Timber Glen Phase III, LLC and Jsm at Timber Glen, LLC Vs.

NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-1775-13T1

TIMBER GLEN PHASE III, LLC,
a New Jersey Limited Liability
Company, and JSM AT TIMBER GLEN,
LLC, a New Jersey Limited Liability
Company, APPROVED FOR PUBLICATION

Plaintiffs-Appellants, August 6, 2015

APPELLATE DIVISION
v.

TOWNSHIP OF HAMILTON, a Municipal
Corporation of the State of New
Jersey,

Defendant-Respondent.
_______________________________

Argued April 20, 2015 - Decided August 6, 2015

Before Judges Lihotz, St. John and
Rothstadt.

On appeal from the Superior Court of New
Jersey, Law Division, Atlantic County,
Docket No. L-0988-12.

Ronald L. Shimanowitz argued the cause for
appellants (Hutt & Shimanowitz, P.C.,
attorneys; Mr. Shimanowitz and Bryan D.
Plocker, on the briefs).

Robert S. Sandman argued the cause for
respondent (Hankin Sandman Palladino &
Weintrob, attorneys; Raymond J. Went, Jr.,
on the brief).

Edward Purcell, Associate Counsel, argued
the cause for amicus curiae New Jersey State
League of Municipalities (Mr. Purcell,
 attorney; William J. Kearns, Jr., of
counsel; Mr. Purcell, on the brief).

Sean A. Smith argued the cause for amicus
curiae New Jersey Apartment Association
(Brach Eichler, LLC, attorneys; Charles X.
Gormally, of counsel and on the brief; Mr.
Smith, on the brief).

Robert M. Washburn argued the cause for
amicus curiae New Jersey Builders
Association (Flaster Greenberg, P.C.,
attorneys; Mr. Washburn, of counsel; Emily
Breslin Markos, on the brief).

Barry S. Goodman argued the cause for amicus
curiae New Jersey Realtors (Greenbaum, Rowe,
Smith & Davis, LLP, attorneys; Mr. Goodman,
of counsel and on the brief; Steven B.
Gladis, on the brief).

The opinion of the court was delivered by

LIHOTZ, P.J.A.D.

In this appeal, the parties disagree on the scope of

municipal authority granted by N.J.S.A. 40:52-1 (the Licensing

Act), which empowers municipalities to adopt licensing

ordinances under specific circumstances. Plaintiffs Timber Glen

Phase III, LLC and JSM at Timber Glen, LLC appeal from the

summary judgment dismissal of their complaint in lieu of

prerogative writs that challenged an ordinance adopted by

defendant Township of Hamilton, assessing an annual licensing

fee on residential apartment units.

On appeal, plaintiffs attack the trial judge's legal

interpretation of the Licensing Act as enabling defendant's

2 A-1775-13T1
action and, alternatively, argue the amount of the licensing fee

imposed by defendant's ordinance was arbitrary, capricious and

unreasonable. Several amici appeared and presented arguments

favoring or opposing the authorization to exercise municipal

authority.

Following our consideration of the arguments presented,

viewing the evidential materials in the light most favorable to

plaintiffs, Davis v. Brickman Landscaping, Ltd., 219 N.J. 395,

406 (2014), we conclude the ordinance falls outside the

authority granted to municipal governments under the Licensing

Act. We reverse the grant of summary judgment to defendant as

the licensing ordinance is ultra vires and unenforceable.

The facts are not disputed. Plaintiffs are incorporated in

New Jersey and own apartment buildings in Mays Landing. In

total, the buildings contain 498 units, leased for residential

purposes.

Defendant adopted Ordinance No. 1708-2011 in response to

the findings of its Strategic Planning Smart Growth Committee

(SMART), whose task included issuing recommendations to improve

the quality of life and address safety issues in the township's

residential properties. SMART proposed defendant adopt an

ordinance requiring annual licensing for all residential

properties, specifically designed to "protect . . . tenants

3 A-1775-13T1
[and] . . . landlords who may not have been aware of some of the

activities taking place at the[ir] rental properties." SMART

expressed a goal to place landlords on notice of safety and

habitability issues requiring attention.

