N.J. Stat. Ann. § 2A:18-51 et seq. § 2A:18-61.52
Costs of conversion no basis for rent increases
Operative Text
13. a. In the case of a municipality subject to the provisions of this act that does not have a rent control ordinance in effect, no evidence of increased costs that are solely the result of the conversion, including but not limited to any increase in financing or carrying costs, and do not add services or amenities not previously provided shall be used as a basis to establish the reasonableness of a rent increase under subsection f. of section 2 of P.L.1974, c.49 (C.2A:18-61.1). b. In the case of a municipality subject to the provisions of this act that has a rent control ordinance in effect, a rent increase for a qualified tenant with a protected tenancy status, or for any tenant to whom notice of termination pursuant to subsection g. of section 3 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 that are solely the result of a conversion, including but not limited to any increase in financing or carrying costs, and do not add services or amenities not previously provided 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.1991,c.509,s.13.
Under N.J.S.A. 2A:18-51 et seq. § 2A:18-61.52, costs that arise solely from converting a rental property to another form of ownership — such as increased financing or carrying costs — cannot be used to justify a rent increase, as long as those costs do not add new services or amenities. In municipalities without rent control, such conversion costs are barred from establishing the reasonableness of any rent increase. In municipalities with rent control, protected tenants and those who have received termination notices are further shielded, with any rent increase capped at what the local ordinance allows for rent-controlled units.
Plain English — not legal advice.
Property owners and managers operating in New Jersey should be aware that N.J.S.A. 2A:18-51 et seq. § 2A:18-61.52 draws a clear line between conversion-related cost increases and legitimate grounds for raising rents. Compliant operators generally document that any proposed rent increase is tied to new services or amenities actually provided to tenants, rather than to financing or carrying costs that arose from the conversion itself. In municipalities with rent control, operators typically ensure that rent increases for protected tenants or those under termination notice do not exceed the locally authorized cap, and they avoid presenting conversion costs at fair-return or hardship hearings before the municipal rent board.
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:18-51 et seq. § 2A:18-61.52 provides tenants with meaningful protections against rent increases driven purely by a landlord's conversion costs. Tenants with protected tenancy status, or those who have received a notice of termination in a rent-controlled municipality, have the right to have any increase limited to what the local rent control ordinance permits. Tenants who believe a proposed increase improperly relies on conversion-related costs may consider raising this provision as a defense in any relevant proceeding, contacting their municipal rent board if one exists, or reaching out to a local tenant-rights organization for general information about available options.
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 6, 2026 — auto-generated, not yet human-reviewed. See /transparency for methodology.
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