New Jersey Real Estate Attorney Blog

Our office previously reported on New Jersey's Safe Housing Act, a 2008 statute that allows victims of domestic violence to terminate their residential leases on 30 days notice to the landlord. Since the time we published that article, we received an overwhelming amount of comments, and the general consensus has been that the inconvenience that the Act has caused to some landlords has been substantially outweighed by the public purpose served by the Act.

While the Safe Housing Act affords protection to tenants, we were recently informed of an ordinance that actually penalizes tenants for reporting incidents of domestic violence. Under Section 245-3 of the Norristown, Pennsylvania municipal code, residents who rent their homes were only allowed a maximum of two calls to the police for each four-month period. In the event that a third call was placed to the police during that period, the landlord's license to rent that property would be revoked. As a result of that revocation, the town would then be forced to evict the tenants. While the town stated that the intention of the act was to minimize disorderly conduct, the legislation has resulted in domestic violence victims either losing their homes, or alternatively, being hindered from making a report out of concern for the possible repercussion.

The matter of Briggs v. Norristown (2013) , concerned a challenge to a law, which the Defendant, municipality, had enforced an ordinance against the Plaintiff, renter and her landlord by revoking the landlord's rental license and subsequently attempting to remove Plaintiff and her infant daughter from their home, based solely on the fact that the police were called upon one too many times to protect her and her daughter from incidents of domestic violence. Following a discussion with the Plaintiff's attorney regarding the constitutionality of the ordinance, the Defendant municipality rescinded the ordinance. However, shortly thereafter, the Defendant municipality enacted another ordinance, which was similar to the old ordinance, except that it placed most of the penalties upon the landlord, rather than upon the tenant.

The Plaintiff challenged the new ordinance based upon numerous constitutional grounds. While this matter has not yet reached a trial date, we were surprised to learn that the Norristown ordinance is not unique, and in fact, other towns around the country have implemented similar ordinances. Our office will continue to keep you updated as this matter continues to develop.

On October 29, 2012, Hurricane Sandy brought storm surges in excess of 9 feet. This was bad news for Ocean County, in which 29 of 33 municipalities border the ocean. Our office previously reported on statutory relief available to owners of properties that sustained damage during the hurricane. While the 2013 relief will be limited to loss of value to structures and not loss of value to land, we are surprised by the number of taxpayers in Ocean County whose assessments still do not accurately reflect the diminution of value sustained by the properties.

Some of the more severely affected towns in Ocean County have conducted revaluations or re-assessments this year in order to re-examine the properties and fairly determine their new true values. The towns of Plumsted, Stafford, Manchester, Seaside Heights, Pine Beach, Point Pleasant Beach and Toms River have all been designated for re-assessments this year. While the filing deadline for New Jersey tax appeals is generally April 1, towns in which a revaluation or re-assessment has taken place are usually assigned a tax appeal filing deadline of May 1. All of the aforementioned towns will observe a May 1 filing deadline, except for Point Pleasant Beach and Toms River, in which the deadline has been extended to June 1.

The municipal-wide revaluations of storm affected towns presents two major logistical problems. First, for towns in which all or most properties (line items) have been substantially affected, the lowering of all assessments will provide little relief to taxpayers, who will most likely be forced to begin paying a higher tax rate in order to ensure that the municipal budgets are maintained, without the need for bonding. Second, for towns in which only a few line items were affected, the lowering of assessments of the coastal properties will result in a higher tax rate for all residents, especially the residents of the lower priced inland properties. Very often, these are the residents who can least afford to pay a higher tax rate.

According to one estimate, at least 13,000 storm damaged Ocean County properties will have their assessed value reduced by a total of $4.6 billion. In order to avoid the inevitable result of a higher tax rate for all New Jersey residents, towns have begun seeking State and Federal relief to make up the budget shortfalls. However, if your property has been affected by Hurricane Sandy, and your assessment was not sufficiently reduced to account for the amount of damage sustained, please contact our office for a consultation. We will accept new Toms River and Point Pleasant Beach appeals until May 16. For the remainder of re-assessed towns, we will accept new appeals until April 19.