The ordinance, entitled "AN ORDINANCE OF THE TOWNSHIP OF

HAMILTON, COUNTY OF ATLANTIC, REQUIRING RESIDENTIAL RENTAL UNIT

LICENSES, TENANT OCCUPANCY PERMITS AND PERIODIC HABITABILITY

INSPECTIONS AND RE-INSPECTIONS," mandated, among other things,

the registration and licensing of apartment units starting

January 1, 2012. The ordinance provided in pertinent part:

222-3. Residential Rental Unit License
Required.

Effective upon adoption of this Ordinance no
person shall occupy any Residential Rental
Unit nor shall the owner permit the
occupancy of any[] residential rental unit
within the Township of Hamilton if said unit
has not been Licensed by the Bureau of Fire
Prevention on forms which shall be provided
for that purpose. Any owner permitting the
occupancy of a Residential Rental Unit
without said License 90 days after the
Adoption of this ordinance shall be in
violation of this ordinance, and each and
every day thereafter shall be deem[ed] a
separate offense.

A "Residential Rental Unit" was defined in 222-1 as:

Any dwelling . . . which the owner rents or
leases to any third party for the purposes
of that third party or parties to reside in
the premises for a period in excess of
thirty days regardless of the term of any
written or verbal lease. . . . Any room or

4 A-1775-13T1
 rooms, suite or a part thereof, whether
furnished or unfurnished, which is occupied
or intended, arranged or designed to be
occupied for sleeping or dwelling purposes
. . . .

Other provisions set forth in the ordinance required

disclosure of names, addresses and phone numbers of all owners

and mortgagees, designation of an Atlantic County agent for

owners not located in the county and other unit-specific

information. The license was to be renewed and the $100 per

unit fee paid annually. Failure to obtain or renew the license

prohibited the owner from renting the unit.

Other sections of the ordinance addressed a tenant

occupancy permit, which owners were required to obtain annually

for a $25 fee per unit. Finally, provisions for annual

habitability inspections, which included a fire inspection, were

included with a separate fee of $125.

Plaintiffs filed a complaint in lieu of prerogative writs

seeking a declaratory judgment invalidating the ordinance as

unconstitutional, ordering repayment of all fees collected to

date, awarding attorney's fees and costs of suit and granting

other relief not relevant to this appeal.

Prior to filing its answer, defendant met with plaintiffs

and others affected by the ordinance. Based upon concerns

raised, defendant adopted an amendment under Ordinance No. 1727-

5 A-1775-13T1
2012, eliminating several original provisions, such as the

tenant occupancy permit fee and some tenant registration

requirements. A slightly reduced annual licensing fee was

adopted1 and the habitability inspection requirements were

retained. The modifying ordinance also added a clause stating

licensing fees were not intended as a source of municipal

revenue, but rather all fees generated were designated for

enforcement purposes. Defendant later adopted Ordinance No.

1752-2013, also amending the original ordinance by repealing the

annual habitability inspection provisions.

The Law Division reviewed the matter on the parties' cross-

motions for summary judgment. Plaintiffs argued the ordinance

did not recite the enabling legislation granting defendant

authority to license residential rentals, and argued it did not

fall within a municipality's general police power. Further,

plaintiffs asserted the Licensing Act did not allow defendant to

license and regulate residential apartment buildings with leases

of 175 days or more, as the clear intent of the statute was

directed toward temporary or transient housing and short-term

1
The $100 fee was reduced to $85. In a subsequent
ordinance, the fee was altered to "an amount established by the
Township Committee through [r]esolution annually as to the cost
of licenses during that calendar year." At the time the matter
was heard, the fee was $65 per unit per year, which would be an
annual expense to plaintiffs of $32,370.

