For a variety of reasons, New Jersey landlords prefer to have their buildings owned and rented collected by a separate business entity. These entities can be corporations, limited liability companies or limited liability partnerships. While the tax and liability treatments of these entities may be ideal, there is a subtle complication when forced to appear in court.
When a landlord business entity is a plaintiff or a defendant in a civil action in New Jersey, NJ Rule of Court 1:21-1 applies. R. 1:21-1(c) “Prohibition on Entities” states that an “entity, however formed and for whatever purpose, other than a sole proprietorship shall neither appear nor file any paper in any action in any court of this State except through an attorney authorized to practice in this State.” Many landlord-entities miss this simple rule: If a business entity other than a sole proprietor is the landlord, you must have an attorney.
Since landlord-tenant court is designed to be a relatively quick and simple proceeding, many landlords believe that can simply appear, tell the judge what happened and be awarded the relief they seek. An eviction action is a summary action for possession. So, that belief is undercut by NJ Rule of Court 6:10 “Representation in Summary Actions for Possession of Premises.” “The prohibition of appearances and filing of court papers by business entities other than sole proprietors, contained in R. 1:21-1(c), shall apply to summary actions for possession of premises, except that a partner in a general partnership may file papers and appear pro se.”
The consequences of failing to appear with an attorney are serious. If the business entity is the plaintiff in the action, the court will treat the appearance without an attorney as a failure to appear and dismiss the case. Following the dismissal, the business entity will have to bear the time and cost of refiling the case. If the business entity is a defendant, the appearance without an attorney will be treated as a default. The default can lead directly to an entry of judgement against the business. A default judgment creates the difficult situation of trying to vacate the default. Vacating a default judgment is more costly and time consuming than appearing correctly in the first place.
Since the facts of each circumstance differ, a landlord or tenant should consult an attorney with his/her specific circumstances. Offit Kurman practices landlord-tenant law throughout New York and New Jersey assisting landlords and tenants in avoiding unnecessary and costly delays. The firm’s geographic practice area includes: New York City (Manhattan, New York County, Brooklyn, Kings County, Queens, Queens County, Bronx County) and New Jersey (Jersey City, Hoboken, Bayonne, Hudson County, Newark, Essex County, Woodbridge, Middlesex County). The Firm invites you to visit the “Promises” page for our new way of doing business. Contact us today for a guaranteed free initial consultation