Legal Question in Landlord & Tenant Law in New Jersey

No. The law is something like that, but not quite. If a tenant is required to vacate a premises by the municipal authorities because it is an illegal apartment, the tenant is entitled to an advance payment of six months rent as a relocation allowance (regardless of the actual cost of relocation). There is no effect on back rent or eviction except that the landlord can't deduct back rent from the payment but must deduct it from the deposit or sue. In context, an illegal apartment is one that is not suitable for habitation by its nature such as a basement apartment without a separate fire exit or an above-garage loft where a CO can't be obtained. The starting point is an order by the municipality that the premises is deemed illegal and must be vacated. The statute is designed to prevent landlords from letting space that should not be used for habitation for safety reasons. It is rarely enforced in any other situation.

See also: http://info.corbettlaw.net/lawguru.htm