To schedule a confidential consultation, call (732) 572-0500
Kenneth Vercammen & Associates, P.C. 2053 Woodbridge Avenue - Edison, NJ 08817

Tuesday, October 25, 2016

One month notice to quit required to evict on month to month tenancy

One month notice to quit required to evict on month to month tenancy

                                                                                    SUPERIOR COURT OF NEW JERSEY
                                                                                    APPELLATE DIVISION
                                                                                    DOCKET NO.  A-0604-14T2





September 14, 2016

Argued May 9, 2016 – Decided

Before Judges Nugent and Higbee.

On appeal from Superior Court of New Jersey, Law Division, Special Civil Part, Monmouth County, Docket No. LT-3277-14.

Elias L. Schneider argued the cause for appellant.

George J. Cieri argued the cause for respondent.


Defendant, Leora Dubrovsky Realty Group, LLC, appeals from a July 11, 2014 judgment for possession issued against it in an action brought by plaintiff, Jacob Zlotkin.  We affirm.
Plaintiff is the owner of a commercial unit on Court Street in Freehold.  On May 10, 2012, plaintiff and defendant entered into a one-year commercial lease (the "May 2012 lease") of the unit on Court Street, with rent payable in $300 monthly installments.  The lease also provided defendant had the option to extend the lease on a year-to-year basis for the next five years.  This provision stated all other terms of the renewal would remain identical, except for yearly rent increases to be negotiated by the parties.
As the lease drew near its end, the parties were unable to agree on a rent increase.  Defendant remained in possession of the premises past the expiration of the lease term.  For several more months, defendant paid rent under the rate fixed by the May 2012 lease.  Later in 2013, plaintiff served defendant with a Notice to Quit and a Demand for Possession, effective November 1, 2013.  Again, defendant remained in possession of the property past this date.
Plaintiff filed a summary dispossession action.  After trial, a judgment for possession of the property was entered for plaintiff, and this appeal followed.  In subsequent proceedings in 2014, the parties agreed to a stay of the execution of the judgment of possession pending this appeal.
The court's scope of review of a judgment rendered after a non-jury trial is limited, and should not be disturbed unless completely unsupported by the evidence in the record.  Rova Farms Resort, Inc. v. Investors Ins. Co. of Am., 65 N.J. 474, 483­-84 (1974).  More specifically, "[w]e do not weigh the evidence, assess the credibility of witnesses, or make conclusions about the evidence."  Mountain Hill, L.L.C. v. Twp. of Middletown, 399 N.J. Super. 486, 498 (App. Div. 2008) (quoting State v. Barone, 147 N.J. 599, 615 (1997)), certif. denied, 199 N.J. 129 (2009).  Indeed, we "do not disturb the factual findings and legal conclusions of the trial judge unless convinced that they are so manifestly unsupported by or inconsistent with the competent, relevant and reasonably credible evidence as to offend the interests of justice."  Rova Farms Resort, supra, 65 N.J. at 484 (quoting Fagliarone v. Twp. of N. Bergen, 78 N.J. Super. 154, 155 (App. Div. 1963)).
Defendant asserts because this lease was year-to-year, the notice to quit was not timely, and thus the court lacked jurisdiction to enter judgment on plaintiff's summary dispossession action.  This argument misses the mark.  N.J.S.A. 2A:18-53(a) vests in the Special Civil Part jurisdiction of actions to remove non-residential holdover lessees and tenants.
N.J.S.A. 2A:18-56(a),(b) sets forth the time periods for serving the notice to quit.  Subsection (a) requires that year-to-year tenants be given at least three months' notice, while subsection (b) requires month-to-month tenants be given only a single months' notice.  Therefore, to resolve the issue before us we must determine the lease term at the time the defendant was noticed:  a month-to-month term, in which case notice was timely, or a year-to-year term, in which case notice was untimely.  This question, in turn, requires resolving whether defendant successfully exercised its option to renew under the May 2012 lease.
Defendant challenges on appeal the interpretation of the parties' rights and responsibilities under the lease agreement and contends it successfully exercised its option to renew for another year under the terms of the May 2012 lease.  The interpretation of contracts is a "matter of law for the court subject to de novo review."  Sealed Air Corp. v. Royal Indem. Co., 404 N.J. Super. 363, 376, certif. denied, 196 N.J. 601 (2008); see also Town of Kearny v. Disc. City of Old Bridge, Inc., 205 N.J. 386, 411 (2011) (applying this principle to the interpretation of leases).
At trial, the judge credited testimony that negotiations to exercise the option provided by the May 2012 lease took place during the 2013-2014 term.  The record contains both oral testimony as well as evidence of email exchanges between the parties regarding price negotiations.[1]  However, the parties were ultimately unable to agree on a rent increase.  Based upon this testimony, the trial judge determined there was no "meeting of the minds" and the option to renew was not exercised.  We agree. 
A tenant who holds over beyond the expiration of their lease term is deemed to be a month-to-month tenant.  N.J.S.A. 46:8-10.  Therefore, when defendant held over, the company became a month-to-month tenant, entitled to only a month's notice to quit.  N.J.S.A. 2A:18-56(b).  Since this notice to quit was appropriately given, the trial court committed no error by hearing plaintiff's summary dispossession action.
Defendant argues, in the alternative, that although the parties could not agree on the rental amount, the trial judge was in error by not intervening and supplying a reasonable rental amount.  Putting aside the fact defendant did not request the court supply a rental amount at any time prior to trial, there is no legal authority in New Jersey providing a court to set a new rental amount when parties are unable to agree.  As defendant admits in its brief, there is no reported New Jersey case where a New Jersey court has set a new rental amount where parties only agreed to agree to negotiate future increases, but are unable to agree on the amount of rent to be paid during the renewed term.  Defendant provides extensive citations to other jurisdictions – ranging from Alaska to the U.S. Virgin Islands – to illustrate use of this practice elsewhere.  Absent guiding New Jersey precedent, the trial judge correctly refused to set a rent for the parties and properly entered the judgment of possession.

Description: certify

[1]   At trial, there was also discussion regarding a proposed May 2013 lease, which contained several different terms and eliminated all options to renew.  Defendant argues that these changes are evidence of plaintiff's failure to abide by the terms of the May 2012 lease and a failure to negotiate a yearly rent increase in good faith.  However, the exact role of this second lease is unclear.  Plaintiff was unable to testify confidently that he personally prepared this second lease, or as to what its specific function in the negation process may have been.  What is clear, however, is that this lease did not represent the totality of the negotiations between the parties.

No comments: