Articles Tagged with Eviction

Local rent control laws are commonplace in New Jersey’s largest cities. Newark and Jersey City (New Jersey’s most populous cities) both maintain comprehensive rent control laws. The basics of these laws are well known. Rent control ordinances control the rent a landlord can charge and restrict the size of future rent increases. But, basic rent and rent increases are not the only financial obligations of tenancy. Many leases define late fees, attorney’s fees and other costs as “additional rent” to be collected from the tenant in an eviction action. Can these fees be collected from tenants in rent-controlled cities? Under Opex Realty Mgmt., LLC v. Taylor, (Law.Div.2019) the answer is: “No.” After Opex Realty (approved for publication on August 13, 2019), landlord and property managers of rent controlled properties should exercise care in drafting leases and initiating nonpayment evictions.

Opex Realty addressed a common-place but unresolved question. Does a rent control ordinance’s definition of “rent” necessarily preclude the collection of “additional rent” defined costs in a lease, when the collection of those costs exceeds the maximum rent under rent control? Prior to Opex Realty, tenants generally relied on Ivy Hill Park Apts. v. Sidisin, 258 N.J.Super. 19 (App.Div.1992). In Sidisin, the Appellate Division held that a landlord could not evict a tenant for “additional rent” (defined in a lease) when the same costs were not defined as “rent” under a rent control. The Opex decision arrives at the same conclusion of Sidisin, but with a different rationale.

Judge Petrillo’s Opex holding is that additional rent cannot be collected in a nonpayment eviction because the combination of additional rent and base rent exceeds the maximum allowable rent under rent control. Judge Petrillo held: “The court will not allow the landlord to circumvent rent control…and raise the rent beyond the lawful limits by labeling a late fee or legal fee as ‘additional rent…’” Emphasis added. The Opex decision is not that additional rent cannot be collected from rent controlled tenants. Rather, the decision is that additional rent cannot be collected when so doing exceeds the maximum legal rent. This is why, in dicta, Judge Petrillo added: “Were these tenants not already bearing the maximum rent allowed by law, the outcome might have been different.” A future post will address the practical implications of Opex and whether collecting “additional rent” is ever possible under rent control.

The Anti-Eviction Act, N.J.S.A. 2A:18-61.1(c) allows a New Jersey landlord to evict a tenant for “destruction, damage or injury to the [rental] premises” (Section 61.1(c)). Section 61.1(c) requires that a landlord prove two elements. The first can be described as the “mental state” of the tenant. The second is resultant harm from that mental state. The full text of Section 61.1(c) shows this. An eviction under Section 61.1(c) is permissible when: “The [tenant] has willfully or by reason of gross negligence caused or allowed destruction, damage or injury to the premises.” The threshold inquiry is how the damage occurred, whether it occurred willfully or by gross negligence. Proving this element at trial is a difficult task.
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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.
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The NJ Anti-Eviction Act provides the least amount of protection for a tenant causing damage to the landlord’s property. For most grounds for eviction (habitual late payment, violation of lease rules, increase in rent, etc.) the Anti-Eviction Act requires either a Notice to Cease and/or a one month Notice to Quit prior to filing the Complaint. In a damage case, the tenant is entitled to only three days of notice before the landlord files the Complaint. The short time frame is counterbalanced by the landlord’s burden. In an eviction for damage case, the landlord must prove both the cause and effect. Without both, the landlord’s case will fail.
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New Jersey residential tenancies exist in two forms. Those with a written lease and those without. Written leases are more desirable for the simple (and obvious reason) that the terms of the tenancy are defined. Oral tenancies generally lack defined terms (unless implied from conduct). This vagueness is problematic. Whether a landlord purchases a building with an existing oral tenancy or creates one, the problems remain the same. The central question is: How does one define the terms of an oral tenancy?
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Late payment of rent is one of the more common landlord complaints. Late-paying tenants interfere with their landlord’s bottom line and create an atmosphere of disrespect toward the landlord’s investment. The NJ Anti-Eviction Act allows a Landlord to evict a tenant for “habitual late payment of rent” when the tenant “after written notice to cease, has habitually and without legal justification failed to pay rent which is due and owing.” N.J.S.A. 2A:18-61.1(j). Although the law seems clear, it’s easy to say a tenant pays rent habitually late; evicting for late payments is more difficult proposition.
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New Jersey landlord-tenant actions (a/k/a “summary dispossession actions”) are designed to be quick, efficient methods of disposing of landlord-tenant disputes. The efficiency of a landlord-tenant case lies in the prohibition of responsive pleadings and the “No Discovery” rule. NJ Court Rule 6:4-3 provides that interrogatories and other discovery methods are applicable in all actions except “summary landlord and tenant actions for recovery of the premises.” The “No Discovery” rule poses a problem for landlords alleging wrongful conduct (for example, damage to the apartment or violation of lease rules) by the tenant. How does a landlord prove wrongful conduct? How does a tenant defend against an allegation of wrongful conduct?
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New Jersey tenants are protected by the Anti-Eviction Act (NJSA 2A:18-61.1) and the Consumer Fraud Act (NJSA 56:8-1 et. seq.). Pursuant to Anti-Eviction Act, tenants living in illegal apartments are entitled a statutory relocation benefit of six times the monthly rent (NJSA 2A:18-61.1(g)(2) & NJSA 2A:18-61.1h). On the Consumer Fraud Act side, consumers are protected from unconscionable commercial practices which cause the consumer to suffer an “ascertainable loss.” Violations of the Consumer Fraud Act can trigger a consumer’s right to triple damages; an enhancing remedy in line with the relocation benefit. In the context of illegal apartments, can the Consumer Fraud Act and Anti-Eviction Act combine to give tenants two equally powerful remedies? The answer turns on how the damage to the tenant is characterized.
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The dynamics of dealing with a NJ illegal apartment can be tricky. In general, an illegal occupancy is one that violates the local zoning or building code laws. For example, in Jersey City many illegal apartments are an additional third rental unit in a two family zone. When a landlord seeks to evict a tenant from this illegal occupancy, the landlord must pay six times the monthly rent to the tenant. Usually, the relocation benefit comes up in the context of an eviction for nonpayment. When the tenant finds out his/her apartment is illegal, the first step is to stop paying the rent. By this time the landlord is cited by zoning or building code enforcement for maintaining the illegal occupancy. When the tenant stops paying the rent, the landlord files an eviction for nonpayment case. Once everyone shows up in court, what happens next?
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Rent-control ordinances across New Jersey control the legal rent a landlord is entitled to from each rental unit. Most rent-control ordinances provide landlords an opportunity to raise the rent between tenants. As noted in a prior post, Jersey City’s rent-control ordinance does not provide for such “vacancy decontrol.” The absence of vacancy decontrol raises interesting questions in the context of eviction for nonpayment proceedings. To what extent must a landlord show compliance with rent control when alleging a tenant failed to pay rent “due and owing?” If the Landlord can’t show compliance with rent control should the complaint be dismissed? These questions came up in a case in Hudson County a short time ago. The outcome has important implications for tenants and landlords across New Jersey.
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