New Jersey Real Estate Attorney Blog

In 1996, in an effort to solve an epidemic of rampant drug use in publicly assisted housing, President Clinton announced a "one strike and you're out" initiative for Section 8 and public housing projects. The new guidelines included more comprehensive screening and stricter eviction policies relating to drug use and criminal conduct. Under the "one strike and you're out" policy, public housing authorities are allowed to refuse admission to any household who has been evicted from public or Section 8 housing. In the matter of Department of Housing and Urban Development v. Rucker, 535 U.S. 125 (2002), the United States Supreme Court affirmed the right of public housing authorities, to evict entire public housing households whenever any member of the household, or any household guest, engages in drug-related or certain other criminal activity.

Notwithstanding the Rucker ruling, in the recent matter of Newark Housing Authority v. Martinez-Vega, Docket Number ESX-LT-20023-11, New Jersey Superior Court Judge Mahlon Fast placed some limitations on the powers given to housing authorities. Judge Fast, whose name many may recognize as being the long time authority in the area landlord tenant law, ruled that the Newark Housing Authority had exceeded its powers in attempting to evict a tenant whose visiting son had been arrested at the apartment for gun and drug possession. In so ruling, Judge Fast indicated that a tenant should not be automatically penalized for the actions of a non-resident family member.

The decision by Judge Fast is, in fact, consistent with the decision Appellate Court's decision in the matter of Oakwood Plaza Apartments v. Smith, 352 N.J. Super. 467 (2002). In that matter, the Court ruled that eviction actions from federally subsidized housing projects cannot be arbitrary or capricious and that it is the duty of the courts to ensure that landlords exercise discretion in properly weighing the salient factors.

In the week between Christmas and New Year's Day, when landlords have historically encountered the most difficulty finding tenants to fill their vacancies, the issue of rent loss is once again in the forefront of our discussion on maximizing revenues for all the landlords we represent. In 2007, we saw a surge of buildings being sold and converted to condominiums. Unfortunately, in many cases, their developers have been unable to sell those condominiums. To make matters worse, the bad economic conditions and failing job market have forced younger rental prospects to continue to live with their parents, and older prospects to either downsize, move in with roommates, or to simply move out of New Jersey. The result is a high number of vacancies and few tenants to fill them. Landlords who are used to pre-screening their tenants for credit problems and eviction history may no longer have that luxury. Higher than ever vacancy rates have forced landlords to either rent to a high risk tenant face the proposition of leaving the apartment vacant. But perhaps there is another option that has been overlooked.

In a recent event our office sponsored, we met a gentleman with a rather unique business. He insures risky tenants. When a tenant with a less than perfect credit rating or eviction history wants to get an apartment, and landlords do not want to take the risk, the tenant can pay the business a rather modest fee to essentially write an insurance policy. In the event that the tenant default s in the lease, the landlord still gets paid, and therefore has not assumed any risk. The company calling themselves "Insurent" has insured thousands of tenants throughout New York State and is now in the process of expanding their practice into New Jersey. Offering a variety of services focused on securing the performance of tenants, Insurent enables landlords to keep their buildings full, while also guaranteeing that the landlord will not take the risk.

Finally, with the increase in the number of companies now offering rental insurance services, landlords who avail themselves of rent guaranteeing services must remember to use extra caution to ensure that they continue to employ the same uniform standards for acceptance of all applicants. Historically, income, credit worthiness, eviction history and criminal background have been the four major factors in determining whether to accept or reject a tenant. Landlords who now choose to use rental insurance programs, will now be faced with the increased challenge of developing standards that will keep them protected from discrimination claims.

The recent downturn in the economy has substantially impacted the business of residential rentals. As tenants continue to struggle to pay their rents on time, they also continue to incur late fees, thus further depleting their limited resources. The question then becomes whether late fees are allowed, and if so, how much of a late fee can be charged?

When Can the Late Fee be Charged?
In a standard non-payment of rent eviction case, it is clear that the Court's jurisdiction is limited strictly to the issue of rents. It is therefore necessary for a landlord seeking a late fee as part an eviction mater to demonstrate that there is a written lease setting forth that late fees are "additional rent." In cases where there is no written lease, or in cases where the written lease does not use the term "additional rent," the late fee cannot be included as part of the balance that the tenant must pay in order to avoid eviction. It should also be noted that even when there is a written leases calling late fees "additional rent," the landlord still cannot include that item in cases where the tenant is receiving Federal housing assistance.

