Legal Question in Landlord & Tenant Law in New Jersey

Leases should be in writing. If you have a verbal lease, some or all of it may be enforceable depending on the specifics. If you are forming a lease, a writing is best. The Statute of Frauds requires a writing in order to enforce executory (not fully completed) contracts for amounts in excess of $500 or contract which, by their terms, cannot be performed within one year. Most leases fit one of these categories.

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A lease may be either oral (commonly incorrectly called �verbal�) or written; it is an agreement which gives rise to the relationship of landlord and tenant or lessor and lessee. O�Hara v. Shoimer, an unpublished opinion, Docket No. A-2853-96T2 (App. Div. 1997), found the defendant liable on a lease when the defendants had orally agreed to the terms of a lease and had given a deposit, but while the lease was being prepared in writing attempted to revoke the agreement. The Appellate Division affirmed the trial court, stating that:

The Special Civil Part rejected defendants� contention that they were entitled to revoke their acceptance within three business days of their oral assent to the terms of the agreement. The judge was plainly correct in his conclusion that the attorney review procedure adopted in New Jersey State Bar Ass�n v. New Jersey Ass�n of Realtor Bds., 93 N.J. 470 (1983), Order supplemented by State Bar Ass�n v. New Jersey Ass�n of Realtor Bds., 94 N.J. 449 (1983), is not applicable to leases for a term of less than one year. Id. at 480. The judge also correctly determined that the statute of frauds was not applicable because the lease term was less than three years. N.J.S.A. 25:1-12.

The trial judge in O�Hara found that the parties intended to be bound by their oral agreement and viewed the written lease as merely a memorialization of their mutual promises, citing Morales v. Santiago, 217 N.J. Super. 496, 501 (App. Div. 1987), Berg Agency v. Sleepworld of Willingboro, Inc., 136 N.J. Super. 369, 373-74 (App. Div. 1975), and others.

The advantage of a properly written lease is that it defines the rights and obligations of the parties, and thereby gives a type of certainty to the parties. There is a potential special advantage to residential tenants who live in an owner-occupied two or three family building, when the lease is for a defined period (or duration, usually called the �term� of the lease, although a lease is an accumulation of �terms,� usually called �terms and conditions�). That advantage to a residential tenant is that the landlord cannot evict that tenant without having a ground for eviction under either 53b or c; in other words, when a tenant has an executory lease (one in which the duration has not expired), a landlord cannot evict that tenant pursuant to N.J.S.A. 2A:18-53a because the tenant is not �holding over after the expiration of his term� � the term has not yet expired.

On the other hand, a tenant with a written lease (even in an owner-occupied, two- or three-family building) may be evicted if the tenant �shall commit any breach or violation of any of the covenants or agreements . . . contained in the lease . . . where a right of re-entry is reserved in the lease for a violation of such covenants or agreements.� 53c(4). But this statement may be illusory; there may be an oral lease, and there may even be an oral reservation of a right of re-entry for a breach. If that is disputed, the issue becomes a matter of credibility.

An advantage to a landlord of having a written lease (in either a commercial tenancy or a residential tenancy of four or more units, or one not occupied as a residence by the landlord) is that the landlord has the right to evict for breach of the lease (commonly called a �default�), pursuant to 61.1e. (There is also a benefit to having rules and regulations, pursuant to 61.1d, which requires that the rules and regulations must �have been accepted in writing by the tenant or made a part of the lease.�) (Emphasis added.)