For the past several years, our office has been reporting on various topics relating to the New Jersey Eviction process. The topics have included habitability hearings, Section 8 subsidies, rent increases, and notices to tenants. Absent from these discussions has been an explanation as to how the New Jersey eviction process works. In anticipation of our March 20 Seminar in Parsippany, we started working on a discussion as to how the eviction process works.

The Eviction Complaint
New Jersey eviction actions are commenced when the Landlord files his or her complaint with the Court in the county in which the property is located. The Court generally requires that the landlord file an original and 3 copies of the Complaint, although additional copies are required in instances where there are multiple defendants. For a single Defendant, the filing fee is $25 plus an additional fee, called "mileage." The mileage fee is determined based upon the distance of the property from the Court. Landlords must also pay an additional $2 for each additional Defendant on the Complaint. Within a few weeks of receiving the Complaint, the Court mails a copy to the Defendant, and simultaneously serves the Defendant by hand-delivering a copy of the Complaint to the tenant's door. Trial is generally scheduled about 4 weeks from the date of filing. Some counties may take longer, depending on volume.

The Summary Proceeding
Landlord Tenant actions are Summary Proceedings. The Defendant does not file an Answer to the Complaint. Instead, the Defendant can raise any defenses on the day of trial. There are no Counterclaims or Crossclaims and there is no requirement that the parties exchange any discovery prior to trial. There are also no Jury Trials in Landlord Tenant Court.

7 Rules for Non-Payment Cases
1. In the event that the tenant pays the balance owed prior to the day of Court, the case shall be dismissed.
2. In the event that the tenant is unable to pay the balance owed by the day of Court, the landlord shall be entitled to a Judgment for Possession.
3. Most cases are mediated; however, should the matter proceed to trial, the Judge has no authority to make the landlord wait for rent or force the landlord to take the rent in installments.
4. Acceptance of a portion of the rent prior to the day of Court does not affect the status of the matter. It simply lowers the amount that the tenant would still have to pay.
5. In the event that the Landlord accepts any rent (regardless of how little) after the Judgment for Possession has been entered, the case shall be dismissed, unless the parties have a written agreement and a copy is filed with the Court.
6. Landlord Tenant Judgments are Judgments for Possession only. A landlord will only get money in Landlord Tenant Court if the tenant is willing to pay it in order to stay in the premises (or in some vacate agreements as well). The Tenancy Judge cannot compel or order the tenant to pay money. He or she can only instruct that if the rents are not paid, the tenant will be locked out. If the Landlord wants to sue the tenant to collect the unpaid rent, this must be done in a separate proceeding.
7. No "Res Judicata" - The outcome of a landlord tenant action will not necessarily affect how the Court would rule in a subsequent action (i.e.; an action for collection). Similarly, the amounts agreed to on a settlement agreement do not create a Judgment even if the tenant does not pay the amount agreed upon.

Warrants of Removal
The form for requesting a Warrant of Removal varies greatly by county. In all cases, Warrant cannot be issued for at lease 3 business days after the Judgment for Possession and in all residential cases, the lockout may not occur until 3 business days after the Warrant has been issued.

Post Judgment Relief
Following the issuance of a Warrant of Removal, the tenant may still go back to Court to ask for relief. Generally, the relief will take one of three forms as follows:
First, the tenant may apply to the Court to have Judgment set aside based upon fraud or good cause. These applications are rare, but if the application is successful, the matter will generally be dismissed and the tenant will be entitled to remain in the premises. Second, the tenant may make an application for Orderly Removal, based upon Court Rule 6:6-6(b), allowing the tenant an additional week to vacate. The Orderly Removal is the most common application, because it requires no payment on the part of the tenant; however, at the conclusion of the 1 week time period, the tenant must vacate the premises. Finally, the tenant may make an application for Hardship Stay. However, the Tenant must pay all rent due and owing and stay may not exceed 6 months. It is important to note that this application can be made up to 10 days after the lockout has occurred!

