Landlord and Tenant Law 101

Article written based on New Jersey Law

The following are recurring questions landlords should have a working knowledge of. I generally don’t put a disclaimer in my articles but in this case, be advised:

The information you obtain in this article is not, nor is it intended to be, legal advice. You should consult an attorney for individual advice regarding your own situation.

Q. When can a tenant escrow rents until repairs are affected by a landlord, or in the alternative, deduct the costs of repairs from the rent?

A. A landlord warrants to the tenant that the leased property is habitable. This is known as the implied warrant of habitability. This warranty is not against all inconveniences or discomforts. A claimed defect must be on the premises and must directly affect the tenant’s ability to occupy the demised (rented) premises. Transitory failures generally do not constitute a breach of this warranty. Courts have found that the breach must be so substantial as to amount to a constructive eviction. This means that the problem must be so bad that the tenant cannot continue to occupy the space and would have to leave unless the repairs were made. Recently, judges hearing habitability cases, as they are known, have been leaning away from a strict interpretation of the case law and have been giving tenants credit in the form of rent abatements for claimed defects that may be perceived as trivial.

There are four options available to a tenant claiming that their Warrant of Habitability has been breached: They could:

(i) declare that they have been constructively evicted and leave the premises;
(ii) repair the defect on the premises and deduct the costs for repair from their rent;
(iii) withhold the rent until the landlord effects the repairs; or
(iv) make the repairs and proceed with suit against the landlord to collect the costs of same.

If the tenant determines that there is a problem that amounts to a breach of the implied warranty of habitability, the tenant should notify the landlord in writing of the problem and allow a reasonable period of time for the landlord to make the repairs.

If the repairs are not made, and the tenants escrow the rent (or pay less than the full rent amount by deducting costs to repair from same), said landlord can file with the Courts for a judgment for possession evicting the tenants for non-payment of rent. Upon the filing of the eviction action, the court will set a trial date. If the tenant wishes to be heard on the issue of habitability, the Court will most likely set it down for a new hearing date and require that said tenant place the escrowed funds into a court escrow account pending said hearing. The tenant will then have his or her opportunity to prove to a judge that said defects breach the warranty. Examples of defects that could affect habitability are: no heat during cold weather months, defects that prevent the tenants from using certain rooms in the rental premises such as the bathrooms or the kitchen, or off premises conditions which are created by, or are under the control of, the landlord which affect the use of the rental property by the tenants (e.g. disturbing activities of other tenants and common area security).

If the judge agrees with the tenant that there is a breach of the warranty of habitability, the judge will grant an abatement of the rent. This constitutes the difference between the reasonable rental value of the unit in its defective condition and the agreed upon rent. This may be determined on a percentage basis without expert testimony. The abatement is granted only for the period of time that rent was withheld, however.

This is not to say that a landlord does not have an obligation to make repairs that do not affect the habitability of the residential rental property. If the defects do not go to habitability, the tenant can, after giving the landlord a reasonable opportunity to fix it, fix it himself, and sue the landlord for the costs of repair. Habitability is what allows a tenant to escrow rent for that purpose.

The doctrine of the implied warranty of habitability has been applied to non-residential tenancies as well. For example, abatements have been granted to professional office tenants and to other commercial tenancies having to do with problems with a parking lot.

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Q: What happens when a tenant breaches the lease by leaving the rental property before the scheduled end of the rental term in the lease?

A. When a tenant signs a lease for a rental property, here she is agreeing to be responsible for monthly rental payments during the complete term of that lease. Although this applies to both commercial and residential tenancies, the example of a typical one year lease of a residential property will be discussed here.

Many times tenants will rent their home, and then have to leave before the end of the term for any one of a number of reasons (including an opportunity to purchase a home, a business transfer of a tenant to a different state, or the need to find more affordable housing). A tenant should provide the landlord with written notice of premature termination as far in advance of the departure date as possible, in order to give the landlord the greatest opportunity to re-rent the premises. However, this written notice, no matter when it is given, does not alleviate the tenant of his or her responsibility to pay rent under the lease.

