Articles Tagged with Nonpayment

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.

A question often posed by New Jersey landlord is: “When should I file a nonpayment of rent case? After how many months?” Answering this question requires balancing the propriety of litigation relative to the amounts involved. Unscrupulous landlords may be tempted to “sit” on the rent for many months, allowing the tenant to accrue a balance that the tenant has no realistic chance of paying. In a case like this, the landlord relies on the tenant’s poor money management skills and hopes that the tenant cannot pay the all of the rent due on the court date. But, landlord-tenant law is too sophisticated for this game; the affirmative defense of “laches” may defeat the landlord’s claim.
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A NJ commercial landlord-tenant relationship can be challenging to manage. A commercial landlord must balance the benefit of having a rent paying tenant in a space that can be difficult to rent with the realities of the tenant’s behavior. In 2014, the Firm confronted this scenario: Pursue an eviction matter far enough to convince a commercial tenant to change his behavior while preserving the landlord-tenant relationship and rent payments to the Landlord.
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Many New Jersey landlords require that tenants pay extra money for certain “extra” rights. For example, a landlord may require a pet fee in exchange for the right to keep a pet on the property. Some landlords charge tenants “finder’s fees” for the right to rent an apartment (even though no real estate brokers are involved). Tenants often bristle at paying these extra fees, especially when a lease is renewed. This raises the question: Can a tenant be evicted for failure to pay additional fees?
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Landlords Beware: Residential Form Leases Do Not Cure All Ills

The word “lease” is a fancy term for a simple agreement: The tenant agrees to pay rent and the landlord agrees to provide a habitable living space. Some leases are lengthy and contain conflicting terms which affect both the landlord’s and the tenant’s rights. In a landlord-tenant case, the court will look at the content of a lease very closely. This is where Google causes more problems than it solves. Free form leases from the internet can be dangerous.

Form residential leases are all over the internet for free. Like most things, if it’s free its too good to be true. For landlords, a free form lease can cost money further down the line. This is especially true if the case goes to landlord-tenant court.

Form leases, by nature, are generic; generic leases can work in as many states as possible. Form leases do not apply relevant New Jersey law and some provisions that protect landlord may be void and inapplicable. Even form leases claiming to be customized for New Jersey may not meet for formal requirements set forth in the law.
The common problems with form leases often relate to two issues: 1) attorney’s fees in connection to litigation and 2) late fees. For example, most form leases have the following attorney’s fee clause:
ATTORNEY’S FEES: In the event that any action is filed in relation to this Lease, the unsuccessful party in the action will pay to the successful party, in addition to all the sums that either party may be called on the pay a reasonable sum for the successful party’s attorney’s fees.
The paragraph seems to say that if landlord sues a tenant, or vice versa, the losing party would pay the attorney’s fees of the winning party. Remember, court hearings for evictions, are considered “legal actions.” Contrary to the plain meaning of the attorney’s fee clause, absent very specific language, attorney’s fee clauses are unenforceable.
Many form leases have following late fee clause:
LATE CHARGE: A late fee of $________ shall be added and due for any payment of rent made after the _______ day of the month.
Even if the clause meets the formal requirements of New Jersey law, a late fee clause may be deemed unenforceable by a court if the late fee is found to be “unreasonable.” Be sure to take care when filling the blanks of the late charge clause on a form lease.
Landlords should take care by having their leases reviewed by an attorney. 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 Jersey (Jersey City, Hoboken, Bayonne, Hudson County, Newark, Essex County, Woodbridge, Middlesex County, Paterson, Passaic County). The Firm invites you to visit the “Promises” page for our new way of doing business Continue Reading ›

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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New Jersey is one of only four states that provide for rent control. Jersey City is one of 98 municipalities that enacted local rent-control laws. While Hoboken and Bayonne recently relaxed their rent-control ordinances, Jersey City maintains one of the State’s strongest rent-control laws. Jersey City tenants should aware of the most important part of Jersey City’s rent-control laws.
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Part 1 of this series described the rights and responsibilities of landlords and tenants under the warranty of habitability. Marini explains that a landlord implicitly promises to provide an apartment free of latent defects and maintained in a livable condition. While tenants have a right to a regularly maintained defect free apartment, they also have an obligation to inform the landlords of any problems and allow sufficient time for those problems to be fixed. In most cases, the repairs are made and both parties are happy. If the problems continue, tenants have a number of options to consider.
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Generally, most NJ landlord-tenant matters settle before trial. A prior post explained the range of options available to tenants and landlords before “taking your chances with a judge.” While settlement is usually the best route, sometimes a trial is unavoidable. Whether the trial is for nonpayment or other “good cause” under the Anti-Eviction Act, N.J.S.A 2A:18-61.1., the landlord has the burden of proving his case. New Jersey Court Rule 4:37-2(b) requires that a landlord show that the facts and the law entitle him to relief (in a landlord-tenant setting, the relief is a judgment for possession). Practically, this means that the defendant-tenant, before telling the court his side of the story, can ask the court to dismiss the landlord’s case. The type of eviction case determines what the landlord must show to avoid dismissal.
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