Affordable Housing Owners Sue Mahwah Over '95-5 Rule'

A group of more than 150 affordable homeowners in Mahwah filed a lawsuit against the township Wednesday alleging that township officials are unfairly subjecting them to rules outside of those listed in their original housing contracts, the group announced Wednesday night.

The 156 plaintiffs all own affordable housing units in Mahwah and have organized themselves as the Mahwah Affordable Housing Owners, according to statements made by the group’s law firm, Hill Wallack, LLP.

The homeowners say their contracts allowed them to sell the units at fair market value once their affordable agreements reached a 25-year maturation point, which many of the units are coming upon now. 

However, the township is requiring all affordable homeowners to follow the state's "95-5 rule," that says if an affordable housing homeowner sells at full market value, 95% of the difference between the affordable rate and the full-market value goes to the town’s Affordable Housing fund.

“The lawsuit alleges that Mahwah has told the homeowners that they cannot sell their homes except with the consent of the township, even after the 25-year period of restrictions has expired,” the law firm said.

“Moreover, they must either sell their homes to the township at the restricted affordable price or must pay to the township 95% of the difference between the restricted affordable price and the market price.”

Lawyers say the group is seeking to be able to sell their homes under the rules outlined in their original agreements.

Mahwah officials said Wednesday they could not comment on the litigation, but referenced previous comments they’ve made to the homeowners at Housing Commission meetings discussing this issue.

According to past comments made by Mahwah township attorney Andy Fede, Mahwah’s interpretation of the state’s “95-5” affordable housing selling regulation is that Mahwah is obligated to enforce it, and that although it was passed in 2004, it is retroactive, and applies to all of the 25-year-old units in town.

“The plaintiffs allege that, as to their homes, Mahwah is not subject to any such requirement,” Hill Wallack lawyer Stephen M. Eisdorfer said.

“We hope that the elected officials of Mahwah give this further thought and that they will agree this is fair and that it is required by the terms of the original agreement between the township and homeowners.”

Township officials have previously said that a court case is likely the only way to settle the issue.