A New Jersey appeals court has rejected a challenge to numerous local laws imposing fees on landlords, finding that the ordinances were not enacted merely to generate revenue.

In Cona v. Township of Washington, the Appellate Division panel on Wednesday distinguished the challenged ordinances from another local measure—overturned in a 2015 Appellate Division ruling, Timber Glen Phase III v. Township of Hamilton—that required licensing of landlords. In that case, the municipality's imposition of a $100 annual license fee on landlords, in addition to fees for habitability inspections, was deemed ultra vires and unenforceable.

In three consolidated cases that were the subject of the Cona appeal, the plaintiffs claimed that the defendant municipalities, all in Gloucester County, violated the New Jersey Civil Rights Act by enacting the ordinances at issue.

The plaintiffs' suits were dismissed by two Superior Court judges in Gloucester County: Judge David Morgan dismissed suits filed by Christopher Cona against Washington Township, and by William Brody and Kathleen O'Hara against Woodbury, Westville, Glassboro, National Park and Deptford. Judge Jean McMaster dismissed a suit filed by Sharon Downs against Paulsboro.

On appeal, Appellate Division Judges Marie Simonelli, Michael Haas and Garry Rothstadt affirmed the judges below, finding that the challenged ordinances are reasonably related to municipalities' regulatory powers, as authorized by statute, and were distinguishable from the revenue-generation purpose that was invalidated in Timber Glen.

Rothstadt, writing for the court in a published opinion, said fees charged by the challenged ordinances were reasonably related to municipalities' exercise of their obligation to promote the safety and welfare of their residents.

Rothstadt was also on the panel that issued the Timber Glen ruling.

But, the Cona panel said, continued use of the term “license fees” by some municipalities in their ordinances “flies in the face of Timber Glen and causes considerable confusion.”

The panel remanded the cases to McMaster and Morgan for entry of an order directing the defendant municipalities to “strike the reference to their fees as license fees and changing the designation of any requirement for registration or inspection from being part of a licensing requirement.”

In Timber Glen, the defendant municipality claimed authority under the Licensing Act to impose its licensing fee. In that case, the Appellate Division said the powers to regulate and to license, although related, are discrete. The panel said in that case that the power to regulate did not encompass the power to require a license and payment of a fee, and that a 1998 amendment to the Licensing Act prohibited the licensing of rental units that are rented for 175 days or more.

The challengers in Wednesday's decision were represented by Woodbury attorney Lewis Adler. He did not respond to a request for comment about the ruling.

Gary Marek of Timothy Scaffidi's office in Woodbury, who represented Westville and Glassboro on appeal, said many municipalities used the terms “license” and “regulation” interchangeably, although the municipalities he represented changed the language of their ordinances after the Timber Glen ruling. Marek added, “We felt it was important that municipalities have the right to regulate rental properties and were able to go in and do inspections and make sure the properties meet safety and health requirements.”

Brian Shotts of Grace Marmero & Associates in Woodbury, who represented Washington and Deptford, said that after Timber Glen, “there was some confusion about what that case actually meant.” Guidance came in a 2016 unpublished Appellate Division case, State v. Mill Village Apartments, and the latest case provides guidance in the form of a published decision.

James Pierson of Angelini Viniar & Freedman in Woodbury, who represented Woodbury, said, “A lot of these ordinances were written many years ago, before the issue arose, and may have used the word 'license,' when in reality it was more of a regulation issue.”

M. James Maley of Maley Givens In Collingswood, representing Paulsboro, said the appellants in Cona made no credible allegations that the fees charged were unreasonable, and the court refused to allow a “fishing expedition” to evaluate if the amounts charged were reasonable.

Walter Kawalec III of Marshall Dennehey Warner Coleman & Goggin in Mount Laurel, representing the Borough of National Park, said he was not authorized by his client to comment.