Is there a limit to the Late Fee?
With regard to limitations on late fees, there is apparently a difference of opinion among Judges. Several Court decisions have held that a late fee should not be punitive and must reflect the actual "administrative expense" that the creditor incurs in processing the late payment. In the matter of Kuhn v. Hopkins, A-4507-96T1 (App. Div. 1998), the Court ruled that a late fee would not be enforceable if it exceeded the landlord's actual damages caused by the late payment. To this end, some Judges have enforced a 5% limitation on late fees.

Mandatory Grace Period
Most leases provide for a grace period before a late fee can be imposed. However, even in cases where the lease does not provide for a grace period, N.J.S.A. 2A:42-6.1 provides that certain tenants are automatically afforded a 5 business day grace period before a late fee can be imposed. Under N.J.S.A. 2A:42-6.3, those tenants are limited to those individuals receiving:

1. Social Security old age pensions
2. Railroad Retirement Pensions
3. Other governmental pensions in lieu of Social Security Old Age Pensions
4. Social Security Disability Benefits
5. Supplemental Security Income, or
6. Benefits under Work First New Jersey

Our firm previously reported on the importance of obtaining a Landlord Registration Statement. This time, we are going to discuss the Certificate of Occupancy. Unlike the Landlord Registration Statement, a Certificate of Occupancy is not a requirement for evicting a tenant in New Jersey. The lack of a Certificate of Occupancy may, however, bar recovery of rents in a civil action.

Most towns in New Jersey require a landlord to obtain a new Certificate of Occupancy each and every time a new tenant moves in to a residential dwelling. Some towns even require Certificates of Occupancy for commercial rentals. Inspections requirements for a certificate of occupancy vary greatly by municipality. All towns will check the operation of the smoke detectors, and in cases where there is gas heating, the carbon monoxide detector will also be inspected. Some municipalities will conduct much more thorough examinations, including items that are not even remotely related to safety issues in the rented premises.

While most landlords are familiar with the fines which the town may impose for failing to obtain a certificate of occupancy, few landlords are familiar with the more costly consequences which can result from such failure. In towns where certificates of occupancy are required, a dwelling rented without a certificate of occupancy constitutes an illegal contract. Consequently, in the matter of Khoudary v. Salem Board of Social Services, 260 N.J.S. 79 (App. Div. 1992), the Court ruled that a landlord who rents a dwelling without a certificate of occupancy does not have the right to file a suit for rents.

Put simply, the Khoudary Court reiterated the well known concept that it would not help the Plaintiff enforce an illegal contract. In the event that a tenant vacates the dwelling owing rents, either for prior months or months that may become due under the unexpired lease, a landlord may not file an action to collect the rents, and furthermore, may not apply any of the tenant's security deposit toward these rents. The landlord could, however, still bring an action or withhold security for physical damages, such as destruction of the rented dwelling. While it remains unclear, under the Khoudary decision, whether a Court would allow a tenant to file an action for return of all rents previously paid under the illegal contract; it is likely that most Courts would rule that the tenant should pay some rents for the benefit of the use of the apartment, under principles of quantum meruit.

For many years, Courts had interpreted the decision in Khoudary to mean that failure to obtain a Certificate of Occupancy was a bar to evictions. However, that issue has been since clarified. In the matter of McQueen v. Brown and Cook, 342 NJS 120 (App. Div. 2001), the Court determined that since it is clear that letting a tenant remain in the illegal rental would be contrary to public policy, and since a tenant should not be able to benefit from the illegal contract, a landlord still maintained the right to evict the tenant, even if he or she did not obtain a Certificate of Occupancy.

Since 2002, the Law Office of Michael D. Mirne, L.L.C. has filed several thousand eviction complaints in 13 different counties throughout New Jersey. Each week, a few landlords ask us whether they need to be present on the day of Court. While the question may sound simple, the answer is sometimes more complicated.