6 A-1775-13T1
vacation rentals. Moreover, plaintiffs pointed out the

regulatory ordinance did nothing more than impose another fee on

apartment units, which were already regulated by the Hotel and

Multiple Dwelling Act (HMDA), N.J.S.A. 55:13A-1 to -28, and

local property maintenance and fire ordinances. Finally,

plaintiffs asserted the ordinance burdened tenants by

arbitrarily imposing the constantly changing annual fee,

designed to shift municipal burdens onto landlords and tenants.2

Defendant challenged plaintiffs' contentions, stating the

licensing ordinance was validly enacted under the regulatory

legislative functions of the township and was implemented for a

public purpose, that is, to aid tenants experiencing

inappropriate housing conditions unabated by landlords.

Defendant also cited the HMDA, which provides authority to

license and inspect when a new tenancy commences. Defendant

suggests the HMDA did not prohibit adoption of an ordinance for

more frequent licensing, and as remedial legislation, it must be

liberally construed to permit such ordinances.

The judge, in a memorandum decision accompanying the

November 6, 2013 order, interpreted N.J.S.A. 40:52-1(d) and

2
Plaintiffs raised additional issues before the Law
Division, including constitutional challenges and a demand for
attorney's fees under 42 U.S.C.A. § 1983; however, they chose
not to pursue these issues on appeal.

7 A-1775-13T1
N.J.S.A. 40:48-2.12a as authorizing defendant to license rental

properties. Accordingly, he granted summary judgment to

defendant and dismissed plaintiffs' complaint. This appeal

followed.

Our examination of this statutory interpretation challenge

presents legal questions, warranting de novo review. See Redd

v. Bowman, 433 N.J. Super. 178, 187 (App. Div. 2013), certif.

granted, 217 N.J. 293 (2014). We "owe no deference to the trial

court . . . if [we conclude it has] wrongly interpreted a

statute." Zabilowicz v. Kelsey, 200 N.J. 507, 512 (2009).

In construing the meaning of a statute, our task is well-

defined: we must "determine and effectuate the Legislature's

intent," examining the language used and statutory objectives to

be achieved. Redd, supra, 433 N.J. Super. at 187 (citation and

internal quotation marks omitted). See also N.J.S.A. 1:1-1 ("In

the construction of . . . statutes[,] . . . words and phrases

shall be read and construed with their context, and shall,

unless inconsistent with the manifest intent of the

legislature[,] . . . be given their generally accepted meaning,

according to the approved usage of the language.").

"'Construction of any statute necessarily begins with

consideration of its plain language.'" Mun. Council v. James,

183 N.J. 361, 370 (2005) (quoting Merin v. Maglaki, 126 N.J.

8 A-1775-13T1
430, 434 (1992)). We give plainly written statutes their

"ordinary meaning, absent a legislative intent to the contrary,"

with the understanding the language must be construed "in a

fashion consistent with the statutory context in which it

appears." Ibid. (citations and internal quotation marks

omitted). See also Shelton v. Restaurant.com, Inc., 214 N.J.

419, 428-29 (2013).

If our review finds the statutory provisions are ambiguous,

we are free to examine extrinsic aids, such as legislative

history, to ascertain the Legislature's intended meaning.

Shelton, supra, 214 N.J. 429. In interpreting two seemingly

conflicting sections of the same statute, we must read the

provisions in pari materia, construing them "together as a

unitary and harmonious whole." Am. Fire & Cas. Co. v. N.J. Div.

of Taxation, 189 N.J. 65, 80 (2006) (citations and internal

quotation marks omitted). "Every reasonable construction should

be applied" to assure each section is meaningful. Twp. of

Mahwah v. Bergen Cnty. Bd. of Taxation, 98 N.J. 268, 281, cert.

denied, 471 U.S. 1136, 105 S. Ct. 2677, 86 L. Ed. 2d 696 (1985).

Finally, we keep in mind "every word in a statute has meaning

and is not mere surplusage." Jersey Cent. Power & Light Co. v.

Melcar Util. Co., 212 N.J. 576, 587 (2013) (citations and

internal quotation marks omitted).