Upon leaving, the tenant becomes responsible for payment of rent until the end of the lease term or the re-rental of the premises, whichever comes first. In return, the landlord has a duty to mitigate damages and to make every reasonable effort to re-rent the premises as soon as possible. What usually happens is that the landlord will put the tenant on notice of his duty to pay rent, but not proceed against the tenant to collect same until the tenant’s duty and obligation to pay rents ends (thus fixing the total amount owed for purposes of suit).

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Q. What steps must the landlord take in order to evict a tenant from a rental property?

A. No matter what the circumstance, and whether the rental property is residential or commercial, the landlord cannot effect a “self-help” eviction. He or she must proceed through the state landlord-tenant court in order to evict a tenant. The procedures to be followed prior to filing of the eviction complaint, however, vary depending upon grounds for eviction and the nature of the rental property.

No matter what the type of landlord-tenant relationship, the simplest eviction procedure for a landlord is one based on non-payment of rent. Once the tenant has breached the lease by failing to pay rent, the landlord may bring an eviction action in landlord-tenant court seeking a judgment for possession. Upon the filing of the complaint, a court date is assigned, and the papers are served upon the tenant. If the tenant pays the rent in full (including attorney’s fees and late fees, if the lease calls for it) by the close of business on the day of trial, then the eviction action is dismissed by the Court, and the lease breach no longer exists. If the tenant does not have a justification for not paying the rent ( e.g. a rent escrow flowing from a claimed breach by the landlord of the implied warranty of habitability) and cannot pay the rent by the end of business that day, a judgment for possession will issue by the Court.

As a matter of practice, a judge will order that no warrant for removal (the document which authorizes a court officer to evict a tenant) will issue for three days following the entry of judgment. At the end of that waiting period, but not later than 30 days from that date, the landlord can request that a warrant for removal be issued to a court officer for an eviction. If the landlord fails to request the warrant within 30 days, he must petition the court by motion for permission to do so out of time. The court officer then posts the warrant for removal on the door of the rental property, and waits three business days. During those three days the tenants can seek a stay of eviction. This stay can be granted for several reasons. The most common would be on the grounds that the eviction would cause a hardship upon the tenants due to an unavailability of other dwelling accommodations. The granting of the stay is discretionary with the court, but subject to certain conditions. The tenant may get a hardship stay so long as all rent arrearages plus court costs and current rent are paid, the tenant is not disorderly during the stay, the tenant does not wilfully damage the premises during the stay, and payment is made when due for use and occupancy during the stay. The stay can be for no longer than six months.

There are other grounds for eviction other than non-payment of rent, but the procedures prior to suit differ depending upon the nature of the tenancy. Some of the more common grounds are as follows. For a more detailed discussion, contact our office.

Disorderly tenant. A landlord may bring an action to evict a tenant who is considered disorderly because his conduct is disturbing to the peace and quiet of other tenants. When the conduct consists of noise, it must be repetitious and excessive. In other words, it must be disorderly to a person of “normal” sensitivities. In order to evict on these grounds, the landlord must first issue a notice to cease, which is a written statement to the tenants ordering them to cease the disorderly conduct. If the disorderly conduct continues after the notice to cease, the landlord then issues a notice to quit, which is a written document served upon the tenants indicating that the landlord is terminating the tenancy as of a particular date. In the case of a disorderly tenant, the landlord must wait at least three days after the service of the notice to quit before an eviction action can be brought.

Willful or just grossly negligent damage to the premises. A landlord can bring an action to evict a tenant for wilfully or through gross negligence causing or allowing damage to the rental premises. This does not require a notice to cease but does require a written notice to quit with a three day waiting period before an eviction action can be brought.

