Most 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.