9 A-1775-13T1
 Guided by these rules, we examine defendant's position

arguing the ordinance followed supportive enabling legislation,

which authorized its imposition of licensing requirements for

rental residential real estate, as well as plaintiffs'

challenges to that asserted authority.

Defendant contends its licensing authority is grounded

generally in a municipality's police power, and, more

specifically, in subsection (d) of the Licensing Act.

Defendant's view is supported by amicus New Jersey State League

of Municipalities (League of Municipalities), which additionally

cites the enforcement provision of the HMDA, N.J.S.A. 55:13A-21,

suggesting licensure is compatible with the regulatory power

over dwelling space upon termination of occupancy found in

N.J.S.A. 40:48-2.12m.

Plaintiffs disagree. Their primary challenge argues

defendant may only regulate apartment rentals for terms less

than 175 consecutive days, as allowed by subsection (n) of the

Licensing Act, because regulation of residential rentals

generally rests with the State under the HMDA, unless otherwise

authorized. Amici New Jersey Builders Association, New Jersey

Realtors, and New Jersey Apartment Association support

plaintiffs' positions.

10 A-1775-13T1
 Initially, when reviewing a municipal action, we apply a

presumption of validity and reasonableness to adopted

ordinances. Lake Valley Assocs., LLC v. Twp. of Pemberton, 411

N.J. Super. 501, 505 (App. Div.), certif. denied, 202 N.J. 43

(2010); see also First Peoples Bank v. Twp. of Medford, 126 N.J.

413, 418 (1991) ("[A] reviewing court should presume the

validity and reasonableness of a municipal ordinance."). We do

not "pass on the wisdom of the ordinance; that is exclusively a

legislative function." Pheasant Bridge Corp. v. Twp. of Warren,

169 N.J. 282, 290 (2001), cert. denied, 535 U.S. 1077, 122 S.

Ct. 1959, 152 L. Ed. 2d 1020 (2002). A party challenging an

ordinance must demonstrate the ordinance, "in whole or in

application to any particular property," is arbitrary,

capricious or unreasonable. Id. at 289-90 (citation and

internal quotation marks omitted). Therefore, the "presumption

of validity [cannot] be overcome unless the evidence clearly

establishes its unreasonableness." Twp. of Livingston v.

Marchev, 85 N.J. Super. 428, 432 (App. Div. 1964) (citing

Vickers v. Twp. Comm. of Gloucester Twp., 37 N.J. 232, 242

(1962)), certif. denied, 44 N.J. 412, appeal dismissed, 382 U.S.

201, 86 S. Ct. 393, 15 L. Ed. 2d 269 (1965).

11 A-1775-13T1
 The validity of local legislative action is based on the

New Jersey State Constitution Article IV, section VII, paragraph

11, which states:

The provisions of this Constitution and of
any law concerning municipal corporations
formed for local government, or concerning
counties, shall be liberally construed in
their favor. The powers of counties and
such municipal corporations shall include
not only those granted in express terms but
also those of necessary or fair implication,
or incident to the powers expressly
conferred, or essential thereto, and not
inconsistent with or prohibited by this
Constitution or by law.

See also Moyant v. Paramus, 30 N.J. 528, 534 (1959) (discussing

presumptive validity of municipal ordinances). This "[h]ome

rule is basic in our government" and "embodies the principle

that the police power of the State may be invested in local

government to enable local government to discharge its role as

an arm or agency of the State and to meet other needs of the

community." Inganamort v. Ft. Lee, 62 N.J. 521, 528 (1973).

"Express powers as well as those that arise by fair implication

are given broad latitude, so long as they are not wielded in

contravention of the overarching statutory grant of authority or

conflict otherwise with an express statutory limitation or

prohibition." Varsolona v. Breen Capital Servs. Corp., 180 N.J.

605, 625 (2004).

12 A-1775-13T1
 The presumption of the validity of local legislative

action, however, is constrained by the obvious understanding

that "[a] statute has supremacy over an ordinance," In re

Ordinance 04-75, 192 N.J. 446, 469 (2007), and "a local

municipality is but a creature of the State, capable of

exercising only those powers granted to it by the Legislature

. . . ." Moyant, supra, 30 N.J. at 535. See also Dome Realty,

Inc. v. Paterson, 83 N.J. 212, 225 (1980) ("[M]unicipalities,

being created by the State, have no powers save those delegated

to them by the Legislature and the State Constitution.").

