Jason R. Rittie, Esq. of Denville, NJ law firm Einhorn Harris Ascher Barbarito & Frost, P.C. presented a seminar on Landlord/Tenant Law for CLE credits. Part one discusses Leases.

1. Jason R. Rittie, Esq.
Einhorn, Harris, Ascher, Barbarito & Frost PC
165 East Main Street
Denville, New Jersey 07834
(973) 627-7300
Jrittie@einhornharris.com

2.  Bills 2012-2013:
◦ A1124 would require landlord to permit tenant to remain in foreclosed
property in certain circumstances.
◦ A1712 would permit eviction for good cause of tenants who are creating
nuisance; requires court to notify landlord when restraining order has been
issued barring tenant from residential rental property.
◦ A1518 would permit tenant to be removed from leased housing due to
criminal activity under certain circumstances.
◦ A705 would require residential leases to be provided in both English and
Spanish in certain municipalities.
◦ S108 would require residential leases to specify when rent payments are due
and allows residential leases to require weekly, monthly, or annual payments
or a single payment for the entire lease term.
◦ S1700 would require three-day attorney review period for residential leases.

3.  Fair Housing Act: N.J.S.A. 52:27D-301 et seq.
◦ Enacted to satisfy “the constitutional obligation
enumerated by the Supreme Court” in the Mount
Laurel cases and to provide for “resolution of existing
and future disputes involving exclusionary zoning”
through “the mediation and review process” set forth
in the Act rather than by litigation, and “to provide
various alternatives to the use of the builder’s remedy
as a method of achieving fair share housing.”

4.  The heart of the New Jersey Fair Housing Act is N.J.S.A. 52:27D-310,
which provides as follows:
A municipality's housing element shall be designed to achieve the goal
of access to affordable housing to meet present and prospective housing
needs, with particular attention to low and moderate income housing,
and shall contain at least:
a. An inventory of the municipality's housing stock by age,
condition, purchase or rental value, occupancy characteristics, and
types, including the number of units affordable to low and moderate
income households and substandard housing capable of being
rehabilitated…
b. A projection of the municipality's housing stock, including the
probable future construction of low and moderate income housing, for
the next six years...
c. An analysis of the municipality's demographic characteristics,
including but not necessarily limited to, household size, income level
and age;

5. d. An analysis of the existing and probable future
employment characteristics of the municipality;
e. A determination of the municipality's present and
prospective fair share for low and moderate income housing and
its capacity to accommodate its present and prospective housing
needs, including its fair share for low and moderate income
housing; and
f. A consideration of the lands that are most appropriate for
construction of low and moderate income housing and of the
existing structures most appropriate for conversion to, or
rehabilitation for, low and moderate income housing, including a
consideration of lands of developers who have expressed a
commitment to provide low and moderate income housing.

6.  The Creation of Affordable Units:
◦ COAH Units: The Local Planning Board adopts a
Housing Element as part of the Master Plan, and also
adopts a Fair Share Plan to outline how it will address
its constitutionally mandated obligation to provide
affordable housing.
◦ Municipality then petitions COAH for substantive
certification, and if granted, is protected for a period of
time from a builder’s remedy lawsuit.

7.  Five Major legal instruments comprise the
Uniform Housing Affordability Controls:
◦ Declaration of Covenants, Conditions and Restrictions
◦ Deed Restriction
◦ Deed
◦ Recapture Mortgage
◦ Recapture Note

8.  The Section 8 Tenant-Based Assistance Program
administered by the New Jersey Department of Community
Affairs (DCA), Division of Housing and Community Resources
is funded by the United States Department of Housing and
Urban Development (HUD).
 The purpose of the program is to make decent, safe and
sanitary housing available to very low-income households in
the private rental market.
 Households that meet eligibility requirements normally pay
no more than 30 percent of their adjusted monthly income
towards their monthly rent and utility costs. The balance of
the rent is paid by the program directly to the owner of the
rental property.
 The DCA administers two Section 8 Tenant-Based Assistance
Programs: the Rental Certificate Program and the
Rental Voucher Program.

9.  The DCA also administers two unit-based
components of the Section 8 Housing Program: the
Project-Based Certificate Program and the
Moderate Rehabilitation Program.
 These programs offer the same benefits as the
Rental Certificate Program except that the subsidy
is linked to the building rather than the household.
 Applicants of the unit-based programs are assisted
if they meet the eligibility requirements and reside
in or wish to reside in housing which has been
rehabilitated through the program. If a participant
moves out of an assisted unit, the household will no
longer receive housing assistance.
 As units become available, applicants included on
the unit-based waiting list will be referred to
rehabilitated units of the appropriate size. The
property owner is solely responsible for tenant
selection.

