NJ small claims facts
In the Small Claims section of the Civil Division, the maximum demand is $3000. If your action is against a landlord for failure to return a security deposit, the maximum demand is $5000. In addition, there is a separate Small Claims complaint for motor vehicle accidents.
Small claims won't allow you to recover more than three large.
That presumes, of ourse, that you have a case; which you don't.
Nevertheless, you do have the right to sue anyone for anything which aggrieves you.
I suggest you find a new place to live.
The LL wants more money.
You are not amenable to paying more money.
If that holds true, you and the LL will never agree.
Give your notice, move out, move on with your life.
You can't prevent a LL for raising the rent.
A LL can't force you to pay more.
Time to move on, move out, live your life.