"Whether the State alone should act or should leave the

initiative and the solution to local government, rests in

legislative discretion." Inganamort, supra, 62 N.J. at 528.

Thus, "the Legislature may invest in local government the police

power to devise measures tailored to the local scene." Ibid.

(emphasis added).

When examining the municipal authority to regulate in the

first instance, the Supreme Court in Inganamort instructed

judicial review of an ordinance requires

three constituent questions: (1) does the
State Constitution prohibit delegation to
municipalities of the power . . . ; (2) if
that power may be granted, has the
Legislature done so; and (3) if the State
statutes vesting police power in
municipalities do embrace this area, is the
exercise of that power by local government

13 A-1775-13T1
 preempted or barred by reason of the
existence of other statutes dealing with the
subject matter.

[Id. at 527.]

The general grant defining a municipality's police power is

found in N.J.S.A. 40:48-2. The statute provides:

Any municipality may make, amend,
repeal and enforce such other ordinances,
regulations, rules and by-laws not contrary
to the laws of this state or of the United
States, as it may deem necessary and proper
for the good government, order and
protection of persons and property, and for
the preservation of the public health,
safety and welfare of the municipality and
its inhabitants, and as may be necessary to
carry into effect the powers and duties
conferred and imposed by this subtitle, or
by any law.

[N.J.S.A. 40:48-2.]

The Court has held this statute "authorizes a municipality

to take such action as it deems necessary and proper for the

purposes specified subject only to the limitation that such

action not be prohibited by or inconsistent with the

Constitution or the other statutes . . . ." Moyant, supra, 30

N.J. at 542 (citation and internal quotation marks omitted).

However, "[n]either the constitutional nor the statutory

provision is a blanket authorization to pursue the governing

body's particularized notion of the public good or to legislate

beyond the bestowed powers, express or implied." Repair Master,

14 A-1775-13T1
Inc. v. Borough of Paulsboro, 352 N.J. Super. 1, 8 (App. Div.

2002).

A municipality is also granted specific authority to

regulate local "buildings and structures and their use and

occupation to prevent and abate conditions therein harmful to

the health and safety of the occupants of said buildings and

structures and the general public in the municipality."

N.J.S.A. 40:48-2.12a. Specific statutes address imposing

registration requirements for residences containing two or more

families, N.J.S.A. 40:48-2.12c, and regulating "the maintenance

and condition of any unit of dwelling space, upon termination of

occupancy," N.J.S.A. 40:48-2.12m. These statutes do not

authorize licensure of residential apartments.

Contrary to defendant's and the League of Municipalities'

arguments, the powers to regulate and to license, although

related, are discrete. See, e.g., Moyant, supra, 30 N.J. at 545

("Registration and licensing are commonly accepted as such

reasonable regulatory means . . . ." (emphasis added)). The

Court addressed this distinction in Nelson Cooney & Sons v.

Township of South Harrison, 57 N.J. 384 (1971):

N.J.S.A. 40:52-1 covers a large number of
business and instrumentalities used therein
as the permitted subjects of municipal
licenses. Essentially all are also proper
subjects for police power regulatory
ordinances, authorized by N.J.S.A. 40:48-1

15 A-1775-13T1
 and 2. But the latter power does not
include the right to require a license
. . . .

[Bernardsville Quarry v. Borough of
Bernardsville, 129 N.J. 221, 229-30 (1992)
(quoting Nelson, supra, 57 N.J. at 390
n.4).]

See also Colonial Oaks W., Inc. v. E. Brunswick, 61 N.J. 560,

572 (1972) (same).

As identified during the trial court proceedings, defendant

had exercised regulatory authority over apartments. Ordinances

were adopted governing inspection of apartments prior to the

commencement of a new tenancy, assuring maintenance of the

premises and compliance with fire safety.

