Interesting appellate decision on rent control hardship appeals
I ran across this trying to help someone in another thread. It's a very interesting NJ Appellate Court decision that says that in an appeal of low controlled rents "fair return on equity" does not relate to your actual cash investment, but to the value of the property. This is a little weird in that the value of a commercial, rent controlled property is largely dictated by it's low rents!
The case involved property that was inherited and had no loan, so there was no cash investment.
While the Jersey City ordinance establishes what constitutes a fair return when a landlord has made an investment in rental property, the ordinance does not provide how a landlord is to realize a fair return when no investment has been made.4 However, consistent with Hutton, the ordinance must be read as though it does permit a landlord under these circumstances to realize a fair return on property.
What was really a riot was that the tenants were trying to reduce their rents already under $500 down to $150! I actually knew one of them 20 years ago, burned me for a few hundred bucks.