Articles Tagged with Eviction

On March 27, 2020, President Trump signed the COVID-19/Coronavirus Rescue bill or “CARES Act” into law.  The CARES Act has important implications for borrower/landlords of properties identified as “Covered Properties.” In short,  CARES Act “Covered Properties” are subject to specific eviction restrictions lasting until the end of July 2020. These restrictions are identified in Sections 4022 through 4024 of CARES.

“Covered Properties” are:  (1) properties that participate in a federal housing program or (2)  properties that have a “federally backed mortgage  loan” or “federally backed multi-family mortgage loan”.  The below table identifies the types of covered properties. The bolded terms are more common federal programs or “backed” loans.

Federal Housing Program

Federally Backed Mortgage Loan/Multi-Family Loan

•              Public housing (42 U.S.C. § 1437d)

•              Section 8 Housing Choice Voucher program (42 U.S.C. § 1437f)

•              Section 8 project-based housing (42 U.S.C. § 1437f)

•              Section 202 housing for the elderly (12 U.S.C. § 1701q)3

•              Section 811 housing for people with disabilities (42 U.S.C. § 8013)

•              Section 236 multifamily rental housing (12 U.S.C. § 1715z–1)

•              Section 221(d)(3) Below Market Interest Rate (BMIR) housing (12 U.S.C. § 17151(d))

•              HOME (42 U.S.C. § 12741 et seq.)

•              Housing Opportunities for Persons with AIDS (HOPWA) (42 U.S.C. § 12901, et seq.)

•              McKinney-Vento Act homelessness programs (42 U.S.C. § 11360, et seq.)

•              Section 515 Rural Rental Housing (42 U.S.C. § 1485)

•              Sections 514 and 516 Farm Labor Housing (42 U.S.C. §§ 1484, 1486)

•              Section 533 Housing Preservation Grants (42 U.S.C. § 1490m)

•              Section 538 multifamily rental housing (42 U.S.C. § 1490p-2)

•              Low-Income Housing Tax Credit (LIHTC) (26 U.S.C. § 42)

•              The Rural Housing Voucher Program (42 USC § 1490r)

• Federally Backed Mortgage Loan, 1-4 Family purchased or securitized by Fannie/Freddie (Note: Fannie and Freddie purchase the overwhelming majority of 1-4 family mortgages on the secondary market)

 

• Federally Backed Mortgage Loan, 5+ family  purchased or securitized by Fannie/Freddie

 

• Federally Backed Mortgage Loan or Multi-Family Loan insured, guaranteed, supplemented, or assisted in any way by the Federal Government.

 

 

 

For 120 days, measured from March 27, 2020 (in other words until July 25, 2020), landlords of covered properties cannot:

  1. Initiate/file any non-payment of rent proceedings against Tenants in covered properties;
  2. Charge/collect late fees from tenants.

This federal law preempts any state law or executive action which may have permitted the filing of non-payment cases but stayed the execution of a judgment for possession. Where New Jersey Governor Murphy’s EO106 permitted the filing of a nonpayment case, the CARES Act does not. The CARES Act specifically prohibits “any filing” or “initat[ion] of legal action to recover possession.

In short, if you are a landlord of a “Covered Property” you cannot initiate a nonpayment of rent case against a tenant, nor can you collect late fees for unpaid rent, during the time period March 27, 2020 to July 25, 2020.

If you a landlord of a property which does not meet the definition of a “Covered Property” (in its entirety) but you have tenants who receive Section 8 voucher assistance, those tenants who receive the voucher are protected by the eviction moratorium–even if other tenants are not.

Offit Kurman, P.A., maintains a broad-based landlord and property owner representation practice. In New Jersey, Offit Kurman represents landlords and property managers in maximizing return, resolving disputes and avoiding unnecessary and costly delays. The Firm’s New Jersey geographic practice area includes: Jersey City, Hoboken, Bayonne, Hudson County, Newark, Essex County, Woodbridge, Middlesex County, Paterson, Passaic County, Hackensack, Bergen County and other points across New Jersey.

Major changes are coming to the multi-family property industry today. Governor Phil Murphy is set to sign Assembly Bill A3859. This bill prohibits lockouts during a Governor-declared State of Emergency. Once signed into law, multi-family properties owners can expect the Governor Murphy to immediately impose a lockout moratorium. It is important the landlords and tenants understand what A3859 prohibits and what it does not.

1. Eviction Actions Can Be Still Initiated: A3859 does not prevent landlords from filing eviction actions. Instead, it stays the enforcement of a judgment of possession (no lockout) until the State of Emergency lapses. Technically, A3859 requires that the Governor issue an order triggering the moratorium—but this is a near certainty.

2. The Moratorium is Not Indefinite: A3859 allows the Court to proceed with a lockout “in the interest of justice.” While this term is not defined, we can expect that eviction cases for causes other than nonpayment (damage to apartment, assault on landlord–to name two) may be enforced in the “interest of justice.” Non-payment of rent cases are the most likely to be affected. The overwhelming majority of these cases will not proceed to lockout during the State of Emergency. Unless some exceptional circumstances are present (for example, a large pre-Coronavirus panic balance; a property on the brink of insolvency and similar exceptional consequences), landlords and tenants should expect that any pending or to-be-initiated nonpayment case, will be subject to the moratorium.

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.
Continue Reading ›

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.
Continue Reading ›

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.
Continue Reading ›

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?
Continue Reading ›

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.
Continue Reading ›

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?
Continue Reading ›

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.
Continue Reading ›

Contact Information