For more information on enrolling in this Seminar, please visit the Sterling Education Website at http://www.sterlingeducation.com/

The Law Office of Michael D. Mirne, through its continued affiliation with Sterling Education Services is proud to announce that we will once again be presenting a Seminar on the exciting subject of Landlord Tenant Law. This year's seminar, which is the ninth annual program, will be conducted on March 20 at the Courtyard by Marriott in Parsippany, New Jersey. Our colleague, Christopher Costa, from the firm of Hartsough, Kenny, Chase, and Sullivan will be leading off the day with a discussion regarding the selection and screening of tenants, leasing, security deposits, public housing agreements, abandoned property and everything else that a landlord needs to know to run a successful business.

Following Mr. Costa's presentation, I will be transitioning the discussion from the landlord tenant relationship to a discussion on dissolving that relationship through the eviction process. I will be speaking specifically on the topics of the Anti-Eviction Act, service of legal notices to tenants, rent increases, habitability defenses, personal occupancy by landlord, illegal lockouts, settlement agreements and filing procedures. I will also be speaking about strategies for eviction trials and a few new topics.
The day's topics will be concluded by presentations by Terri Jane Freedman and Katharine Muscalino of the firm of Porzio, Bromberg and Newman, who will discuss the practical implications of a tenant who files for bankruptcy and pursuing collection actions against tenants, as well ethical issues. These discussions will provide vital information for landlords whose tenants vacate their dwellings without paying their rent.

The program is recommended for landlords, real estate professionals, property managers, caseworkers, and attorneys. For New Jersey attorneys seeking CLE credits, please be advised that this course has been approved for 8.0 credit hours (1.2 will be counted toward ethics/professionalism).

For information on enrolling in this seminar, please visit the Sterling Education Website at www.sterlingeducation.com or call their office at 715-855-0498.

For the past several years, our office has been reporting on various aspects of New Jersey Landlord Tenant Law. We have noted that the New Jersey eviction process is a generally fast and simple procedure that allows landlords to evict tenants in as little as four to six weeks. There are no Counterclaims allowed by the Defendant (Tenant) and there is no requirement that the parties exchange any discovery prior to trial.

While landlords and property owners generally appreciate the efficient manner in which Landlord Tenant Court reaches and disposes of housing related disputes, some property owners simply may not qualify to proceed in that Court. The most important characteristic shared by all parties in Landlord Tenant Court is that there is some type of "Landlord-Tenant relationship." In all cases, one party must be under either a lease or an obligation to pay the other party rent. In some cases, however, that relationship simply does not exist. In those cases, the property owner must proceed under an action known as an "ejectment." Ejectment actions almost always take longer to adjudicate than tenancy actions, and require substantially more paperwork on the part of the parties. From our office's experience, the most common scenarios in which an ejectment may occur are the removal of a former owner from a house following a foreclosure, and removal of a family member from a house that was supposed to have been used for a temporary time period. While the scope of landlord tenant actions has been expanded to include employees who receive housing in exchange for employment, the matter of Vasquez v. Glassboro Service Association, Et. Al., 83 N.J. 86 (1980) set forth that migrant farm workers did not qualify as employees and therefore, an ejectment action needed to be filed in order to remove them from farm housing.

In one recent matter our office handled, our client's parents had deeded him their house in exchange for an interest in a gas station that he owned. After the property was deeded to our client, he decided to move in, only to find that his sister had been living in that house without his consent, and without paying him any compensation. Our office filed an ejectment complaint with the Superior Court. Ultimately, our client's parents agreed to deed him a different house, rather than removing their daughter from the house that she had been living in. If your property has an unauthorized occupant residing in it, please contact our office for a free initial consultation.

