N.J. Stat. tit. 55, ch. 18

in effect

N.J. Stat. § 55:18-1 Definitions

As used in this act: a. "Dwelling unit" means a room or connected rooms within a residential structure forming a self-contained area within that structure and adapted to provide permanent living accommodations for a person or family, including the availability of heat, electricity, water and necessary equipment for the culinary and sanitary requirements of a household of a size for which it is intended. b. "Resident first-time homebuyer" means a natural person, or the unit of husband and wife considered as joint tenants or tenants by the entirety, who is not and has never been the owner of, or holder of an ownership interest in, residential property in this State, exclusive of any interest as a stockholder or partner in a corporation or limited partnership, or as trustee for another person or persons; who enters or proposes to enter into a lease agreement with a municipality under the terms of this act; and who at the time of entering into such a lease is a bona fide resident of that municipality. c. "Housing corporation" means any corporation formed under the provisions of Title 15 of the Revised Statutes, which by its certificate of incorporation as issued or amended is empowered to engage in the activity of developing, constructing and operating residential accommodations for persons of low and moderate income, or any private, limited-dividend or nonprofit housing corporation organized in accordance with the provisions of the "Limited-Dividend Nonprofit Housing Corporations or Associations Law," P.L.1949, c. 184 (C. 55:16-1 et seq.). d. "Nonresidential structure" means any building designed and built for use as a factory or warehouse, or for retail or wholesale merchandising, office, workshop, school, hospital, hotel, or any other commercial, industrial or institutional purpose; or which, having been designed and built for residential use, has been altered, converted or reconstructed for nonresidential use. e. "Persons and families of low and moderate income" means persons and families whose income is insufficient, in relation to the current cost and condition of housing facilities available in the normal private-enterprise housing market, to secure safe, sanitary and decent housing adequate for the size of the family. f. "Residential structure" means any building constructed or reconstructed, rehabilitated, converted or altered for the purpose of providing dwelling units for the accommodation of nontransient tenants. A structure containing nonresidential space and facilities not exceeding 25% of its total rental value shall be "residential" within this definition. L.1983, c. 335, s. 1, eff. Sept. 2, 1983.

N.J. Stat. § 55:18-2 Title in municipality to realty with residential or nonresidential structure; determinations of feasibility of conversion or rehabilitation; authorization to lease and subordinate interest to mortgage

When a municipality holds title to any lot, parcel, or tract of real property that includes a residential or nonresidential structure, if the municipal governing body determines that: a. The structure if nonresidential cannot in the foreseeable future be put to economically feasible use in its intended purpose; or if residential, requires rehabilitation to provide safe, sanitary and decent housing accommodations; and b. The property is not needed for public use by the municipality; and c. Conversion of the nonresidential structure to a residential structure, or rehabilitation of the residential structure, would be practicable and would help to meet a need within the municipality for housing for persons of low to moderate income; then the municipal governing body may (1) lease the property and structure to a housing corporation or resident first-time homebuyer under terms requiring the lessee to undertake such rehabilitation or conversion and to maintain and operate the converted property for residential purposes in accordance with the provisions of this act and of the lease made under authority of this act and (2) subordinate the municipal interest in the property and structure to any mortgage provided pursuant to financing the rehabilitation or conversion of the structure. L.1983, c. 335, s. 2, eff. Sept. 2, 1983.

N.J. Stat. § 55:18-3 Qualifications of prospective lessee

Before any lease is entered into under authority of this act the prospective lessee shall demonstrate to the satisfaction of the municipal governing body: (1) Its financial capacity to undertake the proposed conversion, maintenance and operation, including reliable commitments for any financing reasonably required to meet its obligations under, and resulting from, the terms of the lease; and (2) Its possession of adequate experience in, and qualification for, the management of projects of comparable type and magnitude, or firm agreements to acquire the same through contractual arrangements conditioned upon execution of the lease. L.1983, c. 335, s. 3, eff. Sept. 2, 1983.

N.J. Stat. § 55:18-4 Terms of lease

A lease entered into under authority of this act shall specify: a. The term of the lease and the conditions, if any, under which the lessee may be entitled to renewal thereof or to the exercise of an option to purchase the leased property upon expiration, or during the term, of the lease. Such option to purchase shall be nontransferable. b. The annual rental to be paid to the municipality, and the manner of payment. c. The date, or a series of dates, running from the date of execution of the lease, upon which the rehabilitation or conversion, or specified stages thereof, shall be completed. d. The number and type of dwelling units to be provided in the rehabilitated or converted structure or structures, including the respective numbers of units to be provided for single occupancy and for families of varying sizes, together with the facilities to be provided in each unit, or in varying types and sizes of units, and in common areas or for common use of all tenants. e. The schedule of rents to be charged for units of varying type, size and location, which schedule shall be subject to the provisions of section 6 of this act. f. The interest on the fair market value of the property and structure, as determined at the time of execution of the lease to which interest the municipality shall be entitled upon purchase by the lessee pursuant to options, or on any terms provided for in the lease or by the terms of this act. g. Any other terms and conditions not inconsistent with the provisions of this act, or of any other law, to which the lessor municipality and lessee may agree. L.1983, c. 335, s. 4, eff. Sept. 2, 1983.

