The 2006 Carlyle Towers ruling
Carlyle Towers
is a building of 106 apartments
in the borough of Caldwell
owned and operated by Legow Management Company.
Legow applied to the rent control board for a rent increase as "capital improvements".
The tenants won, with the board rejecting the application.
Caldwell Rent Review Board denies surcharge application
Posted: Thursday, June 5, 2003
CALDWELL - Tenants of Carlyle Towers at 512 Bloomfield Ave. won their argument before the Rent Board
The landlord appealed and lost again!
This ruling sets an important precedence:
finance charge is not allowed for self-financed projects.
Carlyle Towers v. Rent Review Board of the Borough of Caldwell
Superior Court of New Jersey Appellate Division 2006
Docket No. A-6381-04T3
The Appellate Division found that if an item is a replacement,
had been previously provided, or was required to be provided by law or by the lease,
then it did not fall under the municipality's definition of a major capital improvement.
In this case, the windows and air conditioning were required by law and by the lease.
Since the two items were previously provided in the building,
these two improvements constituted replacements.
The Court noted that although the board's definition of a major capital improvement
was narrower than other municipalities, it would give the board deference
provided that its interpretation was reasonable.
Further, the Court rejected the landlord's cross-appeal
challenging the lower court's determination that the waterproofing did not constitute a major capital expense,
agreeing with the board's finding that waterproofing constituted upkeep, maintenance, and repair.