Violation of the rules and regulations of the landlord and/or violation of lease covenants. The landlord can bring an action to evict a tenant for a substantial violation of reasonable rules and regulations of the landlord or for substantial violations of covenants in the lease. A notice to cease is required, along with a notice to quit carrying with it a one month waiting period from the service of the notice to quit before an eviction can be brought. The violation of the rules and regulations or lease covenants must be substantial, the rules must be reasonable, and the tenant must have accepted them in writing at the commencement of the lease, or as a part of the lease, and for breach of a lease covenant the lease may have reserved the right of re-entry for that breach. What this means is that the lease itself must contain language allowing the landlord to retake possession of the rental premises for the violation of these rules, rather than simply suing the tenant for damages that flow from that breach. A common example of this is a tenant that keeps a pet on the premises in violation of a “No Pets” provision in the lease.

Failure to pay rent after an increase. The landlord can bring an action to evict a tenant for failure to pay rent after a notice of increase. No notice to cease or notice to quit is required. However, when the rent is increased in a month-to-month tenancy, the landlord must serve a one-month notice to quit terminating the old tenancy and another notice offering a new tenancy and stating an increased rent. This, however, does not give the landlord license to make unconscionable increases in the rent. Increases must be reasonable, which means it would be acceptable to a fair and honest person and not be “monstrously harsh and shocking to the conscience.”

Habitual late payment of rent. The landlord can bring an action to evict a tenant for habitual late payment of rents. A notice to cease and a one month notice to quit are both required. Cases in New Jersey have held that a finding of habitual late payments of rent requires at least two late payments following the notice to cease (there is no case law indicating how many payments must be late before the notice to cease is served).

Personal occupancy by owner or purchaser of unit. An owner may bring an action to evict a tenant if the unit is to be personally occupied by the owner or buyer of the unit. This applies to the owners of three cooperative or condominium units or less or the owner of a building of three residential units or less. The owner himself must seek to occupy the residential unit personally or have contracted to sell it to a buyer who wishes to occupy the premises personally (and the agreement of sale calls for the unit to be vacant at the time of closing). In this instance, the landlord must serve a two month notice to quit, essentially giving the tenant two months to move out.

Occupancy as consideration of employment. Many times people will be able to live in a leased unit rent free as a benefit of employment by the owner. This only applies when the tenant became an employee of the owner simultaneous to or before becoming a tenant. Under these circumstances, a landlord need only serve a three day notice to quit. Where the tenant became an employee of the owner after having become a tenant, the tenant must be given an opportunity to continue living there under a lease for payment of rent.

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Q. What are the landlord’s obligations with regard to the security deposit?

A. After a tenant leaves the rental property, for whatever reason, the landlord must, within thirty days of that departure, provide a written report as to the status of the security deposit and serve same upon the tenant either by personal service or by certified mail. Said report must itemize the total amount of the security deposit, plus interests accrued on that deposit during the lease term, and then itemize each deduction from the security deposit (if there are any). If money is owed to the tenant, then that money must be paid within that thirty day period. If the landlord does not pay money owed to the tenant within those thirty days, or wrongfully withholds all or a portion of the security deposit, the tenant can sue the landlord for double the wrongfully withheld security deposit. For those tenants that employ the services of an attorney, attorneys’ fees can be granted at the discretion of the court if the tenant is successful.

To prevail, the tenant must only prove the existence and subsequent termination of a qualifying residential landlord tenant relationship, the receipt of (or liability for) the security deposit by the landlord, and the failure of the landlord to return the deposit and interest within 30 days. The landlord then has the obligation (and corresponding burden of proof) to justify the failure to return the deposit and interest, which includes proving the validity of any deductions.

If the rental property is residential and not an owner occupied building with no more than two other rental units, the landlord must also give written notice, within 30 days of the receipt of the security deposit, of the name and address of the depository bank or savings and loan association where the deposit was placed, and that bank or savings and loan association must be within the state of New Jersey. If the notice is late or non-existent, the tenant, upon their written notification to the landlord, may apply security deposit current or future rents, without being required to supply another security deposit. In other words, the landlord loses his security and a tenant gets up to a month and a half free rent (since New Jersey law bars landlords from taking more than one and a half month’s rent in security).