N.J. Stat. § 55:18-5 Conformance to codes

Every structure rehabilitated or converted by a lessee under authority of this act, and every dwelling unit in such structure, shall conform to all applicable codes relating to healthfulness, safety and structural soundness of comparable new construction in the municipality; except as the governing body may by ordinance grant modification of or exemption from applicable municipal codes or ordinances on reasonable grounds and without hazard to the health and safety of residents of the rehabilitated or converted structure. L.1983, c. 335, s. 5, eff. Sept. 2, 1983.

N.J. Stat. § 55:18-6 Schedule of rents

a. A schedule of rents under subsection e. of section 4 of this act shall provide for total revenue sufficient to meet the necessary operating costs, debt service and other necessary commitments of the lessee over the entire term of the lease, including surcharges permitted under section 7 of this act; but shall not exceed amounts feasible for the accommodation of tenants of low and moderate income. b. The schedule of rents may provide for adjustment of rents in accordance with income levels, family size, or extraordinary financial hardships of particular tenants, in order to assure adequate accommodation of the housing needs of persons of low and moderate income. c. The schedule of rents shall not be altered during the term of the lease without consent of the lessor municipality, except as the lease may provide for automatic adjustments based on established operating costs; and the lease shall specify the manner in which such alterations may be from time to time proposed, negotiated, and allowed or disallowed. L.1983, c. 335, s. 6, eff. Sept. 2, 1983.

N.J. Stat. § 55:18-7 Surcharge on rents for lessee with option to purchase; deposit; disposition

a. If at the time of execution of the lease the municipality offers the lessee an option to purchase the property during, or at the expiration of, the lease, and if the lessee records in the lease its intention to exercise the option, then in establishing a schedule of rents the lessee shall be entitled to include charges designed to accumulate over the period of the lease a fund which, including accrued interest during that period, is agreed upon by the municipality and the lessee to be probably sufficient to meet the lessee's cash requirements in connection with the purchase; provided, however, that the surcharge shall not increase rents to a level inconsistent with subsection a. of section 6 of this act. b. Charges added to rents for this purpose shall be deposited in a financial institution qualified to exercise appropriate fiduciary powers under the laws of this State and shall not be withdrawn or used for any purpose during the term of the lease, or for any purpose thereafter, except to make payments in connection with the financing of the purchase of the property pursuant to exercise of the option, or as provided in subsection c. of this section. c. Upon expiration of the lease without exercise of an option to purchase for which a fund has been accumulated pursuant to this section, the fund so accumulated shall: (1) If the lessee declines renewal or in renewing declines to continue an option for purchase, be used for a reduction of tenant's rental charges according to a formula determined by the municipality, except as otherwise provided pursuant to subsection c. of section 8 of this act; (2) If the lessee accepts renewal with a continued option to purchase at the end of the extended term, but declines to continue accumulation of the fund, remain on deposit through the extended term subject to the restrictions of subsection b. of this section; (3) If the lessee accepts renewal, with a continued option to purchase at the end of the extended term, remain on deposit and be added to in accordance with continuing charges for the purpose; but such charges shall be adjusted to take into account the longer term for accumulation, the new option price, if set under the terms of renewal, and any change in the fund's expected rate of earnings over the extended period. L.1983, c. 335, s. 7, eff. Sept. 2, 1983.

N.J. Stat. § 55:18-8 Expiration of lease; disposition of property

Upon expiration of a lease entered into under authority of this act: a. If the lessee exercises an option to purchase, the municipality shall be entitled to the fair market value of the property and structure, as determined at the time of execution of the lease, plus interest on such value. b. If the lessee declines to exercise such option, or to request or accept renewal of the lease on mutually agreeable terms, the property shall revert to the possession of the municipality, which may thereupon negotiate a lease or purchase with another housing corporation or resident first-time homebuyer under applicable terms and conditions authorized by this act. c. (1) Upon sale of a property by the municipality under subsection b. of this section, any fund accumulated pursuant to section 8 of this act may be applied by the purchaser against the purchase price. (2) Upon lease of a property by the municipality under subsection b. of this section, any fund accumulated pursuant to section 8 of this act shall be treated as in a renewal of lease by the original lessee, and the new lessee shall succeed to all the rights therein of the original lessee. L.1983, c. 335, s. 8, eff. Sept. 2, 1983.

N.J. Stat. § 55:18-9 Waiver of requirements by municipality; conditions

In order to avoid redundant or conflicting regulation, the municipal governing body may waive any requirement pursuant to the provisions of this act upon finding that the requirements for a federal or State program for provision of low- and moderate-income housing in which the resident first-time homebuyer or housing corporation is to participate and to which the property in question is to be subject fulfills the general purpose of the requirement waived or that the requirement if not waived would prevent or impede participation in the federal or State program. L.1983, c. 335, s. 9, eff. Sept. 2, 1983.

N.J. Stat. § 55:18-10 Rules and regulations

The Commissioner of the Department of Community Affairs shall have the power to adopt, amend, revise and repeal rules and regulations to promote implementation of the provisions of this act. L.1983, c. 335, s. 10, eff. Sept. 2, 1983.

Source: Open US Law by Vaquill AI (CC BY 4.0)URL: https://www.njleg.state.nj.us/legislative-activity/statutesFetched: 10/17/2026