Throughout the year, this office has published a series of articles about real estate tax assessments. We have discussed how assessments are calculated, and how assessments can be appealed when they are too high. We have also discussed the fact that most real estate assessments in New Jersey do not exceed the actual value of the properties, and for many taxpayers, the high taxes they are paying is simply a function of a high real estate tax rate, which cannot be appealed. For our final article of this year, we will discuss some reasons why your tax rate may be as large as it is, and some ways that the local governments can (but probably will not) lower them.

The free market system, driven by the traditional principle of supply and demand, not only controls the prices of the products we buy, but also dictates the price that we pay for labor. We certainly would not continue to give raises, for example, to an undeserving employee, especially when many qualified applicants were waiting to take that person's job. Recently, much attention has been brought to the paradigm, which awards teachers for seniority, rather than academic achievement. Perhaps one of the greatest casualties of the expensive union contracts for public school teachers is that it comes at the expense of the school system's ability to hire additional necessary teachers, in the absence of substantial increases to the municipal budget.

According to recent data, the average cost to the taxpayers was $17,469 per child for the 2010-2011 school year. In Asbury Park, the cost per student for that same time frame was $29,819! We compared that figure to the prices for the 50 most expensive private schools in the nation. There was not much difference in the prices. In Newark, where the annual cost to the taxpayers for each school child now exceeds $25,000, hard working parents are forced to pay exorbitant taxes, as their children continue to receive subpar educations. Governor Christy has agonized over the inequality of treatment between children, based solely upon where they live. While private schools continue to be far less expensive, and in many cases, have higher academic standards than their public counterparts, there is still no tax credit for New Jersey parents that wish to send their send their children to private schools.

In 2002, the United States Supreme Court visited the issue of whether a school voucher program would, in some cases, be unconstitutional. The matter of Zelman v. Simmons-Harris, 536 U.S. 639 (2002) dealt specifically with the issue of whether the Establishment Clause of the Constitution would prohibit school vouchers on the basis that they are often used to fund a religious education. In writing for the majority, Chief Justice Renquist looked at several other cases in which the limits of Establishment Clause were analyzed. Justice Renquist remarked that "a program [which] was one of true private choice, with no evidence that the State deliberately skewed incentives toward religious schools, was sufficient for the program to survive scrutiny under the Establishment Clause." There was little doubt that the majority of private schools had a religious affiliation. Nevertheless, the intangible aid derived from those religious institutions was not sufficient to derail the voucher programs.

In New Jersey, over half of the real estate tax funds collected is used to fund the public school systems. Therefore, a voucher payment of even half of the aforementioned $17,000 that it costs to publicly educate a child for one year would result in excess of a 25% reduction of all real estate tax bills. It would also be enough to pay the entire tuition at many private schools, and increase educational opportunities for those who choose to remain at the public schools. Unfortunately, until vouchers are offered, New Jersey taxpayers can look forward to paying the largest real estate taxes in the nation. Of course, if your taxes are high because you are over-assessed, you can still call our office to handle your appeal.

Nearly every resident in the State of New Jersey has been affected by Hurricane Sandy. In little more than 24 hours between the dates of October 29 and October 30, New Jersey residents experienced massive flooding and storm related damage from the hurricane. In the aftermath of Sandy and the considerable destruction it caused, many affected property owners have been left wondering if there will be any property tax relief available.

Historically, N.J.S.A. 54:4-35 has established that the assessed value of all New Jersey real estate must be determined as of October 1 of the pre-tax year. For example, the assessed value of a person's property in 2013 must be based upon what the property was worth as of October 1, 2012. For this reason, a taxpayer who files an appeal should present evidence of sales of comparable properties that sold on or before October 1. However, for practical reasons, County Tax Board commissioners and Tax Court Judges will routinely allow evidence of sales that may have closed a month or two after the October 1 assessing date.

