Montclair, NJ — landlord and rental rules

Montclair caps an annual increase at 4.00% of the base rent, at 2.5% where at least one tenant is 65 or over, and allows a one-time 6% where the landlord has collected no increase on an existing tenant since 1 May 2020. Chapter 257's exemption is owner-occupancy, not size: a building of three or fewer units the owner lives in.

The widely reported "fewer than four units" threshold is not what the chapter says: §257-2B(1) exempts units in buildings the owner resides in that contain three or fewer residential units, and §257-2B(7) exempts single-family homes and single condominium and co-operative units. A non-owner-occupied two- or three-family is covered.

The figure circulating in press accounts is 4.25%; the codified cap is 4.00%. The chapter in force was adopted on 19 April 2022 and repealed the litigated 2020 ordinance outright, and it was amended again on 23 May 2024 — an amendment two years on is good evidence that it is operative. No substantial-rehabilitation exemption appears in §257-2B.

Annual cap

4%

Vacancy decontrol

Yes — rent resets on vacancy

Unit counts

2+ units

Owner-occupied exemption

Yes

New Jersey has no statewide rent control. The Department of Community Affairs' 2026 survey of all 564 municipalities found 120 with an ordinance and 444 without, and their caps, unit thresholds, exemptions and vacancy rules differ town by town.

This municipality's ordinance has not been read into this knowledge base. Check the DCA's survey — it names every municipality and gives the unit threshold and the increase limit for each — and then read the ordinance itself or call the rent board, before assuming rents can be reset on purchase or turnover. One statewide limit does apply everywhere: N.J.S.A. 2A:42-84.5 keeps municipal rent control off housing completed after 25 June 1987 for 30 years from completion.

On the voluntary uncoerced vacation of an apartment the landlord may fix the rent at whatever amount is deemed appropriate — but no more than once in every five-year period for that unit.

The reset is real and the frequency is the constraint: a plan that marks several units to market across a short hold is modelling something the chapter forbids. It requires a certification of registration compliance, substantial code compliance, no harassment, a voluntary vacancy and that no allowance was taken in the prior five years, with the occupying tenants, lease periods and rents documented. A materially false certification forfeits the allowance for that unit for five years and rolls the rent back. The application costs $250 a unit.

Vacancy decontrol

Yes — rent resets on vacancy

The New Jersey Anti-Eviction Act requires good cause for every residential eviction statewide, with no small-landlord exemption. A month-to-month tenant cannot be removed simply by ending the term.

Practical effect for a buyer: an occupied unit conveys with its tenant, and a business plan that depends on delivering the building vacant needs a lawful cause for each unit before it is a plan.

Every covered dwelling registers its base rent annually on 1 April, at $10 per dwelling unit. A late notice costs $20 a unit, and failing to file within 45 days of the Rent Control Officer's notice prohibits any rent increase until it is filed.

In addition to the statewide registration under N.J.S.A. 46:8-27, not instead of it. The other fees are worth knowing because they price the routes out of the 4%: a legal rent determination is $25 a unit, an appeal of the Rent Control Officer $100, a capital-improvement or service increase $250 a unit and a hardship application $300 a unit. A substantial-compliance certification from the township must accompany the annual increase notice itself, and a tenant who successfully contests that certification voids the increase.

Fee per unit

$10

The Landlord Identity Law requires a certificate of registration for every residential rental — filed with the municipal clerk for a one-unit rental or a non-owner-occupied two-unit premises, and with the DCA's Bureau of Housing Inspection for a multiple dwelling of three or more units. Until it is filed no judgment for possession may be entered: the court continues the case for up to 90 days and then dismisses it.

Registration reaches a one-unit rental and a two-family alike, and the exemption is narrower than it looks. N.J.S.A. 46:8-27 excludes owner-occupied two-unit premises from the definition of "landlord" — but N.J.S.A. 46:8-28.5 separately requires every owner of a tenant-occupied one- or two-family property, expressly including a two-family with one owner-occupied unit, to register with the Bureau of Housing Inspection, unless the property is certified free of lead-based paint, was constructed in or after 1978, or is a seasonal rental let for under six months a year.

The registration is filed within 30 days, or at the creation of the first tenancy in a newly built or reconstructed building, and a copy of the certificate goes to every tenant — again at the creation of each new tenancy, and within seven days of any amendment. An amended certificate is due within 20 days of a change, which for a buyer means the closing itself: a new owner is a change. No tenant can waive any of this. Treat it as a closing task rather than a filing to catch up on later, because the sanction is not the fee — it is that an eviction cannot be completed until the record is right, and the court's 90-day continuance is the whole of the remedy.

Unit counts

1+ units

Owner-occupied exemption

No

A building in which three or more units of dwelling space are occupied by people living independently of each other is a multiple dwelling under the Hotel and Multiple Dwelling Law. It must be registered with the DCA's Bureau of Housing Inspection, recertified annually by 1 July, and inspected on a cycle set by its own record: seven years where no violation is found or all are abated at the first reinspection, five where they are abated by the second or third, and two where they are not.

Three or more units of dwelling space — so the two-family a small investor starts with is outside this regime and the three-family is inside it, which is the single largest step change in operating obligations in the New Jersey small-multifamily market. A group of ten or more two-unit buildings on one parcel or on contiguous parcels in common ownership also counts. Registered hotels, certain condominium and co-operative sections of not more than four units meeting fire-separation criteria, and certain non-profit retirement-community buildings of three storeys or fewer are excluded.

