More and more commercial landlords in New Jersey are proceeding with eviction actions for unpaid rents with larger tenants. Case in point was the recent article in The Star-Ledger on Tuesday, June 26, 2012 entitled, IDT Landlord Threatens Eviction Over Unpaid Rent. The article noted that IDT, one of Newark’s larger employers was recently served with an eviction action for more than $470,000 in rental arrears.
Counsel for the landlord was quoted as saying his client “…told me to throw the bums out.” Additionally, even if IDT becomes current, the landlord wants IDT out of the building as they have already leased to a new tenant two of the floors currently occupied by IDT.
The eviction shows the recent strengthening of commercial landlord positions in the slow, yet improving economy. Over the last four year, many commercial landlords have faced one of the worst economies since the great Depression, leading a number of landlords to hold off from filing eviction complaints. However, the slow, but ever increasing improvements in the economy are giving commercial landlords more opportunities to exercise their legal rights to get delinquent tenants back on track or evicted from the space.
In New Jersey, the county Landlord Tenant Court holds limited jurisdiction to evict a tenant for monetary defaults via a summary dispossession action. To obtain an order for possession and allow a warrant for removal to be issued, the landlord must prove that rent is: 1) due; 2) unpaid; and 3) owing. See, Levine v. Seidel, 128 N.J. Super 225, 229 (App. Div. 1974).
Interestingly, although the Tenant Anti-Eviction Act forbids landlords from evicting residential tenants who bring a landlord current the day of the actual hearing, there is no application of the Act to commercial landlords. Yet, various New Jersey Court cases discuss commercial landlord rights to evict a commercial tenant for:
- habitual late payment
- if the lease provides a contract right for the same
- where other defaults are at issue
Whether IDT stays or is evicted is yet to be seen. But what is known is that more and more commercial landlords are flexing their litigation muscles and enforcing their rights to payment through the landlord tenant courts.
If you are a commercial landlord, now may be the time to start flexing your litigation muscles on delinquent tenants. However, before you do, a review of all issues is critical to ensure that you are proceeding with the most efficient and effective efforts.
Thomas Onder is a Shareholder in Stark & Stark’s Bankruptcy & Creditor’s Rights Group. For questions, or additional information, please contact Mr. Onder.