Attention Landlords: Another Quirk In New Jersey Landlord-Tenant Law That You Are Not Going To Like

by: Peter J. Gallagher (LinkedIn)

For the uninitiated landlord, New Jersey landlord-tenant court can be a bit of a shock. The deck seems insurmountably stacked in the tenant’s favor. And when a landlord acquires its property via foreclosure, the process is even more confusing. A recent trial court decision, UTS Bechman, LLC v. Woodard, is a good example of how confusing, and sometimes counter intuitive, landlord-tenant court can seem to a landlord.

In Bechman, tenant and her husband were involved in a contentious divorce. During and after the divorce, tenant leased the underlying property, which had been the marital home but was then in foreclosure, from her husband. The property was eventually sold at sheriff’s sale and plaintiff took title to the property. When it acquired the property, plaintiff posted a notice on the door identifying itself as the new owner and providing an address where rent should be paid.

Over the next four months, plaintiff never received rent from tenant, so it sued, seeking to evict her from the property. Seems simple enough, right? Nope.

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This Is The Landlord-Tenant Equivalent Of Accusing Your Spouse Of Stealing The Covers

by:  Peter J. Gallagher (@pjsgallagher) (LinkedIn)

Cold (pd)And, incidentally, it ends the same way. (At least the same way it always ends for me.) No. You are wrong. Your spouse did not steal the covers.

In Loiacano v. Salemne, defendants stopped paying rent to their landlord. The landlord sued to evict them for non-payment. Defendants responded by requesting a "Marini hearing." In New Jersey, tenants are almost never allowed to withhold rent from their landlords. But, in Marini v. Ireland, the New Jersey Supreme Court recognized an exception to this rule. If a landlord refuses to make repairs that are necessary to keep the property habitable, then the tenant can make the repairs and withhold an amount from their monthly rent that is equal to the costs of the repairs. If a tenant does this and is then sued for non-payment, the court conducts a "Marini hearing" to determine whether the tenant was justified in doing so. 

What made Loiacano unique was that defendants were not claiming that the landlord did anything wrong or failed to make any repairs. Instead, they claimed that they withheld "two months' rent on the basis that their downstairs neighbor was manipulating the heat in their apartment." It wasn't even the downstairs neighbor herself who was allegedly doing this. Instead, it was her boyfriend, "identified only as 'Ray.'" Defendants, who had a "contentious relationship" with Ray, alleged that he would "manipulate[] the heat [in the first-floor apartment] so that there would be no heat in defendants' second floor apartment." 

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“[Saint] Cecelia You’re Breaking My Heart” (By Not Paying My Commission)

by:  Peter J. Gallagher (@pjsgallagher) (LinkedIn)

House + money (pd)If you are a realtor and you enter into an exclusive agreement to find tenants for your client's property, but then your client enters into a rent-free lease with a tenant, do you still get a commission? The answer, at least according to the Appellate Division in Century 21-Main Street Realty, Inc. v. St. Cecelia's Church, is no. 

In Century 21, plaintiff entered into an exclusive listing agreement with defendant, a church, under which  plaintiff would list an "inactive school building," which the church owned, for either sale or lease. Under the agreement, plaintiff was entitled to a commission equal to 6% of the sales price, if the property was sold, or one month of rent, if the property was leased. During the term of the agreement, the church entered into a lease with the local school board, which allowed the board to use the building "rent free" for the first 26 months. It also contained two, six-month "hold over terms." If the board continued to occupy the building during either or both of these terms, it would have to pay the church $900,000 per term. The lease also required the board to repave the parking lot, and allowed, but did not require, the board to make any repairs or renovations to the building that it saw fit, at the board's expense.

Two months after the church signed the lease, plaintiff demanded a commission based on the "asserted costs" of the repairs the board intended to make to the building. It asserted that it was entitled to a commission equal to "two month's rent due based on rental, repair evaluation." Apparently, plaintiff assumed the repairs would costs $1.5 million, divided that amount by the 26-month term of the lease to come up with the per-month cost of the repairs, and then claimed that it was entitled to two month's payment as its commission. The church refused to pay any commission and plaintiff sued. 

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Let Sleeping Dogs Lie . . . Just Not In A Hallway Where They Might Create A Dangerous Condition?

by:  Peter J. Gallagher (@pjsgallagher) (LinkedIn)

Sleeping dog (pd)When is a sleeping dog a dangerous condition? This is the burning question that the Appellate Division answered in Parella v. Compeau.

In Parella, plaintiff attended Christmas dinner at a friend's house along with approximately 20 other guests. After the second course, she got up from her chair to put her dish in the kitchen sink and check on her child who was in an another room. To do so, she had to walk behind several seated guests. She did not have to ask anyone to move until she got to the last guest in the row. That guest moved her chair in and plaintiff made a move familiar to anyone who has been to a crowded holiday dinner — she "lifted [her] glass and plate, turned her back to the wall and shuffled her feet to pass behind [the] chair." "As she cleared the chair, plaintiff turned right to enter the hall toward the kitchen, and fell." 

