New Jersey Rent Increase Laws: Know Your Rights

Rental prices have been increasing across the U.S., and New Jersey is no different. In the past year, rent in New Jersey has increased by $148 per month — a significant change for the average renter in the state. 

And while increases are inevitable, there are nuances you should keep in mind to ensure you aren’t getting the short end of the stick. 

With that in mind, here’s an overview of the rent increase laws in New Jersey so you can be prepared for your next rent hike. 

How Much Can a Landlord Raise Rent in NJ?

There are no laws governing rent increases at the state level in New Jersey. Technically, landlords in New Jersey are free to increase the rent as they want.

But that’s not true for most cities and counties in NJ. That’s because NJ is one of the few states that doesn’t apply Dillon’s rule. Municipalities can freely enforce their own rent control rules, and landlords must abide by these local laws. 

Many municipalities have introduced local rent control laws and limited the rent increase to a certain percentage. However, the criteria for rental increase varies for each municipality.

Some municipalities base it on the CPI (Consumer Price Index), which is the average inflation over time for a location. For example:

• Atlantic City has a rent increase limit according to the CPI of the past 12 months.
• Newark limits its rent increases according to the monthly change in the CPI, as notified by the City of Newark.
• Bayonne also follows the CPI but caps the rent increase at 5.5% of the previous rent.
• Jersey City follows the quarterly CPI, but the rent increase should not be greater than 4%.

Some municipalities also consider who bears the cost of utilities before determining the rent increase. For example, West Orange allows a 3% rent increase per annum if the landlord pays for heat. But if the tenant pays the cost of heat, the rent hike is capped at 2%.

Other cities like Fort Lee and Camden have a flat maximum rent increase limit. 

That said, some rental properties, such as multitenant units, may be exempt from rent control laws in some cities. You need to check with the local government for such exceptions.

Even though local bodies have complete freedom to implement rent control laws, few counties, like Hunterdon and Cumberland, rely on state laws. In these counties, property owners are free to hike the rent as much as they want.

New Jersey Rent Increase Laws

There are other tenant and landlord laws in New Jersey you should consider when facing a rent increase. They have to do with the following:

Notice Period

Your landlord needs to provide sufficient written notice before increasing the rent — usually 30 days or more.

However, several local ordinance laws require a longer notice period, depending on the length of the tenancy. For month-to-month lease agreements, landlords need to give a month’s notice before increasing the rent.

You can also negotiate a longer notice period with your landlord and state it in your rental agreement during the start of the tenancy. 

This gives you sufficient time to prepare your finances for the coming months, negotiate the rent, or find a new place at a more reasonable price.

Time and Frequency of Increases

Even if landlords are free to increase rent with proper notice, they can’t do it whenever they want to.

According to New Jersey’s laws, landlords cannot change the rent during an active lease.

Once you’ve agreed on a rent and signed the lease, the rent remains the same till the end of tenancy.

They can only change the rent for the upcoming tenancy and give you the option to either accept the increased rent or vacate the property.

Moreover, landlords can only increase rent once every 12 months for a given agreement. 

The Department of Community Affairs (DCA) must approve any rent increase or decrease when starting a new agreement. 

Security Deposits

If the rent increases, you might also be worried about a hike in the security deposit. But in the state of New Jersey, there are strict limits on how much a landlord can collect in security deposits.

While landlords can increase the security deposit along with the rent, the increase can’t exceed more than 10% of the previous amount. Also, the total deposit amount should never exceed 1.5 months' rent. Just as in the case of a rent increase, landlords are also supposed to give you a 30-day notice for a security deposit hike. 

Unreasonable Rent Increases

Landlords may introduce rent increases beyond justification, especially in cities without local rent control laws. That said, you have the right to contest the rent increase. You are also free to withhold the additional rent amount and continue paying the previous rent.

Landlords can file a case against the tenant in such cases, but the landlord will be the one responsible for legally justifying the rent increase. Just note that if the court accepts the rent increase, you will have to pay the total withheld amount as a lump sum.

You can also file a civil case in court if your landlord hikes the security deposit beyond 10%.

How To Determine if a Rent Increase Is Legal in NJ

If your city has local rent control ordinances, any rent increase beyond the maximum percentage for that location is illegal. If your landlord still increases the rent to a higher percentage without any special modifications to the rental property, you can file a legal case against them.

It’s also illegal for landlords to increase the rent as an act of retaliation. For example, if you’ve filed a complaint against the landlord due to negligence towards the rental property’s maintenance, they can’t increase the rent just to get back at you.

New Jersey’s Fair Housing Law also prohibits landlords from increasing the rent or evicting tenants based on color, race, origin, and disabilities.

If you find the rent increase unfair or believe you’re being discriminated against, you can file a complaint with the New Jersey Division on Civil Rights (DCR) within 180 days of the alleged offense. 

How To Negotiate a Lower Rent in NJ

Although New Jersey has no state-wide rent increase laws, we can still call it a tenant-friendly state thanks to the rent control limits in various cities and strong landlord-tenant laws. 

In the event of an increase, you can negotiate a better deal with your landlord by following these tips:

Know the Laws

In New Jersey, laws vary from city to city. Knowing the local laws may help you identify nuances that may legally allow you to ask for a lower rent.

For example, if you stay in West Orange, you can negotiate your rent increase from 3% to 2% by paying for your own heat and utilities. In cities that follow the monthly CPI change, you might benefit from changing the length of tenancy.

You can also determine if a rent increase is fair and seek legal remedies only if you’re aware of the laws in your city.

Do Your Market Research

Knowing the current rental market rates for a similar property type gives you a ballpark estimate of acceptable rent. This might be a great starting point for your negotiations with your landlord.

It might also make you rethink your decision to negotiate if you find the market rates much higher than your new rent.

Keep It Reasonable

Asking to waive the complete rent increase may be too much of an ask. Instead, think of conditions that your landlord may accept. 

Depending on the type of rental property, a $50- $100 monthly decrease may be justified. Use your market research to estimate how much rent decrease you can request. 

If the rent is on par with the current market rates, you could also negotiate the security deposit, lease term, and any other aspects of the rental agreement as a fair ask.

Have a Good Tenant Record

A good tenant may save a landlord considerable costs, sometimes worth more than a rent increase. Your landlord may be more willing to negotiate a lower rent and continue your tenancy if you’ve got a good track record as a tenant. 

This includes taking care of the property, ensuring timely rent payments, and even being a good neighbor. Beyond that, having renters insurance is another factor that might add to your good tenant record.

According to New Jersey law, renters insurance isn’t necessary for tenants. However, many landlords make it mandatory by stating it in the rental agreement — so having the insurance just makes you a better tenant. After all, this helps them avoid legal battles and saves them costs in case any mishap occurs. 

And regardless of what your landlord wants, having renters insurance benefits you, too. It gives you coverage for personal belongings, such as jewelry and musical instruments, that would otherwise not be included in your landlord’s insurance. 

If you’d like to learn more about renters insurance, check out our guide on renters insurance in New Jersey.

Final Thoughts: New Jersey Rent Increase Laws

New Jersey does not have state-wide rent control laws. However, landlords must follow local laws that may limit rent increases in certain cities. That’s why, as a tenant, you can safeguard yourself from unexpected rent increases by understanding the laws and your rights. 

And remember, whether you end up renewing your lease, negotiating a lower rent, or moving places, Goodcover renters insurance has your back. Get a quote today.

Note: This post is for informational purposes; insurance regulation and coverage specifics vary by location and person. Check your policy for exact coverage information.

For additional questions, reach out to us – we’re happy to help.