Because the Legislature has specifically addressed

licensing in Chapter 52 of Title 40, we reject defendant's

overarching proposition suggesting the general police power

regulatory authority, as found in N.J.S.A. 40:48-2 or N.J.S.A.

40:48-2.12m, encompasses the authority to license residential

rental units. See Zullo v. Bd. of Health, 9 N.J. 431, 437

(1952) ("The power to license and to levy fees therefor is not

inherent in local agencies exercising by delegation a portion of

the State's police power and in the absence of statutory grant

does not exist in a municipal corporation . . . ."). Thus, the

authority granted by the State to license rental properties,

which by its nature includes a revenue generating component, is

16 A-1775-13T1
circumscribed by the provisions of the Licensing Act. See

Bernardsville Quarry, supra, 129 N.J. at 229 ("N.J.S.A. 40:52-1

is simply a grant of power allowing municipalities to use

licenses ancillary to its powers to regulate.").

The Licensing Act provides, in pertinent part:

The governing body may make, amend,
repeal and enforce ordinances to license and
regulate:

. . . .

d. Hotels, boardinghouses, lodging and
rooming houses, trailer camps and camp
sites, motels, furnished and unfurnished
rented housing or living units and all other
places and buildings used for sleeping and
lodging purposes, and the occupancy thereof,
restaurants and all other eating places, and
the keepers thereof;

. . . .

n. The rental of real property for a term
less than 175 consecutive days for
residential purposes by a person having a
permanent place of residence elsewhere.

[N.J.S.A. 40:52-1.]

The Legislature's primary purpose in enacting the Licensing

Act was to "authorize municipalities to license and regulate, as

police measures for the public health, safety, morals or

welfare, the local businesses described therein, and only

incidentally to impose on the businesses thus licensed and

regulated license fees for revenue which may, at least within

17 A-1775-13T1
reasonable limits, exceed the regulatory costs." Salomon v.

Jersey City, 12 N.J. 379, 390 (1953). Therefore, a

municipality's exercised licensing authority "cannot be an

arbitrary exertion of th[at] power," Ring v. N. Arlington, 136

N.J.L. 494, 497 (Sup. Ct.), aff'd o.b., 1 N.J. 24 (1948), nor

can the exercise be unreasonable, Indep. Warehouses v. Scheele,

134 N.J.L. 133, 136 (E. & A. 1946), aff'd, 331 U.S. 70, 67 S.

Ct. 1062, 91 L. Ed. 1346 (1947).

In this matter, the parties' primary positions interpreting

the Licensing Act can be summed up as follows: defendant argues

the broad language in subsection (d) encompasses any form of

licensure of rental residences as apartments fall within

"furnished and unfurnished rented housing or living units."

Plaintiffs, on the other hand, reject this sweeping

interpretation, suggesting subsection (d) applies only to

temporary residential uses, drawing support from subsection (n),

which permits licensing authority over short-term residential

rentals, not more permanent dwellings. Plaintiffs argue if

authority to license residential real estate is included within

subsection (d), subsection (n) is rendered superfluous.

On its face, the statute appears to contain an ambiguity,

as the provisions of subsection (d) (directed to "furnished and

unfurnished rented housing or living units and all other places

18 A-1775-13T1
and buildings used for sleeping and lodging purposes, and the

occupancy thereof") would appear to include the subject of

subsection (n) (governing "[t]he rental of real property for a

term less than 175 consecutive days for residential purposes by

a person having a permanent place of residence elsewhere")

N.J.S.A. 40:52-1(d), (n) (emphasis added).

"Applying traditional principles of statutory construction,

we look to the legislative history to aid in determining the

legislative intent of a statute whose plain language is subject

to more than one reasonable interpretation." United Parcel

Serv. Gen. Servs. Co. v. Dir., Div. of Taxation, 220 N.J. 90, 94

(2014) (citation and internal quotation marks omitted). See

also DiProspero v. Penn, 183 N.J. 477, 492-93 (2005) ("[I]f

there is ambiguity in the statutory language that leads to more

than one plausible interpretation, we may turn to extrinsic

evidence, 'including legislative history, committee reports, and

contemporaneous construction.'" (quoting Cherry Hill Manor

Assocs. v. Faugno, 182 N.J. 64, 75 (2004))).

