Unlike Municipal License Fees for Landlords, Municipal Fees to Defray Costs of Inspecting Apartment Units Are Authorized

Cona v. Township of Washington, 456 N.J. Super. 197 (App. Div. 2018).  In Timber Glen Phase III, LLC v. Hamilton Tp., 441 N.J. Super. 514 (App. Div. 2015), the Appellate Division ruled that a local ordinance that required landlords to obtain a license before any unit could be leased and pay an annual fee for the license was ultra vires as beyond the authority of the Licensing Act, N.J.S.A. 40:52-1.  That case distinguished between “the powers to regulate and to license,” and noted that it did not “address [a municipality’s] regulatory or inspection authority granted by other statutes designed to assure rental premises remain safe, building and fire code compliant structurally sound.”

Today, in a decision by Judge Rothstadt in these consolidated putative class actions, the Appellate Division affirmed the grants of motions to dismiss for failure to state a claim.  The cases were based on Timber Glen, but this time the fees of which plaintiffs complained were charged not for licenses but “to defray costs for inspections or registrations of rental units,” the issue expressly reserved by Timber Glen.  Judge Rothstadt applied de novo review and upheld the dismissals essentially for the reasons given by the two Law Division judges who had handled these cases below, Judges David Morgan and Jean McMaster.  “[N]one of the challenged ordinances were ultra vires in that the fees charged under them were reasonably related to the municipalities’ exercise of their obligation to promote the safety and welfare of their residents.”