N.J. Stat. Ann. § 2A:18-51 et seq. § 2A:18-61.31
Rent increase restrictions
Operative Text
In a municipality which does not have a rent control ordinance in effect, no evidence of increased costs which are solely the result of the conversion, including but not limited to any increase in financing or carrying costs, and which do not add services or amenities not previously provided shall be used as a basis to establish the reasonableness of a rent increase under section 2f. of P.L. 1974, c. 49 (C. 2A:18-61.1). In a municipality which has a rent control ordinance in effect, a rent increase for a tenant with a protected tenancy status, or for any tenant to whom notice of termination pursuant to section 3g. of P.L. 1974, c. 49 (C. 2A:18-61.2) has been given, shall not exceed the increase authorized by the ordinance for rent controlled units. Increased costs which are solely the result of a conversion, including but not limited to any increase in financing or carrying costs, and which do not add services or amenities not previously provided shall not be passed directly through to these tenants as surcharges or pass-throughs on the rent, shall not be used as the basis for a rent increase, and shall not be used as a basis for an increase in a fair return or hardship hearing before a municipal rent board or on any appeal from such determination. L. 1981, c. 226, s. 10; amended by L. 1987, c. 287, s. 3.
Under N.J.S.A. 2A:18-61.31, when a rental property undergoes a conversion (such as to condominium or cooperative ownership), any cost increases that result solely from that conversion — like higher financing or carrying costs — cannot be used to justify rent increases if those costs don't add new services or amenities. In municipalities without rent control, such conversion-related costs cannot serve as a basis for establishing a 'reasonable' rent increase. In municipalities with rent control, tenants who hold protected tenancy status or who have received a termination notice under the related statute are further shielded: their rent increases are capped at whatever the local ordinance allows, and conversion costs cannot be passed through as surcharges or used in fair-return or hardship hearings.
Plain English — not legal advice.
Property owners and managers overseeing converted buildings in New Jersey should be aware that N.J.S.A. 2A:18-61.31 draws a clear line between legitimate cost increases and those arising purely from a conversion. In municipalities without rent control, compliant operators base any rent increase justification on factors other than conversion-related financing or carrying costs that provide no new services or amenities. In rent-controlled municipalities, operators generally ensure that rent increases for protected tenants or those who have received termination notices do not exceed the locally authorized amount, and they avoid presenting conversion-only costs as surcharges, pass-throughs, or grounds for relief at a municipal rent board hearing.
General guidance for property managers — not legal advice for your specific situation. Consult an attorney for advice on your case.
N.J.S.A. 2A:18-61.31 provides meaningful protections for renters living in buildings that have undergone or are undergoing a conversion. If a landlord attempts to raise rent based solely on conversion-related costs — such as increased financing expenses — without adding any new services or amenities, that increase may not be permissible under this provision. Tenants with protected tenancy status or those who have received a qualifying termination notice in a rent-controlled municipality may be able to raise this provision as a defense against improper surcharges or excess increases, and can explore options such as filing a complaint with their local municipal rent board or reaching out to a tenant-rights organization for general guidance.
General guidance for tenants — not legal advice for your specific situation. Consult a tenant-rights organization or attorney for advice on your case.
Generated October 14, 2026 — auto-generated, not yet human-reviewed. See /transparency for methodology.
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