Subsection (d) as originally adopted provided municipal

licensing of "[h]otels, boarding houses, lodging and rooming

houses, and all other places and buildings used for sleeping and

lodging purposes, restaurants and all other eating places, and

the keepers thereof . . . ." L. 1941, c. 92. Thereafter the

19 A-1775-13T1
statute was amended, largely in response to judicial

interpretations.

By 1948, "trailer camps and camp sites" were added. L.

1948, c. 425. See Edwards v. Mayor & Council of Moonachie, 3

N.J. 17, 23 (1949) (concluding "[t]railer camps and camp sites,

in the view of the ordinance, comprise 'places' used for

'sleeping and lodging purposes'" governed by the statute).

The next amendment came on the heels of the Court's denial

of certification of this court's affirmance of a trial judge's

rejection of the scope of subsection (d) to include licensing

apartments. In Boulevard Apartments, Inc. v. Hasbrouck Heights,

86 N.J. Super. 189 (Law Div. 1965), aff'd o.b., 90 N.J. Super.

242 (App. Div.), certif. denied, 47 N.J. 239 (1966), the Law

Division held:

We do not consider an apartment house to be
in the same general or specific class as a
hotel, boarding house, lodging or rooming
house. These are commercial businesses
requiring regulation for the safety, health
and morals of the community. An apartment
house, where unfurnished apartments are
rented for a term, without overnight or
transient business, is in the same category
as a private or two- or three-family
residence.

. . . .

We are cognizant that the statute,
N.J.S.A. 40:52-1(d), contains the words "all
other places and buildings used for sleeping

20 A-1775-13T1
 and lodging purposes." We do not consider
apartment houses to be in that category.

[Id. at 193-94.]

Thereafter, subsection (d) was amended to add "motels, furnished

and unfurnished rented housing or living units . . . and the

occupancy thereof." L. 1968, c. 296.

In 1998, subsections (m), relating to rental of commercial

property, and (n), relating to residential rentals, were added.

L. 1997, c. 317. A legislative statement attached to the bill

when introduced, adding this new subsection, stated:

This bill would limit the authority of a
municipality to license the rental of
commercial and residential real property to
leases of less than 125 days. Under current
law, a municipality has the authority to
regulate all leases. This bill would
effectively limit that authority to seasonal
leases, such as weekly rentals in shore
municipalities.

[Ibid.]

The proposal was altered by the Senate Community Affairs

Committee, increasing 125 to 175 days. The amendment as adopted

did not make changes to subsection (d).

Since the 1998 amendment, few opportunities have been

presented for judicial review of these statutory provisions.3

3
In Lake Valley, a municipal ordinance imposing licensing
and inspection requirements upon a change in tenancy of
residential rentals was upheld upon a finding the State did not
(continued)

21 A-1775-13T1
Importantly, none of those cases considered the issue now before

the court.

Obligated as we are to "seek an interpretation that will

make the most consistent whole of the statute," In re Registrant

N.B., __ N.J. __, __ (2015) (slip op. at 28) (citations and

internal quotation marks omitted), we determine the bill

statement accompanying the 1998 amendment serves as powerful

evidence of the objectives and intentions of the Legislature

with respect to licensing residential rentals. We conclude

municipalities are not authorized to issue ordinances imposing

licenses for apartment units which provide tenancies of 175 days

or more.