What caused her fall was a "tan, fairly large dog" that was "lying in the hallway, past the threshold of the dining room." The dog did not belong to defendants, the owners of the house and the hosts of the party, and was one of two dogs in the house for the party. When plaintiff fell, the wine glass she was holding broke, cutting her finger and severing a tendon. Plaintiff sued, alleging that defendants failed to warn of her of a dangerous condition — the dog — in their home. The trial court granted summary judgment to defendants and plaintiff appealed.

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Good News: That Tenant You May Not Have Known You Had Is Not A Cloud On Title

by:  Peter J. Gallagher (@pjsgallagher) (LinkedIn)

AuctionIf you have ever been to a sheriff's sale in New Jersey then you are familiar with the litany of announcements that precede each sale — "This sale is made subject to easements of record," "The property is being sold on an 'as is' basis," etc. Sellers make these announcements because, under New Jersey law, they are required to disclose "any substantial defect in or cloud upon the title of the real estate sold, which would render such title unmarketable." If a seller intentionally or negligently fails to disclose any substantial defects or clouds on title, then a court may vacate the winning bid and return the winning bidder's deposit. For example, if a seller fails to reveal the amount of unpaid taxes on a property before a sheriff's sale, the sale can be vacated if the winning bidder discovers the amount and is unwilling to pay it.

Usually included in these announcements is something making clear that the property is being sold subject to the rights of tenants and occupants, if any. But what happens when, after the sale, the winning bidder visits the property and discovers a tenant, or at least someone claiming to be a tenant, occupying the property? Does that entitle the winning bidder to vacate the sale and get its deposit back?

This is exactly what happened in PHH Mortgage Corporation v. Alleyne. In that case, the winning bidder at a sheriff's sale moved to set aside its successful bid and compel a refund of the amount it tendered to the sheriff at the sale (winning bidders are generally required to put 20% of the bid price down at the sale and pay the balance within 30 days). The winning bidder argued that, after the sheriff's sale, it sent a representative to the property and he discovered an individual who "refused to give his name but asserted rights to possession of the property as a tenant." The winning bidder argued that (1) this tenancy was a cloud on title, therefore it should have been disclosed at the sale, and (2) the seller has an independent duty to inspect for tenants on the property before the sale. The trial court rejected these arguments and the Appellate Division affirmed.

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Have You Ever Left $600 At The Counter Of A UPS Store?

Security camera (pd)
Me neither, but that is what happened in Glenn v. Duroseau. In fact, plaintiff in that case alleged that she not only left the money on the counter but that, when she went back a few minutes later, it was gone. To make matters worse, the security camera in the store did not work, so there was no way to tall exactly what happened. The trial court originally held this against the store owner, holding that he had a duty to plaintiff to ensure that the security cameras were working, but this decision was reversed on appeal. 

In Glenn, plaintiff claimed that she walked into a UPS Store and placed her pocketbook on the counter, along with an envelope containing $600 in cash. When she left, she claimed that she took the pocketbook but not the envelope. She walked about four blocks away from the store before she realized that she was missing the envelope. When she returned to the store, the envelope was gone. She asked a store employee if he had seen it, but he responded that plaintiff did not leave an envelope in the store. Plaintiff became upset and called her boyfriend, who arrived and told the employee to give plaintiff her money back. The employee again denied that plaintiff had left an envelope in the store. 

Plaintiff then called the police. When police officers arrived, they asked if the security cameras in the store were working. The employee did not know, but called his boss, who arrived on the scene and promised to review the tapes. However, it turned out that the security cameras were not working. Plaintiff sued the store owner, seeking the return of her $600.

 

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Of Parking Spots and Snow Blowers

Snow blower (pd)One of the things I like about the law, and litigation in particular, is the "just when you think you've seen it all . . . " aspect of it. In a recent decision, Sevinc v. Fulton House, the Appellate Division resolved a dispute that reminds us that we have not seen it all, and probably never will. At its core, the case was about the alleged breach of a contract between plaintiff and defendant. What made it interesting was the subject matter of the alleged breach — plaintiff accused defendant, a residential co-op corporation, of improperly appropriating a portion of his parking space and using it to store a snow blower.

In Sevinc, plaintiff purchased both a unit in the co-op and a parking space in the co-op's parking lot. The lease for the parking space did not describe the space's size, shape, or dimensions, but the size and shape were depicted on the architectural plans that the co-op included in its Public Offering Statement. There was no standard sizes for the parking spaces in the co-op's lot, and some spaces, including plaintiff's space, were larger than others because of where they were situated in the irregularly shaped lot. The size of his space was important to plaintiff because he was a limousine driver and needed extra room to park his Lincoln Town Car.

For almost two years, plaintiff parked in his space without incident. One day in the spring of 2011, however, he pulled in and found that a "metal box" had been placed in the left front corner of his space. A few days later, he saw the building's superintendent installing metal strips to hold the box in place. The superintendent told plaintiff that the co-op was relocating a snow blower to the front of his space and that the metal box would be used to store gas cans for the snowblower. Shortly thereafter, the co-op had white and yellow lines painted on the left side of his space, "all the way from the rear of his space to the front, where the snow blower and gas can container were now located." The newly-configured space was ten-feet wide, the same size as other spaces in the lot but one-third smaller than plaintiff's original space. Plaintiff's car still fit in the space, but pulling in and out was more difficult. 

 

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