Articles Posted in Landlord Tenant

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justice_srb_2In last month’s blog, our office presented Part One of our discussion on our recommendations to an arbitration board with regard a commercial landlord tenant matter, in which the tenant withheld rent in due to alleged habitability defects.   In this month’s blog, we continue our discussion of our analysis of that matter.

In most cases, the Court is loath to construe the Tenant’s good faith actions to enforce a contract as a default of the contract.   Like most default provisions found in commercial leases, the default in the lease in this matter was not curable. Therefore, in the event that the Tribunal were to declare a default in this matter, it is clear that the Tenant would not only forfeit the tenancy, but would also forfeit the benefit from the substantial investment he made in preparing the premises for the current use. Under the matter of Mandia v. Applegate, 310 N.J. Super 435, 447 (App. Div. 1998), “[l]anguage which may defeat an estate must be strictly construed and always against… a forfeiture.” In the matter of Vineland Shopping Center, Inc. v. DeMarco, 35 N.J. 459, 465 (1961), the Court held that “[i]n a proper case, equity will relieve a Tenant from forfeiture of a lease by reason of non-payment of money where performance has been made.

In the pendent matter, the Tenant defaulted in the lease by failing to pay rent. While the Tenant probably had other mechanisms of compelling the Landlord to make the requested repairs, the Tenant in this matter did not have a lot of good alternatives. Notwithstanding the clear statement contained in the written lease, we were required to determine whether it would be equitable for us to terminate the tenancy of someone who was only trying to compel the Landlord to make repairs that the Landlord was responsible to make. In the matter of Urdang v. Muse, 114 N.J. Super 372 (Cty. Dist. Ct. 1971), the Court held that “the Court may under its equitable powers, as enunciated in Vineland Shopping Center, relieve against forfeiture. This it may do despite the fact that defaults have taken place … The essence of the power to relieve against forfeiture is that equity may intervene to mitigate the inequitable consequences of a breach.”

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Our firm was recently retained to provide an amicus brief to an Arbitration Board, for purposes of helping the arbitrator to resolve a commercial landlord tenant dispute, in which the Tenant had stopped paying rent, ostensibly due to habitability defects, affecting both the leased premises and the common area. The Landlord responded by declaring a default in the commercial justice_srb_2lease and promptly sought eviction based on that default. The questions before the arbitrator were the following:

  1. Who bears responsibility for curing habitability defects to the roof and the common area?
  2. Does the Tenant’s failure to pay rent constitute a Default that would result in termination of the tenancy?
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Our office has previously reported on the subject of removing property that had been abandoned by a tenant. The general procedure, in those instances, requires a landlord to not only obtain a judgment for possession against the tenant, but to also provide the tenant with 30 days advance notice of his or her right to claim those belongs. In the event that the tenant’s belongings are not claimed within that period of time, the landlord may dispose of the tenant’s belongings. This procedure, however, does not apply to abandoned motor vehicles. In today’s article, we will briefly discuss the landlord’s procedure for removal of motor vehicles, which have been presumably abandoned by tenants.

In some instances, where the police are willing to intercede, the landlord can request that the abandoned vehicle be “ticketed” by the police, and then towed by a towing company. The owner of the vehicle will then be responsible for towing and storage fees, and may be subject to additional penalties, including loss of license. See Senate Bill 1173.

In cases where the police are not willing to intercede, the landlord should first apply to New Jersey Motor Vehicle Service to have the vehicle declared abandoned. Motor Vehicle Services will require that the landlord complete the following documents in order to complete this process:

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NickelNearly 200,000 landlord tenant disputes are filed each year in New Jersey Landlord Tenant Courts. The majority of Landlord Tenant matters are filed by attorneys on behalf of landlords. Some landlords would rather not appear at Court for a trial, and they will request that their attorneys enter into settlement agreements on their behalf in the event that the tenants show up. This ordinarily does not present a problem for the landlord’s attorney, as long as the landlord’s ledger of the amounts due is accurate, and as long as the amounts of rent sought in the complaint mirror the information from the ledger. However, there are many cases where the landlord’s ledger is not accurate and mediating these matters to arrive at a settlement is therefore quite difficult. In order to resolve these types of matters, we have developed the following paradigm.