The tier is the fact worth underwriting: a building bought with an open violation history is on a two-year cycle rather than a seven-year one, and that is an inherited operating cost the rent roll does not show. Note that the DCA's own web pages and guidance still describe a flat five-year cycle — the statute has been tiered since 2019, and the commissioner retains power to revert multiple dwellings to five years by regulation, so confirm the cycle for a specific building with the Bureau rather than reading it off either sentence. The statutory inspection fee is $33 a unit for the first seven units, $21 for units 8 to 24, $18 for 25 to 48 and $12 above that, capped at $65 for an owner-occupied three-unit and $80 for an owner-occupied four-unit where the owner's household income is under 80% of the county median, with a $40 per-unit reinspection fee after the first reinspection; the commissioner may reset all of them by rule, and the registration fee has no statutory amount at all. A new owner must register within 20 days of the transfer.

Fee per unit

$33

Unit counts

3+ units

Highest tier

7 years — no violations, or all abated at the first reinspection

Middle tier

5 years — abated by the second or third reinspection

Lowest tier

2 years — not abated by the third reinspection

Annual certification

1 July

Pre-1978 one- and two-family rentals must be inspected for lead-based paint hazards at tenant turnover or every three years, whichever comes first. The certificate is valid for two years.

Budget the inspection and any remediation into the turnover cost of every pre-1978 unit, not into a one-off line at closing.

Construction

Built before 1978

In effect since 2022-07-22.

The Rent Security Deposit Act caps a deposit at one and a half months' rent, requires it to be held in an insured interest-bearing account, requires written notice to the tenant within 30 days naming the institution, the account, the rate and the amount, and requires the deposit plus the tenant's interest to be returned with an itemisation within 30 days of the tenancy ending. Wrongful failure to return it is double damages, costs and, at the court's discretion, the tenant's legal fees.

The Act applies to every rental dwelling except owner-occupied premises with not more than two rental units where the tenant has not given the landlord 30 days' written notice invoking it — so an owner-occupied two-family is exempt only until a tenant asks for the protection, and then it is not.

The half of this that catches buyers is the transfer. On a conveyance the seller must hand the deposits plus accumulated interest to the purchaser at delivery of the deed or within five days and notify each tenant by registered or certified mail — and the purchaser has an affirmative duty to obtain them. Liability follows the building whether or not the money actually moved, so a deposit the seller kept is a deposit the buyer owes, at double damages. Get the deposit schedule and the interest history in diligence and take the cash at closing. An additional annual security may not exceed 10% of the current deposit; a landlord holding money for ten or more units has the tighter investment rules; a seasonal rental of 125 days or fewer is exempt from the interest-bearing requirement, on the landlord's proof.

Unit counts

1+ units

Owner-occupied exemption

Yes

Damages

2× the deposit, plus fees

Cap

1.5 months' rent

Additional annual security

10% of the current deposit

Notice deadline

30 days from receipt, and again within 30 days of a transfer of ownership

Return deadline

30 days from the end of the tenancy

Since 20 March 2024 a landlord must tell each tenant, before the lease is signed or renewed, whether the property lies in FEMA's Special Flood Hazard Area or its Moderate Risk Flood Hazard Area, and must disclose actual knowledge of prior flooding — on the notice form the Department of Community Affairs publishes. A tenant who later discovers the property is in either area may terminate the lease by written notice.

The same shape as Truth-in-Renting and just as easy to get wrong: premises containing not more than two dwelling units are outside the landlord notice whoever lives there, owner-occupied premises of not more than three dwelling units are outside it too, and so are hotels, motels and guest houses let for under 120 days. So most two-family purchases carry no landlord flood-notice duty at all — which is a reason to read the flood maps, not a reason not to.

Three questions on the rental form: whether the property is wholly or partly in the 100-year Special Flood Hazard Area on FEMA's current maps, whether it is in the 500-year Moderate Risk area, and whether the rental premises or the parking areas have ever taken flood damage, water seepage or pooled water from a natural flood event — with the count, the dates and a description of each. Both landlord and tenant sign it. Do not confuse this with the seller's obligation under the same act: the Property Condition Disclosure Statement asks the seller about flood insurance and prior federal disaster assistance, and the rental notice asks neither. The remedy is what makes this an underwriting fact rather than a paperwork one — a missed disclosure lets the tenant end the lease on written notice, effective when they hand back possession.

Unit counts

3+ units

Owner-occupied exemption

Yes

In effect since 2024-03-20.

The Truth-in-Renting Act requires a landlord to give every tenant a copy of the Department of Community Affairs' Truth in Renting statement within 30 days of the department making it available, to give the current statement to each new tenant at or before the time they take occupancy, and to keep a copy posted where tenants can see it.

Two separate carve-outs, and the second is the one people get wrong: premises containing not more than two dwelling units are exempt whoever lives there, and owner-occupied premises of not more than three dwelling units are exempt as well. So a three-family is covered if the owner lives elsewhere and exempt if they live in it. Hotels, motels and guest houses serving transient or seasonal guests are outside the Act entirely.

Small money, and worth doing anyway for what rides alongside it: the same Act voids a lease provision that violates clearly established tenant rights and lets a tenant petition to terminate a lease containing one, and a tenant cannot waive receipt of the statement. Inheriting a seller's lease form is inheriting whatever is in it.

Unit counts

3+ units

Owner-occupied exemption

Yes