The question then becomes whether there is any legal basis for reducing assessments for damage from a storm that occurred 4 weeks after the assessing date. A similar situation had occurred in March of 1962 when many homes were severely damaged as a result of a coastal storm. At that time, there was no law reducing taxes for those damaged properties.

In 1945, N.J.S.A. 54:4-35.1 was enacted to allow for reductions in assessments of properties that suffered substantial destruction after October 1, but before January 1. The statute specifically enumerates fire, storm, cyclone, and tornado as examples of casualties that would be covered. Taxpayers seeking a reduction in assessment should be aware that N.J.S.A. 54:4-35.1 requires that they take the necessary action to properly notify the assessor. If your property was affected by hurricane Sandy, you must file the appropriate certification with the Tax Assessor of your municipality no later than January 10, 2013.

Finally, it is important to note that N.J.S.A 54:35-1 only applies to the value of structures (improvements) and does not apply to the value of land. It is a safe bet to assume that properties in communities that were completely destroyed will suffer substantial losses in value purely due to market conditions in those communities. However, these losses will not be a basis for adjustment under the Statute. Therefore, for some property owners, it is unlikely that the reduction in taxes they receive will be commensurate will the actual diminution in value.

Since Monmouth and Ocean County, where most of our office's tax appeals are filed, were also the most harshly affected areas from the hurricane, we encourage any property owner who has suffered a catastrophic loss to his or her property to immediately contact our office for a free initial consultation.

Our office previously reported on techniques that landlords sometimes employ to combat the onerous restrictions imposed by New Jersey's concept of the "life tenant." However, during the past several months since we wrote that article, we are still receiving an alarming number of questions from landlords about their ability to terminate a residential tenancy simply because the lease is expired. Accordingly, we are now going to elaborate on the concept of the "life tenant" in greater detail.

The overwhelming majority of residential tenants are protected by New Jersey's Anti-Eviction Act. N.J.S.A. 2A:18-61.1 Et. Seq. Specifically excepted from the restrictions of the Anti-Eviction Act are some seasonal tenants and certain tenants of owner occupied houses. All other tenants enjoy the comfort of knowing that they cannot ever be evicted except for good cause.

The Anti-Eviction Act then goes on to discuss the various causes under which a residential tenant can be evicted. Depending on how you count them, you should find about 17 different allowable reasons for evicting the residential tenant. The reasons include the following:

a. non-payment of rent
b. disorderly activity
c. willful or grossly negligent destruction
d. breach of landlord's rules
e. breach of lease covenants
f. failure to pay rent increase
g. dwelling deemed uninhabitable (relocation assistance must be paid)
h. permanent retirement of rental
i. failure to accept lease change
j. habitual failure to pay rent
k. condo conversion
l. personal occupancy (by owner or purchaser)
m. termination of employment (where tenancy is conditioned upon employment with landlord)
n. drug offenses
o. assault or terroristic threats
p. assault or terroristic threats or drug violations proven in civil hearing
q. theft of property

Most importantly, we note that the reasons for evicting a residential tenant do not include expiration of the lease. The law simply provides that, in the event that a residential lease expires, the tenant reserves the right to remain in the premises as a month-to-month tenant. Even in cases in which there never was a written lease, the tenant remains protected by the Anti-Eviction Act and is automatically deemed a month-to-month tenant.

The law further states that any lease clause telling the tenant that he or she must vacate by a certain date is void and unenforceable. In light of this rule, landlords with winter and summer rentals need to be especially careful on drafting their leases to ensure that their winter tenants do not "hold over" into the more expensive summer period.

Finally, we have observed situations in which a residential tenant sends a letter to the landlord, advising the landlord of the tenant's intention to vacate by a certain date. Very often, the landlord even relies on that statement and procures a new renter. The law states that even under these circumstances, the failure of the tenant to move on the date set forth by the tenant does not create a cause for eviction. See Chapman Mobile Homes v. Huston, 226 N.J. Super 505 (Law Div. 1988)

In light of these factors, New Jersey landlords need to be especially cognizant of the rights of the residential tenants and implement the proper safeguards to minimize their risks. Each new tenant is a potential adversary in a later action. Landlords are cautioned to be diligent in screening new tenants and preparing proper leases.