 
Arrive at the Amount Due

Before an eviction matter can be settled, the parties must first arrive at the amount due. While in most cases, the tenant agrees with the amount set forth on the complaint, we do see a lot of cases where the tenant simply does not agree with the ledger and further discussion is required. When these disputes arise, we recommend starting the mediation by just discussing rents. Other items like legal fees, late charges and utility fees can be conversation killers, especially in cases where the tenant thinks the balance is paid in full and does not understand why an action was filed. Therefore, any discussion regarding these “additional rent” charges are best saved for the end of the conversation, after the tenant already agrees with the amount of rent that is owed.

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padlocked-1453108In our two most recent articles, we discussed two ways in which tenants can delay or stop an eviction from taking place. We discussed applications to set aside verdicts due to fraud or other good cause. We also discussed applications for Hardship Stays, to allow the tenant additional time to move out, provided that the tenant can post all of the rent that is due and owing and stay current on the rent obligations during the Hardship Stay. For the reasons discussed in those articles, both of those applications are seldom granted. In a case where the tenant’s application is not granted, the Court may still consider whether the tenant is eligible for an Order for Orderly Removal, granting the tenant a few extra days to remain in the premises.

In this month’s article, we will discuss the application for Orderly Removal. Pursuant to New Jersey Court Rule 6:6-6(b), the tenant facing a lockout can apply to the Court for an extra seven days to remain in the premises without the payment of any money.

The Hearing

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In last month’s article, we discussed applications filed by tenants to have Judgments for Possession set aside. This month, we will discuss one other type of post-judgment applications that tenants may make in order to delay their lockouts. Specifically, in this article, we will discuss Hardship Stays.

On the day of Landlord Tenant Court, some cases are settled, and some cases result in the immediate entry of a Judgment for Possession, very often due to the non-appearance of the tenant. Following the entry of a Judgment for Possession, whether it is by way of a default, or a breach of a settlement agreement, the landlord may order a Warrant of Removal.   Sometimes, following the Judgment for Possession, the tenant will attempt to pay the Landlord the rent that is due. However, after the Court date (or after the date that a settlement agreement is breached), the Landlord is under no obligation to accept the rent.   The Landlord has the right to proceed with a Warrant of Removal and a lockout. When this occurs, if the tenant has the rent that is due and owing, the tenant may post that rent with the Court, pursuant to N.J.S.A. 2A:42-10.1 or N.J.S.A. 2A:42-10.6 and request a Hardship Stay. In cases where the past due rent is posted with the Court and a Hardship Stay is deemed appropriate, the Judge will issue an order delaying the lockout and compelling the parties to appear in Court for a “return date,” during which the parties can argue about the duration of the Hardship Stay.

The Hardship Stay can last for a maximum duration of six months. However, the Court will not necessarily grant a full 6-month Hardship Stay all at once. In most instances, the Court will grant a Hardship Stay for a shorter period of time and afford the tenant the opportunity to come back to Court at a later date if additional time is needed for the tenant to find alternate housing. In all Hardship Stay matters, the tenant must continue to stay current with rent throughout the entire duration of the Hardship Stay. In the event the tenant fails to pay rent during any month of the Hardship Stay, the Landlord may request that the Hardship Stay be immediately set aside and that the Warrant of Removal be executed.

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For the past 15 years, our office has been reporting on issues regarding New Jersey Landlord Tenant law. In today’s article, we will discuss the application for an Order to set aside the Judgment for Possession based on fraud or other good cause, pursuant to New Jersey Court Rule 4:50-1. These applications are generally made during the 3-business day “window” between the posting of the Warrant of Removal and the Execution of the Warrant of Removal (i.e.; the lockout). Tenants making these applications will allege a variety of perceived issues, which are generally not valid reasons for setting aside a verdict.