10.  Plain Language Review Act N.J.S.A. 56:12-1 to
56:12-13: requires leases for real property to be
written in a simple, clear, understandable and
easily readable way.
 This means that the lease must be written so
that the average person can understand it.
 Parties to a lease must be at least 18 years of
age and mentally competent.
 A written lease does not take effect until it is
signed by the landlord.

11.  Term of Lease and Lease Renewal
 Rent, Late Charges, Costs and Attorneys’ fees
◦ Additional Rent
 Security Deposit
 Use of Premises
 Utilities and Services
 Tenant’s Maintenance and Repairs

12.  Insurance, Destruction by Fire or Casualty and
Condemnation
 Alterations and Repairs
 Landlord’s Right of Entry and Set of Keys
 Assignment and Subletting
 Liability of Landlord and Tenant
 Rules and Regulations/Conduct of Tenant
 Tenant’s Default and Landlord’s Remedies

13.  Important for a Landlord to use a written,
detailed rental application, and for residential
property, to have a written rental policy.
 Discrimination based upon race, sex, color,
creed, religion, national origin, ancestry,
marital status, or physical or mental handicap
is prohibited.
 Income is a permissible criteria.
 Uniform application of rental criteria is
essential.

14.  N.J.S.A. 46:8-43 through 46:8-50:
◦ The Act requires NJDCA to prepare, distribute, and update
annually a statement in English and in Spanish of the
established rights and responsibilities of residential tenants
and landlord.
◦ The Act calls for distribution of the statement to all tenants
with a rental term of at least one month living in residences
with more than two dwelling units (or more than three if
the landlord occupies one.)
◦ A landlord is required to give a copy of the current
statement to each tenant when a lease is entered into, and
to make available the current statement in the building
where tenants can easily find it.
◦ The Truth in Renting Statement is available on the web at:
www.nj.gov/dca/divisions/codes/offices/landlord_tenant.html
.

15.  Landlords that use consumer reports to evaluate rental
applications must comply with the FCRA.
 FCRA protects applicant’s privacy and ensures that the
information supplied by consumer reporting agencies is
as accurate as possible.
 To be covered by the FCRA, a report must be prepared
by a consumer reporting agency, such as a credit bureau
or tenant-screening agencies.
 Also, if personal, employment, and previous landlord
references are verified by an agency (and not directly by
the landlord), FCRA does apply.
 A landlord is allowed to charge a prospective tenant for
the cost of the report, and a landlord may also request
reasonable rental application fees.

16.  Discrimination in renting is illegal
◦ Fair Housing Laws
◦ Various State and federal laws: It is illegal for a landlord or
rental agency to refuse to rent to a tenant because of race,
religion, color, national origin, ancestry, marital status, sex,
sexual orientation, or physical or mental handicap.
◦ N.J.S.A. 10:5-12(g): It is illegal for a landlord or rental
agency to refuse to rent to a person because the person has
a Section 8 voucher or another type of housing assistance,
and/or if a tenant will pay rent with other sources of
income, such as welfare, alimony, or child support.
◦ State and federal laws make it illegal for a landlord or
rental agency to refuse to rent to families with children,
with some exceptions.

17.  A landlord cannot refuse to make reasonable
changes to an apartment that will make it easier for
a disabled person to live there.
 The landlord must let a disabled tenant provide
handrails, ramps, or any other special equipment;
however, the cost of the changes can be passed on to
the disabled tenant (except that in subsidized
housing, a landlord may have to pay for the
accommodations.)
 N.J.S.A. 46:8-9.2 permits a tenant with a disability
to terminate a lease because the apartment or home
is not “handicapped accessible,” and upon request,
the landlord is either unwilling or unable to make
the unit accessible.

18.  Residential: Security Deposit Law N.J.S.A.
46:8-19 et seq.
◦ Applies to most residential rental properties, including
mobile homes. The exception is an owner-occupied 2 or
3 family dwelling, unless the tenant makes the
required request to landlord to fulfill the requirements
of the SDL.
◦ A security deposit cannot be more than one and one-
half times one month’s rent.
◦ Security Deposit continues to be the property of the
tenant and it must be held in trust by the landlord.

19.  DEPOSIT OR INVESTMENT OF SECURITY
DEPOSIT
B. Landlords receiving security deposits for 10 or more
rental units shall invest or deposit security deposits in
an insured money market fund established by an
investment company based in New Jersey, or in an
account that bears a variable rate of interest, at a State
of federally chartered bank, savings bank or savings and
loan association insured by the federal government and
located in New Jersey.
B. Landlords subject to this law, receiving security
deposits for less than 10 rental units shall deposit
money in a State or federally chartered banking
institution, in this State insured by the federal
government in an account that bears interest at the
current rate.

