners of the rental business if not 2
the same persons. In the case of a partnership the names of all general 3
partners shall be provided; 4
b. If the record owner is a corporation, a limited liability 5
company, or any other legal or commercial entity, the name and 6
address of the registered agent, the members with at least a 10 percent 7
interest in a member-managed limited liability company, the 8
managers of a manager-managed limited liability company, and 9
[corporate] the officers [of said corporation] and directors of a 10
corporation, as applicable; 11
c. If the address of any record owner is not located in the county 12
in which the premises are located, the name and address of a person 13
who resides in the county in which the premises are located and is 14
authorized to accept notices from a tenant and to issue receipts 15
therefor and to accept service of process on behalf of the record 16
owner; 17
d. The name and address of the managing agent of the premises, 18
if any; 19
e. The name and address, including the dwelling unit, apartment 20
or room number of the superintendent, janitor, custodian or other 21
individual employed by the record owner or managing agent to 22
provide regular maintenance service, if any; 23
f. The name, address and telephone number of an individual 24
representative of the record owner or managing agent who may be 25
reached or contacted at any time in the event of an emergency 26
affecting the premises or any unit of dwelling space therein, 27
including such emergencies as the failure of any essential service or 28
system, and who has the authority to make emergency decisions 29
concerning the building and any repair thereto or expenditure in 30
connection therewith and shall, at all times, have access to a current 31
list of building tenants that shall be made available to emergency 32
personnel as required in the event of an emergency; 33
g. The name and address of every holder of a recorded mortgage 34
on the premises; 35
h. If fuel oil is used to heat the building and the landlord 36
furnishes the heat in the building, the name and address of the fuel 37
oil dealer servicing the building and the grade of fuel oil used. 38
(cf: P.L.2003, c.56, s.2) 39
40
7. Section 3 of P.L.1981, c.442 (C.46:8-28.1) is amended to read 41
as follows: 42
3. In the case of a filing under section 2 of P.L.1974, c.50 43
(C.46:8-28) with the municipal clerk, or with such other municipal 44
official as is designated by the clerk, the clerk or designated official 45
shall index and file the certificate [and] , make it reasonably 46
available for public inspection, and shall notify the construction 47
official, appointed pursuant to section 8 of P.L.1975, c.217 48
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(C.52:27D-126), of the name and address of the record owner, and 1
registered agent as applicable. In the case of a filing with the Bureau 2
of Housing Inspection, the filing shall be accompanied by the filing 3
fee required pursuant to section 12 of P.L.1967, c. 76 (C. 55:13A-4
12). The bureau shall review the certificate and, if it is found to be in 5
conformity with this law and any regulations promulgated hereunder, 6
validate the certificate and issue a validated copy to the landlord and 7
a validated copy to the clerk of the municipality in which the building 8
or project is located. The clerk shall index the validated certificates, 9
or forward them to the designated official for indexing, and the 10
certificates shall be made available as with the certificates required 11
of one and two dwelling unit nonowner occupied premises. 12
(cf: P.L.2001, c.264, s.2) 13
14
8. (New section) a. A municipality may direct by ordinance of 15
the governing body that any charge issued to a landlord pursuant to a 16
housing code, building code, or health code, concerning residential 17
property leased by the landlord, shall become a lien on the property, 18
enforceable in the manner provided for real property tax liens in 19
chapter 5 of Title 54 of the Revised Statutes, if the charge remains 20
unpaid on the first day of the thirteenth month next following the date 21
when the charge becomes due and owing. At least 90 days prior to 22
filing an unpaid charge as a municipal lien against the property 23
pursuant to this section, the municipality shall serve written notice to 24
the property owner, and the other parties in interest, indicating that if 25
the charge remains unpaid it shall be converted into a municipal lien, 26
and shall provide the owner the opportunity to pay the fine or request 27
a hearing before a court of competent jurisdiction. If the landlord is 28
not registered, in violation of section 2 of P.L.1974, c.50 (C.46:8-29
28), then this additional notice requirement concerning the landlord 30
shall not apply prior to conversion into a municipal lien. In a 31
municipality that has adopted an ordinance under this subsection, at 32
the time when the charge becomes a lien, the municipal officer 33
responsible for housing code enforcement shall file a copy of the lien 34
and certification with the municipal tax collector. This lien shall be 35
added to and become and form part of the taxes next to be assessed 36
and levied upon such dwelling or lands, the same to bear interest at 37
the same rate as taxes, and shall be collected and enforced by the 38
same officers and in the same manner as taxes. 39
b. As used in this section, “charge” means any fee, fine, penalty, 40
or other charge issued to a landlord, concerning residential property 41
leased by the landlord, pursuant to a housing, building, or health 42
code. 43
44
9. This act shall take effect immediately. 45