Defaults
The vast majority of all evictions filed in New Jersey are based upon non-payment of rent. Over 1/3 of evictions based upon nonpayment of rent result in Defaults. These are matters in which the tenant fails to appear for Court, and a Judgment for Possession is issued. The remainder of cases, in which both parties appear at Court, are then marked "Ready." These matters are, in most counties, mediated by either the parties on their own, or by an employee of the Court, skilled at bringing the matter to a fast resolution without trial. Based on our experience, only about 5% of non-payment of rent cases remain unsettled after mediation and must proceed to trial.

Non Contested Cases
Out of the 5% of cases that go to trial, some are what we may call "uncontested fact cases." Anyone who has been to landlord tenant Court in the last 10 years is familiar with the instructions that are read prior to the calendar call. In particular is the instruction that states "the Judge has no authority to make the landlord wait for rent or force the landlord to take it in installments." Notwithstanding this instruction, we still see cases in which a tenant who agrees he or she owes money still insists on going to trial in the erroneous belief that the Judge will take the tenant's circumstances into account and grant some leniency. Tenancy Court is somewhat unique in the number of Defendants who go to trial, essentially admitting to all the allegations of the Complaint. Not surprisingly, these cases always result in a Judgment for Possession.

Contested Cases
The presumption among many clients is that an attorney can testify for them so they don't need to be present. Unfortunately, RPC 3.7 specifically excludes a lawyer from giving any testimony in a trial in which he or she is also acting as the attorney for his or her client. Therefore, any contested matter, in which a fact is in dispute, requires the testimony of a witness for the Plaintiff. Usually, the landlord or the property manager is the best witness. But on occasion, other witnesses need to be called to address the issue of the amount of rent that is due.

Notice Cases
While the vast majority of cases heard in Landlord Tenant Court involve the non-payment of rent, other causes for eviction, such as lease violations, damage to the premises, and disorderly conduct occasionally arise. In these types of cases, the Court requires oral testimony from the Plaintiff even in cases when the tenant does not appear in Court to contest the matter. These types of cases are generally referred to as "Notice Cases" and the hearing that follows is called a Proof Hearing. Since testimony is always required for these types of cases, our office will call you to discuss your case at least 10 days prior to trial and we will subpoena any necessary witnesses.

We recently learned of the case of an Essex County man who has repeatedly delayed evictions through various techniques. The most common technique involved the practice of causing substantial damages to his rented dwelling, and then reporting the damages to code enforcement, under the misrepresentation that the damages were either present when he took possession, or became present by reasons other than his own malfeasance. Under recent amendments to New Jersey's Forcible Entry and Detainer Act, it is a Disorderly Persons offense for a tenant who is facing eviction to vandalize his apartment. Nevertheless, it is very often the landlords who are brought before Municipal Court Judges to try to explain why they rented an apartment with numerous habitability defects.

Several years ago, when I was working as a property manager, I encountered a similar situation with a tenant who moved in to one of the buildings I was managing, and promptly proceeded to remove the strike plate from his front door entry. He then called Code Enforcement to advise that office that I had rented an apartment that was not secure. Code Enforcement then called me and told me that I would be fined if I did not immediately fix the apartment. I then conducted some further research and contacted a previous landlord of this particular tenant. Needless to say, that landlord had some choice words to say about the tenant to who I had rented one of my apartments.

The lesson I quickly learned is to get the complete history of all tenants before renting to them. There are several sources for this information, including interviewing the prior landlords, as well as various internet based companies that will inform you of an applicant's eviction history for a very modest price. In the case of the Essex County man, who has already cost several landlords thousands of dollars, some landlords have reported that they "inherited" the tenant when they purchased the property from a prior landlord. In these cases, proper due diligence would require conducting a background search on every tenant residing in a property before closing. The lesson in that case is "when buying an investment property, make sure you know what you are investing in." For the landlords who have already fallen victim to this scam, it is a difficult lesson to learn. For the rest of us, it serves as a reminder to make sure we know who we are renting to, before we sign our contract.