We are frequently asked questions regarding the necessity of the appraiser at the tax appeal hearing. For owners of more moderately priced properties, the decision is not an easy one to make. Very often, taxpayers conclude that the cost of an appraisal may exceed the savings that will be derived from the tax appeal. For the first time, this year, several dozen taxpayers asked us to file their appeals without appraisals.

The disadvantages of failing to obtain an appraisal are twofold. Primarily, we will focus on the role of the appraisal during the tax appeal hearing. At the hearing, the taxpayer has the burden of proving that the assessment is too high, while the municipality, on the other hand, is afforded the presumption of correctness. Put simply, the municipality does not need to prove anything. Consequently, for hearings at the county level, the municipality generally does not produce a full appraisal, but rather a list of comparable sales that will be relied upon. In some cases, the municipality will not produce any proof at all in support of its assessment and simply argue that the taxpayer has not satisfied his burden to prove that assessment wrong. Absent a well-prepared appraisal and expert testimony, it is nearly impossible for the taxpayer to satisfy his or her burden of proof.

To illustrate how this works, we will look at the matter of Greenblatt v. Englewood City. We previously reported on the case with regard to the use of "unusable sales." In Greenblatt, the Court also visited the issue of whose duty it was to put forth credible evidence. The Court, in that matter, remarked that neither the taxpayer, nor the municipality had put forth any good evidence. However, since the taxpayer was the party bearing the burden of proof and the municipality was the party that was afforded the presumption of correctness, the Court ultimately ruled that, in a matter where neither side had put forward a good case, the Court must rule in favor of the municipality.

A secondary benefit of the appraisal is adding leverage in negotiating a settlement. Most of the assessors we have spoken with have told us that they will not offer a settlement to a taxpayer who has not first offered an appraisal. The rationale for this is routed in the presumption of correctness that would be afforded to the assessor in the event that the matter were to proceed to trial.

We are continuously surprised by the number of taxpayers who show up to their hearings without appraisals. While monetary concerns drive these decisions, it is extremely rare that a taxpayer without an appraisal receives any reduction in assessment. We therefore recommend that all taxpayers use appraisers to help win their tax appeals. The Law Office of Michael D. Mirne, L.L.C. owes most of its success to the quality appraisers we have used in our residential and commercial tax appeal assignments. Should you have any questions, please feel free to contact us.

We are frequently asked questions from clients regarding the Tax Appeal filing deadline. Generally, the filing deadline for all real estate tax appeals is April 1, although the deadline is routinely extended by a month in during revaluation years. In one such matter, our firm successfully argued to the Tax Court that while the taxpayer missed the filing deadline, the delay in filing was excusable due to the fact that the taxpayer was not afforded proper notice of the change in his assessment. However, cases in which the filing deadline is waived are extremely rare and taxpayers must take special care to ensure that the April 1 filing deadline is not missed.

In the matter of Shin v. Borough of Norwood (App. Div. 2012), the appellants were property owners who had attempted to file their 2010 tax appeals with the Bergen County Board of Taxation on the April 1, 2010 filing deadline. The problem was that the attorney for the taxpayers had retained the services of a courier service, who apparently did not understand the urgency of the filing deadline. The courier showed up to the Bergen County Board of Taxation on April 1, but after the Board's 4:30 closing time. The courier then re-attempted service on April 2. The filing was rejected as a "late filing."

