On January 17, 2014, Gov. Christie signed into law Assembly Bill 3851, requiring landlords of residential property to include additional language in new residential leases after February 1, 2014. The new law recognizes an implied covenant of collection of attorneys’ fees and costs for a tenant, if the lease allows the same for the landlord.
If the landlord's lease provides that the residential landlord collect attorneys’ fees or expenses, then the lease shall also provide that the tenant be awarded attorneys fees and costs, if it successfully defends the action. Specifically, the new law requires that all new residential leases, as of February 1, 2014 must contain the following capitalized bold typeface and a one point size larger than the rest of the lease (minimum 11 point font).
IF THE TENANT IS SUCCESSFUL IN ANY ACTION OR SUMMARY PROCEEDING ARISING OUT OF THIS LEASE, THE TENANT SHALL RECOVER ATTORNEY’S FEES OR EXPENSES, OR BOTH FROM THE LANDLORD TO THE SAME EXTENT THE LANDLORD IS ENTITLED TO RECOVER ATTORNEY’S FEES OR EXPENSES, OR BOTH AS PROVIDED IN THIS LEASE.
The law specifically prohibits collection of attorneys’ fees from a tenant who pays all rent due and owing prior to entry of final judgment, but that the court finds has presented no meritorious defense to the complaint other than payment. As such, a tenant must successfully defend the action to qualify for award of attorneys’ fees and costs. Additionally, the law provides that if an award is made in favor of the tenant, that award of attorneys’ fees and expenses is limited to actual expenses, such as court costs and expenses for witnesses. Excluded are personal expenses such as travel costs, missed work reimbursement and/or child care expenses.
If you are a residential landlord and have a lease that is coming up for renewal, this may be a good time to have your residential lease reviewed to ensure compliance. Failure to ensure this provision is added to your lease could endanger your ability to collect your own attorneys’ fees on your next residential eviction action. For reviewing your residential lease, feel free to contact Stark & Stark's Commercial and Industrial Real Estate Group.