Anyone who has been to Landlord Tenant Court during the last ten years has heard the pre-calendar instructions, and by now, may even have those instructions memorized. Each time, when the Judge gets to the part that states "a Landlord may not lock out a tenant by himself or herself," most of us have wondered, at some point, what kind of landlord would attempt to do such a thing. Perhaps even more important, is the question of what would be the consequences if a Landlord were to illegally lock out a tenant? During the past several weeks, an alarming number of commercial tenants have come to our office with complaints that their landlords have threatened to lock them out. In an effort to answer some of their questions, we have compiled some of the key points in the law.

Under N.J.S.A. 2A:39-1, a landlord who illegally locks out a tenant may be subject to both civil and criminal penalties. As far as the civil penalties go, the landlord may need to reimburse the tenant for up to three times the monthly rent and all damages proximately caused including attorney's fees. The criminal penalties, which were recently added to the Statute, include a charge of disorderly persons for anyone either performing the illegal lockout or owning the property where the illegal lockout was performed. As an ancillary matter, landlords should keep in mind the fact that shutting off any utility which the tenant has been receiving is considered to be tantamount to an illegal lockout under the law.

The immediate concern of tenants who are illegally locked out is getting back possession of the dwelling. This is done by filing an emergent application, known as an Order to Show Cause, with the Court. The fee for this application is $50 and the Court will take all steps necessary to try to ensure that the tenant's application can be heard on the day it is filed. Since there is a significant chance that the landlord will not be available to appear that day in Court, on such short notice, to give the Court his or her argument, the Judge will usually sign a temporary order at the time of the tenant's appearance, allowing the tenant back into the premises, but also setting up a "return date," usually 3 to 5 later, when the landlord and tenant can both attend to argue whether or not the tenant should be permanently allowed back into the premises. Any argument regarding financial losses will usually be saved for a later date when a proper trial can be held.

In recent months, Tenancy Courts have begun seeing an increasing number of eviction actions based upon the claim of "Habitual Late Payment of Rent." While the Statute addressing this issue, N.J.S.A. 2A:18-61.1(j), was clear in its intent, recent case law has added to the requirements originally contemplated by the Statute. In addition, some case law has even suggested that the issue of non-payment of rent is not even an issue of law, but rather an issue of fact. In this week's article we will discuss the most recent mandates for landlords seeking to evict a tenant for Habitual Late Payment of Rent.

Notice to Cease
The Notice to Cease is a required notice in for certain grounds for eviction under New Jersey landlord tenant law. It is a warning notice, which advises the tenant that he or she is doing something wrong and that an eviction will be filed unless the wrongful action ceases. Actions for Habitual Late Payment require this Notice. However, in recognition of the fact that very often the late payments by the tenants are not consecutive, and in fact sometimes there will be several "on-time" payments in between the late payments, recent case law suggests that two Notices to Cease are required for this ground. The first Notice to Cease can be sent as early as the second late payment. In the event that the tenant is late a third time, a second Notice to Cease should be served.

Notice to Quit
In the event that the tenant is late a fourth time, the tenant may be served with a Notice to Quit. The Notice to Quit is the Notice terminating the tenancy, and must give the tenant not less than 1 month from the next rental payment becoming due before the lease is terminated. At the expiration of the time period set forth in the Notice to Quit, an eviction action may be filed.

Recent Case Law
In the matter of Matthew Carter Apartments v. Kathy Richardson, the Appellate Division re-examined the issue of Habitual Late Payment of Rent. In that matter, the Court debated over the issue of whether late payments following the various notices actually constituted cause for eviction under the Statute. It is implausible that the Statute could leave any room for interpretation. However, the Appellate Division noted that, in certain cases, where the rent had been paid on time for several months, it is possible that one more late payment several months later may not constitute Habitual Late Payment, even though the Statute included no indication that such conduct would not constitute Habitual Late Payment of Rent. The Court therefore held that the issue of whether Habitual Late Payment of Rent exists is ultimately a question of fact for the Judge to decide, rather than a question of law, which would only require the necessary late payments in order to prove.

New Jersey's Landlord Tenant rules are overdue for a major overhaul. Many of the laws concerning landlord tenant relationships have evolved over the course of several hundred years. The resulting tenancy law has been a compilation of a myriad of Statutes, Court Rules and Administrative Codes, many of which are ambiguous, antiquated, or simply conflicting with each other.