20.  Other requirements:
◦ The interest or earnings paid on the security deposit
belongs to the tenant and shall be paid to the tenant in cash
or credited toward rent due and owing on:
 Either the renewal or anniversary of the lease, or on January
31, if the tenant has been notified by landlord that the interest
payments will be paid on January 31 of each year.
◦ A person receiving a security deposit may not combine the
security deposit with his or her own funds.
◦ Within 30 days of receiving a security deposit, the tenant
must be notified of the name and address of the banking
institution or investment company, the amount of the
deposit, type of account and current rate of interest for the
account.
◦ Within 30 days after the end of a tenancy, landlord must
return the security deposit, plus interest earned less
deductions, to the tenant.

21.  Personal Guarantees by parents, family
members and qualified friends - only as good as
the person giving it; thus, requires proper
screening too.
 Commercial leases: Anything goes.
◦ No requirement to segregate security deposit; can
commingle funds
◦ No requirement to pay or credit interest
◦ Can exceed one and one-half monthly rental
◦ Can require letters of credit, cash etc…

22.  Late Fee v. Penalty
◦ Enforceable stipulated damages clauses are referred to
as “liquidated damages,” while unenforceable
provisions are labeled “penalties”
◦ MetLife Capital Financial Corp. v. Washington
Avenue Associates L.P., 159 N.J. 484 (1999)
 Test of validity of late fees and default charges is whether
the provisions are reasonable under the totality of the
circumstances. If not, the provisions are treated as
penalties.
 In commercial contracts between sophisticated parties,
the provisions are presumptively reasonable and party
challenging bears the burden of proving its
unreasonableness.

23.  In leases, residential and commercial, late fees,
default interest, costs of suit and reasonable
attorneys’ fees must be expressed as “Additional
Rent.”
 Several Court decisions have held that a late fee
should not be punitive and must reflect the
actual “administrative expense” that the party
incurs in processing the late payment.
 Generally, NJ Courts have determined that five
(5%) percent is reasonable and enforceable.

24.  Tenants who live in public housing or in other
subsidized buildings may be entitled to certain
notice and procedural rights over what is required
by State law.
◦ Public Housing Notice Requirements:
 Before a housing authority can terminate lease for non-payment
of rent, the housing authority must give a 14-day notice.
 Termination for other causes, must be given 30-days’ notice,
unless State law allows for a shorter notice.
 For causes relating to criminal activity, threats, or having a
felony conviction, housing authority must give reasonable notice
of up to 30 days, depending on how serious the situation is.
 Some causes may require the housing authority to give an
opportunity for a grievance hearing.

25.  Subsidized Housing Notice Requirements:
◦ For buildings receiving a subsidy and have a private
landlord (not a housing authority, and not a Section 8
voucher), tenants must be given a notice that states:
 date tenancy will be terminated;
 Detailed reasons for termination;
 Advises tenant that he/she has 10 days to discuss
proposed termination with the landlord; and
 Advises tenant that if tenant does not leave, landlord may
file suit to evict, at which time tenant may present a
defense.
 In certain cases, tenants may be entitled to a 30-day
notice of termination of tenancy.
 The above rights to notice should be written in the lease.
Unless proper notice is given, tenant cannot be evicted.

26.  Section 8 Voucher Notice Requirements:
◦ A Section 8 voucher tenant is not entitled to any
notices over and above what tenant is required to
received under State law.
◦ A Section 8 voucher tenant must give the public
housing authority a copy of any eviction notice that he/
she receives from a landlord. 24 C.F.R. § 982.551(g).
◦ Also, the landlord of a Section 8 voucher tenant must
give the public housing authority a copy of any
eviction notice served on a tenant. 24 C.F.R. §
982.310(e)(2)(ii).

27.  Mobile home owners are protected from eviction
under the Anti-Eviction Act.
 Court decisions have also established that other
landlord-tenant laws, covering security
deposits, receivership, truth in lending, landlord
identity, discrimination against children, self-
help eviction, distraint, and reprisal (getting
even), apply to mobile home owners.

28.  N.J.S.A. 46:8C-2 through 46:8C-21:
◦ Requires park owners to give at least a one-year
written lease to all renters of space within a month
after they move in.
◦ This is the only form of residential tenancy in New
Jersey where a written lease for a particular period of
time is required.
◦ Other protections under Mobile Home Act include:
 Limitations on moving and selling mobile homes
 Disclosure of fees
 Rent increases and maintenance

29.  Landlords and Tenants can “go green” by
making renovations and changes to incorporate
such things as:
◦ New, energy efficient appliances
◦ Using compact fluorescent light bulbs (CFLs) and use
of timers for lights
◦ Installing dual-flush toilets to conserve water
◦ Installing new showerheads that conserve water
◦ Implement a building wide recycling plan
◦ Adding insulation