Aligned with the maxim "expressio unius est exclusio

alterius," which means the inclusion of one excludes the other,

DiProspero, supra, 183 N.J. at 495, we understand the very

specific addition of subsection (n), which limits licensure to

(continued)
preempt the area by enacting the HMDA. Lake Valley, supra, 411
N.J. Super. at 505-07. Licensing authority was not examined.
See ibid. Similarly, in Repair Master, this court struck down
an ordinance regulating the nature of occupancy of rental
property; however, the issue of licensing authority was neither
challenged nor reviewed. Repair Master, supra, 352 N.J. Super.
at 14. Finally, in United Property Owners Association of Belmar
v. Borough of Belmar, 343 N.J. Super. 1, 32 (App. Div.), certif.
denied, 170 N.J. 390 (2001), we upheld the scope of an ordinance
regulating summer beach rentals, based on legislative authority,
including N.J.S.A. 40:52-1(n).

22 A-1775-13T1
residential rentals of "less than 175 consecutive days,"

precludes licensure of residential rentals for 175 days or more.

Further, the Legislature's addition of this discrete provision,

expressly limiting licenses to "rental of real property for a

term less than 175 consecutive days for residential purposes by

a person having a permanent place of residence elsewhere," must

be considered purposeful and made while cognizant of subsection

(d) because "[a] legislative body in this State is presumed to

be familiar . . . with the statutory law of the State . . . ."

Yanow v. Seven Oaks Park, Inc., 11 N.J. 341, 350 (1953). The

bill's interpretative statement reinforces this view and

reflects an explicit intent to limit municipal licensing

authority "to seasonal leases" and, therefore, assures the full

meaning of all statutory provisions. See Jersey Cent. Power &

Light, supra, 212 N.J. at 587 (stating a court must assume

legislative enactments do not use "any unnecessary or

meaningless language" (citation and internal quotation marks

omitted)).

The trial judge did not mention the language or impact of

subsection (n) when rendering his decision. However, we find

this provision critical to the overall understanding of the

scope of statutory authority. Reading the whole of the statute,

we conclude the addition of a separate section directed to

23 A-1775-13T1
short-term or seasonal residential leases suggests temporal

implications when considering the meaning of "furnished and

unfurnished rental units" described in subsection (d). This is

especially true because the other arrangements mentioned in

subsection (d) refer to short-term living (e.g., motels, hotels,

boardinghouses, rooming houses and camp sites). Reading these

two provisions in this way reconciles the Legislature's decision

not to amend subsection (d) when adding subsection (n). See

Shelton, supra, 214 N.J. at 440 ("Words in a statute should not

be read in isolation.")

We cannot agree with defendant and the League of

Municipalities that subsection (n) merely provides another type

of rental housing subject to licensure or was limited to rentals

in resort communities. The interpretative statement to the 1998

amendment refutes these assertions. Were defendant's view

correct, a clarification in (d) would have been sufficient.

Instead, we conclude the addition of (n) was designed and

significant as it reflects a specific intent to limit licensing

of residential rentals, which were viewed differently from the

living arrangements listed in subsection (d).

As we stated above, licensing is a distinct function

authorized by N.J.S.A. 40:52-1. We conclude the Legislature

chose to limit municipal licensing authority to short-term lease

24 A-1775-13T1
arrangements. If that interpretation is incorrect, the

Legislature will act to provide further clarification.

Therefore, defendant may not mandate by ordinance licensure

of residential rentals for 175 days or more, accompanied by an

annual licensing fee. The ordinance mandating this licensure is

invalid as ultra vires and unenforceable.4

We choose not to address plaintiffs' alternative argument,

as we conclude it is moot. Comando v. Nugiel, 436 N.J. Super.

203, 219 (App. Div. 2014) (declining discussion of issue when

controversy is concluded).

We vacate the summary judgment dismissal of plaintiffs'

complaint and reverse the order upholding defendant's licensing

ordinance. We remand this matter to the Law Division for

further proceedings as necessitated by our opinion. We do not

retain jurisdiction.

Reversed and remanded.

4
Our opinion is confined to the authority to license and
does not address defendant's regulatory or inspection authority
granted by other statutes designed to assure rental premises
remain safe, building and fire code compliant and structurally
sound. See Devine v. Mantua Twp., 28 N.J. Super. 299, 305 (Law
Div. 1953).

25 A-1775-13T1