A proposed new proposed Statute, entitled N.J.S.A. 46A, has been drafted to replace existing Landlord Tenant Laws. While the legislature has not yet adopted the proposal, it is expected that the newly refined Statute will become law within a few years. It remains uncertain what effect the new Statute will have on the existing case law, much of which is based upon the Court's interpretation of the prior Statute.

Most of the changes in the proposed are minor corrections, clarifications and reorganizations of the prior law. Added to the revised Statute are various items including a new cause for eviction for tenants who create imminent serious danger to others, the rental property or to the immediate vicinity of the rental premises. The new proposal also includes model forms for various notices that continue to be a prerequesite for all grounds for eviction other than non-payment of rent.

Finally, we regret that the obscure law that enabled us to sue a holdover tenant for double rent, will be replaced with a far more tenant friendly version, which only allows a residential landlord to seek "actual damages" caused by the tenant's willful holdover.

In the wake of the recent epidemic of beg bug outbreaks in both residential and commercial properties, an increasing number of lawsuits have followed. In this week's article, we will examine some of the legal issues that may arise during a bed bug suit.

Tenants seeking to bring an action against a landlord due to bed bugs must not only prove that the bed bugs caused an injury, but they must also prove that the landlord was negligent. The matter of Marilyn Mitchell v. Capitol Management Corp (2010) involved a residential tenant who had discovered bed bugs in her apartment. She had contacted the landlord to report the infestation and the landlord responded by having the apartment exterminated that week. The tenant then discarded most of her clothing and furniture in order to ensure that the bed bug problem would not return. The tenant, who was living with her ten year old son, moved to a new location and did not return to the apartment.

In addition to the physical injuries suffered by the tenant, she also claimed that she suffered from post traumatic stress disorder. On Appeal, the tenant argued that the mere existence of bed bugs should create a "presumption of negligence" on the part of the landlord. She further argued that the failure of the landlord to take "aggressive measures to eradicate infestation" is also negligence. The Appellate Court disagreed with both of the tenant's theories, and ruled in favor of the landlord. While the Appellate Division did not question the legitimacy of the injuries allegedly suffered by the tenant, it did not find any evidence to support the notion that the landlord was negligent.

In a previous article, we discussed Marini defenses available to tenants who are experiencing habitability problems which do not necessarily render their dwellings completely uninhabitable. In more severe cases, it may become necessary for the tenant to permanently vacate the dwelling, by claiming a "constructive eviction." The matter of Reste Realty v. Cooper, 251 A.2d 268 (1969) involved a commercial tenant who was experiencing chronic and persistent flooding. The landlord argued that since there was no written covenant of habitability, that the tenant assumed the full risk for any loss of use of the premises. The Court ruled in favor of the tenant, citing the theory that it is the duty of the landlord to alert the tenant to any hidden or latent defects of which the landlord is aware and of which the tenant may not easily discover.

Recently, the Court has applied the theory of constructive eviction to a complaint for mold. In the recent matter of Marusiak v. McCall, the Tenant claimed that she was forced to move from her residential dwelling due to mold. The landlord refused to return the tenant's security deposit, claiming that it was being withheld due to unpaid rent for the time period after the Defendant vacated the premises. The tenant brought suit against the landlord claiming that she was constructively evicted, thus terminating her duty to pay rent, and further requiring the landlord to return the security deposit back to her. The Court agreed with the tenant and awarded her with the return of her security as well as damages under the Rent Security Deposit Act.

A tenant who intends to rely on the theory of constructive eviction and vacate a dwelling prior to the end of the lease should be cautioned that there is no guarantee that a Court will rule in his or her favor. The Law Office of Michael D. Mirne, L.L.C., which routinely represents landlords in collection matters against former tenants, has observed that tenants who are being sued for past due rent often claim some element of constructive eviction, but are rarely successful. While the facts of each case are unique, a claim of constructive eviction is most likely to be successful when the following factors are present:

1. A defect that renders the premises completely unusable for the purpose for which it was intended;
2. And one of the two following factors:
a. An inability or unwillingness of the landlord to cure the defect despite being given ample opportunity to do so; or
b. A defect that poses such an immediate hazard to the tenant that it would be impractical to afford the landlord any time to cure the defect.