The Taxpayer then appealed to Tax Court, claiming that the filings should have been accepted. The municipality filed, and was granted a Motion to Dismiss, based upon the relevant law that states that all filings must be received by April 1. The taxpayer subsequently appealed the Tax Court's decision. In affirming the Tax Court's decision to dismiss the Taxpayer's appeal, the Appellate Division remarked that the County Boards of Taxation have authority to set their own hours and that they were simply following their usual procedure and closing at 4:30 P.M. There was no bad faith or malfeasance on the part of the County Tax Board and it was the Taxpayer's obligation to ensure that the application was filed by April 1, prior to the Board's closing time.

Under N..J.S.A. 54:3-21 as well as New Jersey Court Rule 8:1-1, appeals must be filed by April 1. The deadline is extended to May 1 in revaluation years. In light of the strict filing deadlines our office will not accept any new Tax Appeal matters after March 23. For a free initial consultation, please contact our office.

The prohibition against double jeopardy, which precludes a person from being tried twice for the same crime, has an equivalent in the civil courts. The concept of Res Judicata stands for the principle that a person cannot be sued twice for the same dispute. However, similar to the prohibition against double jeopardy, Res Judicata is not without exceptions. One such exception involves actions in New Jersey's Landlord Tenant Courts. The Landlord Tenant Courts in New Jersey are Courts of extremely limited jurisdiction. More specifically, the only issue that can be resolved in a proceeding in Landlord Tenant Court is whether or not the tenant is to be evicted. All other issues must be adjudicated separately in different venues. This duality has led to multiple Court decisions limiting the bar against subsequent actions, even in cases where both actions are adjudicated in Landlord Tenant Court.

Generally, the Courts have ruled that a landlord tenant proceeding will not bar subsequent actions involving the same parties in cases where the relief sought is different than the original action. However, in light of this fact, we were left uncertain as to how the Court would rule in a case where a landlord brought a nearly identical action twice against the same tenant. We recently had an opportunity to test the limits of Res Judicata in landlord tenant actions.

The facts of the matter were quite simple. The allegation was that the tenant had caused purposeful or grossly negligent destruction to the rented premises. To support this claim, the landlord produced a long list of damages she claimed the tenant or his guest had caused. Under the law, evictions for grossly negligent destruction to a residential dwelling can be filed upon 3 day's advance notice to the tenant. In the past, our firm has been successful at evicting several tenants under this cause. The problem in the pending case, however, was that the landlord had already unsuccessfully tried this matter with a previous attorney. The landlord then came to our firm to see if she could obtain a different result.

We started our action by changing the premise upon which the eviction was sought. While the original action had argued simply that the tenant had damaged the premises, our action argued that the tenant violated the written lease by failing to pay for the damages. Under New Jersey's eviction law, a residential tenant can also be evicted for violations of the landlord's rules and regulations; however, the requisite Notice periods required for this cause are quite onerous.

The Defendant's attorney argued that our action was really a disguised version of the original action. I argued that the cause of action was substantially different and that Res Judicata should not apply in either case. After a few hours of arguments, the Court recessed for lunch, while the parties continued to discuss possible settlement options. Unfortunately, the matter eventually settled, and we were left with no indication as to how the Court would rule upon such an issue.

Continue reading "New Jersey Evictions: An Exception to Res Judicata" »

According to a recent report in Newark's Star Ledger, the average rent for a New Jersey 2- bedroom apartment is $1302 per month.* However, for thousands of landlords who are not being paid their rent on time, the statistic translates to more than $40 per day of lost rental income. In many cases, having a few tenants who are not paying rent results in a major financial loss for landlords.

In 1947, in an effort to lend efficiency to the eviction process, the State of New Jersey created a "Summary Proceeding" to handle eviction actions. Although, the process has undergone several statutory and regulatory changes since then, the concept of allowing New Jersey landlords a method to quickly remove tenants has remained unchanged. Today, landlords can typically expect that an eviction action will be scheduled for trial about 1 month from the date of filing, and that a tenant can be removed within about 2 weeks from the day a Warrant of Removal is ordered.

