Whether you’re a real estate developer, owner and/or landlord of commercial, retail, industrial or residential property, you know compliance with state and municipal laws is key to operations. If you fail to comply with existing laws, you can suffer penalties, losses and setbacks. This maxim was recently illustrated for a landlord that had its eviction case die for failing to legally comply with New Jersey notice requirements to evict.
In the unpublished decision Cahn Estates v. Sanchez , 27-2-4190 (App. Div. 2014), a residential landlord had its judgment of possession reversed – effectively keeping a tenant that it evicted – because notice requirements were not strictly followed.
The case involved a 17-year tenant with a 20 pound, 10-year old dog that repeatedly used the hallway as its bathroom, barked at other tenants and lunged at a property manager. Although landlord served tenant a Notice to Terminate the tenancy after the tenant’s dog lunged at the landlord’s employee, landlord did not send a timely Notice to Cease, as required under the New Jersey Anti-Eviction Act (the “Act”), prior to sending the Notice to Terminate.
Landlord filed an eviction complaint, seeking judgment for possession as a result of threats against landlord representatives and a disorderly/destructive tenant. The trial judge found that the “threatening conduct” of tenant constituted both simple assault and terroristic threats. The Judge granted landlord a judgment for possession. Subsequently, landlord and tenant entered a consent order to allow tenant to stay until the end of the month, but presumably did not acknowledge the prior judgment of possession and/or waive any rights under the prior judgment. Once a warrant of removal was filed, tenant filed an Order to Show Cause to stay eviction.
Although the trial judge denied tenant’s Order to Show Cause, tenant appealed. Tenant claimed that under the Act, the trial court did not have jurisdiction to enter a judgment for possession because the landlord did not send a timely Notice to Cease, prior to the Notice to Terminate.
The Appellate Division agreed with the tenant, stayed eviction, reversed and vacated the judgment for possession. The Appellate Division held that the Act requires strict compliance, noting that the purpose of the Act was to protect tenants in the midst of a housing shortage and avoid hardship of rendering tenants homeless by a blameless eviction. Citing, Morristown Mem’l Hospital v Woken Mortg. & Realty Co., Inc., 192 N.J. 182 (App. Div. 1983).
The Appellate Division held the Act allows for a Notice to Terminate, without a Notice to Cease, if an offense includes “terroristic threats”. However, the Appellate Division held that the evidence did not support such a finding – basically, this little dog in no way could have “terrorized” anyone. Further, the Appellate Division held that the Notice to Terminate was not specific, since the Notice did not include the word “assault” as a ground for eviction. Thus, the landlord/tenant judge had no jurisdiction to even hear the eviction. In addition, the Appellate Division held that the subsequent consent order did not waive tenant’s right to contest the prior order and its validity.
In short, this decision illustrates not only the need to ensure compliance with New Jersey law when operating commercial, retail, industrial or residential property, but also the importance of trying to avoid issues, whether at the pre- or post-litigation stage.
Some interesting questions that you should ask your real estate counsel include:
- Prior to litigation, are your notices correct? For instance, if you are sending a Notice to Terminate, rather than a Notice to Cease first, do you have all appropriate language that addresses specific offense?
- Are there other alternatives that can be sought without cost to landlord? For instance, in this matter landlord may have been able to contact the police or animal control if it believed there were public safety issues.
- If you’re resolving an issue at or before trial, does your standard consent order contain a waiver of tenants’ rights to appeal?
- Does your consent order provide a warranties and representations clause that the tenant has read and understood the agreement?
Evaluating your legal issues and addressing them correctly, requires careful review on an individual basis. Further, it is vital to have counsel familiar with these issues for your commercial, retail, industrial and/or residential property needs.