Notice
New Jersey's Abandoned Property Act sets forth guidelines for landlords and tenants in handling the issue of Abandoned Belongings. Under the Act, before discarding any of the tenant's belongings, a landlord must provide a former tenant with 30 days written notice of the tenant's right to claim the belongings. The Notice should be sent via certified mail to the tenant's last known address, which is sometimes the address that the tenant just vacated. It is important to note that the landlord does not need to prove that the tenant actually received the Notice. Since the tenant has the option of having his mail forwarded, the law does not place the burden upon the landlord to try to figure out the tenant's new address.

Storage
After providing the tenant with notice of his or her right to claim any belongings, the landlord must not discard the belongings until after the 30 day notice period has lapsed. In some cases, landlords may choose to leave the belongings in the rented premises. In other cases, where leaving the belongings in the dwelling is not practical, the landlord may, at his discretion, transport the belongings to another location. If the landlord is charged a fee for storage, the landlord has the right to ask the tenant to pay that fee, provided it is reasonable.

Consequences of Failing to Comply
As much as the Abandoned Property Act protects tenants from having their belongings discarded, the Act also protects landlords from tenants who may try to make a claim for their belongings after the 30 day reclamation period has lapsed. Landlords who choose to not comply with this Act, and either fail to serve a Notice, or discard their tenants belongings in sooner than 30 days are taking a calculated risk that may backfire, if the tenant later decides to sue for the value of his discarded belongings.

Consequences of Orderly Removal
Under the New Jersey Court Rules, a tenant who is facing a lockout following an eviction action may apply to the Court for an extra week to remain in the premises and remove his belongings. This procedure is commonly known as an "Application for Orderly Removal." Under the law, a tenant who applies for and is awarded an Orderly Removal cannot assert a claim upon belongings left in the rented premises after he or she vacates. Accordingly, there is no requirement that the landlord give any advance notice to a tenant before disposing of his or her belongings in cases where the tenant has received an Orderly Removal.

Continue reading "New Jersey Landlords Must Abide by Abandoned Property Act" »

As the expenses associated with property ownership continue to escalate, many landlords have begun to pass their expenses onto their tenants through the use of rent increases. Since tenants very often cannot afford to pay the requested increases, New Jersey tenancy Courts are trying an alarming number of contested rent increase cases. In this week's article, we will discuss some of the guidelines that may be employed by a Judge in determining the fairness of a proposed rent increase.

What Constitutes an Unconscionable Rent Increase?
Under New Jersey law, the burden of proof is then upon the landlord to demonstrate that a proposed rent increase is not unconscionable. The question then becomes how to define the word "unconscionable." In the matter of Fromet Properties Inc. v. Buel, et. al., 294 N.J. Super 601 (App. Div. 1996), the Court set forth the following 5 factors in determining the unconscionability of a rent increase:

1. The amount of the proposed rent increase;
2. The landlord's expenses and profitability;
3. How the existing and proposed rents compare to rents charged in similar rental properties in the area;
4. The relative bargaining position of the parties
5. Based on the Judge's knowledge, whether the rent increase would shock the conscience of a reasonable person

The first factor, which looks at the amount of the proposed rent increase, is no longer given as much weight as it previously was, primarily because it would essentially force a landlord, who had given a "sweetheart deal" to a tenant in the past, to continue to subsidize the tenant into perpetuity. While it has been widely believed by many tenants that rent increases are limited to a certain percentage per year, the New Jersey legislature has not enacted any such statute. However, some municipalities do have rent control ordinances, and landlords owning property in those towns should familiarize themselves with the ordinances before sending any proposed rent increase notifications to their tenants.

With regard to the third criterion, which is given an overwhelming amount of deference at the rent increase trials I have been a part of, it is clear that the best evidence of comparable rents is other rents from within the same building or complex. The apartments within a complex tend to be similar in quality, amenities and certainly in location. But very often, the rent increase trial involves a stand alone unit such as a house, or an apartment over a store. In these cases, landlords should be prepared to present testimony of rents from comparable rental units within the same general geographic location. Sometimes, it may be cost effective to hire a real estate appraiser to prepare a market analysis and testify at trial.