The Summary Proceeding is much faster than a typical ejectment action, thus preventing landlords from losing valuable time in replacing a non-paying tenant. There is, however, an inherent limitation in the Summary Proceeding. Because tenants are sometimes served with a copy of the Tenancy Summons as little as ten days before trial, requests for Discovery and the filing of Counterclaims are not permitted. While the tenant may assert a claim against the landlord on the day of Court that would constitute an equitable defense to the underlying claim for eviction, tenants in an eviction proceeding may not assert any Counterclaims for damages against the landlord. Therefore, tenants who wish to bring a claim against the landlord will often need to either have the tenancy matter transferred are file a separate action against the landlord in another division of the Court.

Notwithstanding the Court's limitation on the filing of a claim against a landlord in an eviction proceeding, some litigants have been curious to see what the Courts will do in light of the Hodges v. Feinstein decision of just a few years ago. In Hodges v. Feinstein, 383 N.J. Super. 596 (2006), the Court ruled that landlords and attorneys who file eviction actions are considered Debt Collectors under the Federal Fair Debt Collections Practices Act, and are therefore liable for sanctions under New Jersey's Consumer Fraud Act in the event of a false or misleading eviction filing. The question then becomes whether the sanctions could be collectible in Landlord Tenant Court. The answer appears to be in the negative.

The matter of King Plaza Residential v. Sanchez (App. Div. 2012) involved a tenant who sought attorney's fees and damages against a landlord who had filed four separate eviction complaints against him. After the fourth eviction complaint was dismissed, the tenant filed four separate motions seeking attorney's fees and sanctions against the Plaintiff. The Court in that matter ruled that in order for the tenant to proceed on her claim for damages against the landlord, she must first either have the matter transferred to law division (or presumably Special Civil Part if the claim is under $15,000) or file a separate action for damages in that forum. In so ruling, the Court relied on the principle that the Tenancy Court does not permit a tenant to assert a claim for damages against a landlord.

* Sarah Portlock, N.J. has fourth highest rents nationwide, study finds, March 14, 2012

For more than 80 years, Fort Monmouth had been a vital component of Monmouth County's economic base. It had provided thousands of residents with jobs and housing, and has provided indirect benefits to thousands of businesses, including those in the retail sector. In April of 2005, the Pentagon recommended that Fort Monmouth be permanently closed. During the years that followed, some of the Fort Monmouth jobs were relocated to other bases within the State of New Jersey, others were relocated out of state, and some jobs were phased out of existence. On September 15, 2011, the Fort Monmouth Army Base was retired.

The sudden loss of jobs has resulted in a downturn in the economy throughout Monmouth County. Some of the towns that bordered or neighbored Fort Monmouth have felt the most serious impact. In particular, Eatontown, Oceanport, Tinton Falls, Shrewsbury and West Long Branch have seen major downturns in their housing markets. As with all deflationary markets, some of the diminution in value is directly attributable to the loss of demand and some of the deflation is attributable to a distorted the supply and demand quotient created by a surplus of sellers and a deficiency of buyers amidst concerns that the area will not make a speedy recovery.

The unfortunate result is that some towns, like Shrewsbury and West Long Branch, are now assessed at more than 100% of value. Other over-assessed towns in Monmouth County include Brielle, Englishtown, Farmingdale, Loch Arbour, and Red Bank. While assessors strive to create assessment models that will minimize their coefficients of deviation, it is an inevitability of basic arithmetic that a ratio of greater than 100% must yield several line items that are over-assessed. During the course of the past 5 years, during the downturn of the real estate market, towns have raced against time to perform re-assessments or revaluations to avoid this problem. Not coincidentally, during this same time period, our firm has enjoyed great success at reducing the assessments for several hundred taxpayers in towns whose assessments have not kept pace with the deflation of the market.

If you have a question about tax appeals, please call our office. Please also remember that in most cases, the deadline to file your Tax Appeal is April 1.

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.