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Be Careful What You Settle For: The Enforceability of Landlord-Tenant Settlements in Light of NJSA 2A:18-61.2

A New Jersey residential eviction action can only begin because the Landlord has “good cause” under the Anti-Eviction Act, N.J.S.A. 2A:18-61.1. Often, when a landlord pursues a tenant’s eviction there are many problems with the tenancy. For example, the tenant may fail to pay late fees and also pay habitually late. A tenant may disturb the peace and quiet of the other tenants and also refuse to sign a written lease. When the case finally comes to court, it is natural to try to resolve all outstanding issues. A recent appellate division opinion cautions: Be careful what you settle for, it may not be enforceable.

Landlord tenant cases are generally settled by consent judgment. In the eyes of the law, a consent judgment is a settlement agreement “of the parties under the sanction of the court as to what the decision shall be.” Cmty Realty Mgmt v. Harris, 155 N.J. 212, 226 (1998), quoting Stonehurst at Freehold, Inc., v. Twp. Comm. Of Freehold, 139 N.J. Super. 311, 313 (Law. Div. 1976). A landlord and tenant are free to settle under whatever circumstances they choose. In fact, courts encourage settlement agreements along the “notion that the parties to a dispute are in the best position to determine how to resolve a contested matter in a way which is least disadvantageous to everyone. Jennings v. Reed, 381 N.J. Super. 217, 226-227 (App. Div. 2005). But, when compared to the strict requirements of the Anti-Eviction Act, the judicial preference for settlement may be forced aside.
In Montano Props., LLC v. Abdeljawad, the tenant signed a consent judgment that stated he would sign a lease after it was translated into his language and reviewed with the landlord’s attorney. The tenant chose not to sign the lease. The landlord pursued the tenant’s eviction on the basis that he failed to sign the lease or communicate his objections to it, as required by the consent judgment. The trial court concluded that the “Consent to Enter Judgment essentially functioned as the equivalent of a Notice to Quit and that the landlord was thus entitled to possession.”
The Appellate Division reviewed the Consent Judgment and concluded that although the tenant agreed to sign the lease in the Consent Judgment he could not be evicted for his failure to do so. In addition to flaws in the agreement, the Appellate Division did not find that the “Consent to Enter Judgment sufficed to meet the Act’s procedural requirements in lieu of service of a Notice to Quit. N.J.S.A. 2A:18-61.2. The procedures of the statute normally should be strictly followed, and we discern no reason to excuse deviation from them here.”
In light of this decision, landlord should be cautious when entering into a “global” settlement. It appears that the law will not allow a tenant to waive the protections of 61.2, even when that waiver is implicit in the agreement. Although the Montano Props., LLC v. Abdeljawad Consent Judgment was flawed for other reasons, even the imprimatur of the court will not disturb the Anti-Eviction Act.
Negotiating a landlord-tenant settlement is fact-sensitive undertaking that requires meticulous details. It is not something that should be pursued lightly. The Major Law Firm LLC practices landlord tenant law throughout New Jersey assisting landlords and tenants in resolving disputes and avoiding unnecessary and costly delays. The firm’s geographic practice area includes: New Jersey (Jersey City, Hoboken, Bayonne, Hudson County, Newark, Essex County, Woodbridge, Middlesex County, Paterson, Passaic County, Bergen County). The Firm invites you to visit the “Promises” page for our new way of doing business.