In 2004, the New Jersey Legislature revised the Rent Security Deposit Act. Under the revised Act, there are three major components, which are very often misinterpreted by inexperienced landlords, tenants and their attorneys. In this week's article we will discuss and explain those provisions.

Initial Notification
The first component to the Act is initial notification. Within 30 days of being given a security deposit, the landlord must deposit the funds in an interest bearing account, containing no funds other than the tenant's security deposit, and the landlord must provide the tenant with written notice of the name of the bank, the rate of interest, the account number and the type of account. If the landlord fails to comply with any of these requirements within the specified time period, the tenant may apply his or her security deposit toward rent, with no further Notice or opportunity to cure to the landlord.

Annual Notification
Each year on the anniversary date of the lease, the landlord must send the tenant a reminder of the same information required in the initial notification. The landlord must also disburse any interest earned to the tenant. Under the annual notification requirement, there is no automatic forfeiture for non-compliance. Instead, the tenant must first provide the landlord with notice of the non-compliance. If the landlord still fails to provide the required notice or disbursement of interest within 30 days of the notice from the tenant, the security will be applied toward rent. Landlords should be forewarned under both of these provisions, that once the security deposit is applied toward rent, the landlord is not permitted to require the security deposit to be restored.

Disbursement upon move-out
Within 30 days of the tenant moving out, the landlord must either return the entire security deposit, along with any interest accrued to the tenant, or if there are any deductions, the landlord must provide the tenant with a written notification of why the appropriate portion has been withheld. In the event that a portion of the security deposit is wrongfully withheld, the tenant may bring suit against the landlord for double the portion of the deposit which was wrongfully withheld, plus any attorney fees.

Continue reading "New Jersey Rent Security Deposit Act: How it Affects Landlords and Tenants" »

One unique aspect of New Jersey tenancy law is the notion that a residential tenant is a "tenant for life" who cannot be evicted simply by letting the lease run out. In fact, even in cases where the residential lease states that the tenant must vacate on a certain date, such provision is considered void and unenforceable. Residential landlords are then faced with the problem of how to evict an undesirable tenant who is not in violation of the lease.

One method that has been commonly employed is the use of rent increases. But the law regarding rent increases requires that the landlord can prove that the increase being sought is "not unconscionable." Therefore, several landlords who wish to rid themselves of a tenant have begun to employ the "personal occupancy" provision of the Anti-Eviction Act. This provision, which allows the owner of a dwelling to evict a tenant upon two months written notice, is considered to be the only one of the 17 causes for eviction under the Act that does not require cause. In other words, in order to evict a tenant for personal occupancy, it is not necessary to demonstrate that the tenant did anything wrong. Landlords should note, however, that this particular cause for eviction is only available in dwellings with not more than 3 apartments. Therefore, an owner of an apartment building would not be able to evict one tenant on the ground that he or she wanted to occupy that unit.

Our office will not accept any matter where we suspect the landlord is attempting to use the "personal occupancy" provision in a fraudulent manner. However, as one may expect, this cause of action is subject to abuses by landlords who have no intention of occupying the home from which they have evicted a tenant. Accordingly, N.J.S.A. 2A:18-61.6 provides substantial penalties for wrongful eviction in cases where the landlord who evicted the tenant fails to occupy the premises for at least 6 months (or fails to execute contract of sale) and permits occupancy by another tenant. Due to the confusing wording of the Statute, many Judges mistakenly disregard the second requirement.

In one pair of matters I tried in Union County, I evicted two tenants out of a two family house, under the theory that the landlord wanted to occupy the entire house by herself. Of course, in order to convert the two family house into a single family dwelling, a lot of structural work was required. When 6 months had elapsed after the evictions, and my client still had not taken occupancy, the two tenants who had been evicted asserted claims for wrongful eviction against my client. Ultimately the question rested upon the interpretation of the Statute, which not only requires that the landlord fail to take occupancy, but also attempts to rent the dwelling to new tenants. After careful consideration of the Statute, as well as other factors involved in the case, the claims against my client were dismissed.