A New Twist On Who Gets The House When The Relationship Ends

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

House + money (pd)If you read this blog then you know that failed relationships often make for the most interesting cases. For example, if your would-be spouse calls off your wedding, then you are usually entitled to get the engagement ring back. But, if you cancel your wedding reception, you may not be entitled to a refund from the venue where it would have taken place. And, of course, if your ex-wife agreed to pay all "utilities" under a divorce settlement but fails to pay for water filtration services that remained in your name and you get sued by the water filtration company, your ex-wife will be required to reimburse you for those charges. Now, Burke v. Bernardini can be added to this list.

In Burke, plaintiff and defendant were involved in a "romantic relationship." (They had actually known each other for 25 years before they began dating.) While they were dating, plaintiff bought property on which he built a house where he and defendant lived together. He paid approximately $368,000 for the property and another $100,000 for improvements and additions. Both plaintiff and defendant contributed furnishings.

Before buying the property, the parties entered into an agreement that provided:

[Plaintiff] acknowledges and agrees that [defendant] has provided, and will continue to provide[,] companionship to him of an indefinite length. [Plaintiff] promises and represents that upon closing, the home shall be deeded and titled in the name of "[plaintiff] and [defendant], as joint tenants with the right of survivorship."

(As a side note, only in the hands of a lawyer does "'til death do us part" become "I agree to provide companionship of an indefinite length.") The agreement also provided that defendant would have no "financial obligations for the home, including, but not limited to, property taxes, homeowners association fees, and homeowners insurance."  

Continue reading “A New Twist On Who Gets The House When The Relationship Ends”

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." 

Continue reading “This Is The Landlord-Tenant Equivalent Of Accusing Your Spouse Of Stealing The Covers”

“[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. 

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

Homeowner not liable for sweetgum spiky seed pod slip and fall

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

Sweetgum treeIn the past, I have written about whether property owners can be liable for slip-and-fall accidents caused by ice and snow on their sidewalks. (Click here, here, and here for examples.) This is the first time I will address the related topic of whether property owners can be liable for accidents caused by "spiky seed pods" that fall from sweetgum trees on their property. Turns out that the source of the slippery sidewalk does not change the law too much for residential property owners.

In Neilson v. Dunn, plaintiff was injured when she slipped on spiky seed pods that fell from a sweetgum tree on defendant's property onto an adjacent sidewalk. The tree had been on defendant's property since she and her husband bought it, and plaintiff knew that there were seed pods on the sidewalk when she began her walk. Defendant also "employ[ed] a lawn maintenance contractor whose services include fall and spring clean ups." The most recent clean up occurred two month's prior to plaintiff's accident.

After plaintiff sued, defendant moved for summary judgment, arguing that she could not be liable for plaintiff's injuries because she had neither created nor exacerbated a dangerous condition on the sidewalk. She argued that the "seed pod accumulation" was a natural condition over which she had no control, and that she acted reasonably in retaining a lawn maintenance service to "periodically clean up any debris, [including the seed pods,] on her lawn and sidewalk." Plaintiff countered that defendant had a duty to ensure that her property was spiky seed pod free and that her failure to do so created a hazardous condition.

Continue reading “Homeowner not liable for sweetgum spiky seed pod slip and fall”

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.

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

Lease “Signed Under Protest” Not Binding (And Have You Ever Heard Of “Grumbling Acceptance”?)

Sign contract(Pd)
What happens if a tenant signs a lease but writes "signed under protest" under the signature? According to the Appellate Division, it means the lease is not binding. More importantly, perhaps, the Appellate Division has never heard of the contract theory known as "grumbling acceptance." If this is one that you did not cover in law school, join the club.

In Bergenline Property Group, LLC v. Coto, defendant was a longtime tenant of premises owned by plaintiff. There was an oral lease between the parties for most of the tenancy. But, in 2013, plaintiff served a notice to quit on defendant, requiring defendant to sign a written lease and pay a security deposit or vacate the property. Defendant refused and plaintiff served another notice to quit, requiring defendant to vacate the property for refusing to agree to reasonable changes to the terms of the lease. Defendant did not vacate and plaintiff filed an eviction complaint.

At the hearing on plaintiff's eviction complaint, the parties agreed to allow the court to determine the reasonableness of several provisions in the proposed lease and modify the lease as necessary. The court did just that, issuing a written opinion that modified some of the terms of the lease. Despite defendant's prior agreement to be bound by the court-modified lease, defendant refused to sign it. Plaintiff then moved for a judgment of possession. At the hearing on that request, the court gave defendant another chance to sign the lease. In response, Defendant first delivered a lease with a signature that was not witnessed and a post-dated check for the security deposit. Plaintiff refused to accept both. Defendant then delivered a lease, signed by defendant and witnessed by defendant's counsel, and a money order for the security deposit. However, directly below defendant's signature on the lease appeared the words "signed under protest." Plaintiff refused to accept this lease as well, but gave defendant one more chance to come to plaintiff's counsel's office and sign the lease. Defendant was apparently driven to plaintiff's counsel's office, but refused to leave the car or execute a new lease.

Plaintiff then renewed its request for a judgment of possession. Defendant opposed the motion, arguing, among other things, that the "signing under protest" language did not change the document, and stating, "parenthetically," that if plaintiff was "offended" by that language, plaintiff could strike it. The court entered the judgment of possession, finding that, by placing the "signing under protest" language on the lease, there was no meeting of the minds, and therefore no binding contract. As a result, defendant failed to sign the lease and violated the court's order requiring her to do so.

Continue reading “Lease “Signed Under Protest” Not Binding (And Have You Ever Heard Of “Grumbling Acceptance”?)”

New Jersey Supreme Court Answers Burning Question: When is a converted garage a “building” under New Jersey’s Anti-Eviction Act?

When my wife and I lived in Hoboken, one of our favorite restaurants was Court Street. It is located on the corner of Sixth Avenue and Court Street. We went there at least once a week for most of the time we lived in Hoboken. (Great food, good atmosphere, a little off the beaten path. You should check it out.) Little did I know at the time that we were looking out from the restaurant onto a "building" that was the subject of a long-running landlord-tenant dispute that was only recently resolved by the New Jersey Supreme Court.

I used quotation marks around "building" because the issue in Cashin v. Bello was whether the word "building" as used in the Anti-Eviction Act denotes a single, unattached physical structure or whether it includes all structures owned by an individual that are located on the same parcel of land. This issue was more than just semantics to the parties involved because if the Supreme Court endorsed the former then defendant could be evicted, but if it endorsed the latter, then defendant could stay. Unfortunately for the tenant, the Supreme Court endorsed the former.

Continue reading “New Jersey Supreme Court Answers Burning Question: When is a converted garage a “building” under New Jersey’s Anti-Eviction Act?”