Last week, in Cona v. Twp. of Washington, et al., the Appellate Division, in a published decision, rejected challenges to municipal ordinances that require landlords to pay a fee to offset the costs of annual inspections and registration of rental units.    The Cona decision examined the Appellate Divisions’ 2015 ruling in Timber Glen, which found that municipalities are not authorized under state law to license landlords and charge an annual fee for the license.

The Cona court rejected assertions from the challengers that the fee charged for rental unit inspections was a de facto licensing fee, noting that licensing and inspections were distinct from one another and that the fees charged for inspections and registrations were reasonably related to the municipalities’ exercise of their obligation to promote the safety and welfare of their residents.  Although the court did have concerns with continued use of the term “license fee” in some municipalities’ ordinances, as it may lead to confusion, it nevertheless saw through the name and properly determined that the additional fee was charged to offset the costs of inspections and permissible under law.

You should review this decision with your municipal attorney and construction code official for more information on how the ruling will impact your municipality.

Contact: Frank Marshall, Esq., League Staff Attorney, FMarshall@njslom.org or 609-695-3481 x137.