One common attempted defense is the tenant’s statement that he or she was never served with the Complaint. However, since a copy of the Complaint is served to the tenant via regular mail and another copy of the complaint is served to the tenant via hand-delivery to the dwelling, and the Special Civil Part Officer signs an affidavit, stating that he served the tenant, the argument that the tenant was not served is generally not credible, and are summarily dismissed by the Judge hearing the application.

Sometimes the tenant will state that he or she was in the hospital on the day of the Landlord Tenant Court date (a surprisingly common occurrence with tenants facing eviction). Provided that the tenant can show proper documentation of the hospitalization, the Court will be satisfied that there was excusable neglect in the tenant failing to appear in Court. However, a thorough Judge will then also attempt to determine whether there is a meritorious defense to the claim (i.e.; does the tenant still owe rent?). After all, it is not enough for the tenant to merely prove that he or she was unavailable on the day of Court. The tenant must prove that as of the day of Court, there really was no valid claim that should have existed.

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gavelMost American businesses keep track of their charges and receivables using a “first in, first out” method. The central principle of this method, referred to as “FIFO,” is to apply customers’ payments toward their earliest balances first, and then toward their later balances. New Jersey landlords had also accepted the FIFO method of accounting until relatively recently, when the State Supreme Court ordered that eviction complaints follow a specific format, in which tenants’ unpaid charges are specifically set forth in detail.

Using the FIFO method, for example, if a tenant failed to pay rent January and February, the next payments that the tenant did remit would be applied to January and February. That application would certainly create a gap in later months in which the payments were made. In the event that the eviction complaint followed the same methodology, it might appear that the tenant owed rents from March and April (or whatever the most recent months were), when the two missed payments were really from January and February. This method is unfortunately confusing for tenants who may show up to Court with receipts to prove that they paid certain rents, only to find that the receipts that they produced do not refer to the missing payments in question.

Prior to the institution of the revised eviction complaint format, we had found that the best method of proving the balance owed in a trial involves going back to the ledger to determine the last date when the balance owed was $0.00. Then the landlord should add up all the rents that became charged since that date (i.e.; the monthly rent multiplied by number of months). Then the landlord should add up all the receipts that were paid during that same time period, and subtract that number from the amount of rents charged to determine how much was still owed.

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Several months ago, we discussed the Abandoned Property Act. Under N.J.S.A. 2A:18-72, et. seq., a landlord cannot dispose of a tenant’s property until the following two conditions occur:

  1. The Landlord must have regained possession from the tenant, either by way of eviction action, or by way of other conclusive proof that the tenant has voluntarily surrendered possession of the premises (e.g.; the tenant turned in the keys or indicated in writing that he or she has surrendered possession); and
  2. The landlord shall also serve the tenant with a written notice, advising the tenant that he or she must claim all belongings in the apartment within 33 days, or they will be presumed to be abandoned, and may be disposed of.
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Keys.jpgFor the last 12 years, our firm has been writing articles about the eviction process. We have discussed pre-suit notices, habitability hearings, security deposit defenses, and a variety of other topics, focused on the eviction process. However, we have never provided any articles regarding Warrants of Removal. The Warrant of Removal is generally the last stage in the eviction process. While post-judgment applications sometimes add an extra step to the process, it is important for landlords to have a full and complete understanding of the Warrant of Removal process, in order to minimize the risk of unnecessarily delaying the lockout of a tenant of even causing the involuntary dismissal of an eviction.

Following nearly all eviction matters that are based on nonpayment of rent, we will leave the Courthouse with either a settlement that the landlord has agreed upon, or a default against the tenant. The defaults can be the result of a tenant not showing up to court to contest the eviction, or in some cases, they can be the result of the tenant showing up, but without the enough funds to persuade the landlord to enter into a settlement agreement. Since the Court cannot make the landlord wait for rents or force the landlord to accept the rent in installments, the Court will change the marking for these cases from “Ready” to “Voluntary Default,” or “Judgment by Consent.”

Whether the Default is the result of the tenant not showing up, or the result of the tenant showing up with no money, a Judgment for Possession will enter. Barring the very unlikely possibility that of the tenant posting the full amount due with the Court later on the day set for the hearing, the Landlord should immediately apply for a Warrant of Removal.

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