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Guttenberg Savings and Loan Association v. Rivera

Decided: December 11, 1979.

GUTTENBERG SAVINGS AND LOAN ASSOCIATION, PLAINTIFF-RESPONDENT,
v.
EMILIO RIVERA ET AL., DEFENDANTS-APPELLANTS



On appeal from the Superior Court of New Jersey, Chancery Division, Hudson County, whose opinion is reported t 165 N.J. Super. 201 (1979).

Crane, Kole and King. The opinion of the court was delivered by King, J.A.D.

King

The substantive question on this appeal is whether a foreclosing mortgagee, of a residential apartment building may obtain an order of the Superior Court, Chancery Division, evicting residential tenants in possession under existing leases with the mortgagor without establishing good cause for removal as required under N.J.S.A. 2A:18-61.1; L. 1974, c. 49 ยง 2, frequently called the Anti-Eviction Act or For-Cause Eviction Act. The Chancery Division held that the tenants could be removed despite an absence of statutory cause. 165 N.J. Super. 201 (1979). We disagree and reverse.

Plaintiff held a first mortgage, which secured a debt of about $30,000, on an eight-unit apartment building located at 510 Palisade Avenue in Jersey City. On July 21, 1978 plaintiff filed a complaint in foreclosure alleging default in payments. In addition to the owners, month-to-month tenants Rivera, Mujer, Rodriquez, Kalisak and Dressler were joined as defendants. Plaintiff demanded possession of the premises.

On November 27, 1978 the five tenants moved to dismiss the complaint for failure to state a cause of action against them. In

an opinion dated January 9, 1979 the Chancery Division judge denied defendants' motion, holding that N.J.S.A. 2A:18-61.1 applied only to summary dispossession proceedings initiated in the county district court and not to foreclosure proceedings. 165 N.J. Super. at 203.

On January 18, 1979 plaintiff moved for an order striking the answer filed by the tenants, for entry of default and for leave to proceed as if the foreclosure were uncontested. The tenants cross-moved for summary judgment and alternatively for a stay of the execution of any writ of possession pending appeal. In support of this application the four tenants filed affidavits stating that they no longer resided at 510 Palisade Avenue, Jersey City, because of an order by the Director of Property Conservation of Jersey City that the apartment building be vacated as uninhabitable. These tenants all expressed a desire to return to the apartment building if it were rehabilitated. The tenants also related the difficulty that people of low and moderate income with sizable families have finding decent urban housing.

At a hearing on February 9, 1979 the tenants' counsel represented that the mortgagor's abandonment of the premises following default caused a state of disrepair resulting in the municipal order to vacate the premises. The Chancery Division judge then entered an order for summary judgment in plaintiff's favor and denied the application for a stay because the tenants had vacated the premises. The motion for a stay of the warrant for possession was withdrawn without prejudice. Final judgment of foreclosure was entered on March 30 and plaintiff was awarded possession.

On April 16 the tenants filed this appeal. In order to protect their rights pending appeal they filed a notice of lis pendens. They also applied for a stay of the execution sale. This stay was denied, but on July 10 the Chancery Division judge ordered a stay of the judgment awarding possession of the premises to plaintiff against the tenants, pending determination of this appeal. The court further ordered that "plaintiff inform any

and all prospective purchasers of said property of the pendency of this appeal and of defendants' asserted right of possession in said property."

In anticipation of the claim of the mootness of this appeal, suggested by the vacation of the premises by the tenants pursuant to the municipal order, their counsel moved to supplement the record. We now grant that application. The proffer contains the notice of lis pendens of the appeal and the affidavits of tenants Rodriquez and Rivera stating that they still desire to move back into 510 Palisade Avenue "once the building is repaired," which repairs ...


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