On appeal from the Mercer County District Court.
Lora, Antell and Pressler. The opinion of the court was delivered by Pressler, J.A.D.
This appeal implicates important questions as to the scope of a tenant's remedies where there has been a breach by the landlord of the implied covenant of habitability.
Plaintiff is the owner of a one-family house in Trenton which she leased to defendant in March 1978 at a monthly rental of $105, exclusive of heat and utilities. The house was then in an apparently somewhat dilapidated condition, which accounted for the relatively low rent. The condition of the premises, however, continued to deteriorate, and despite defendant's frequent demands that plaintiff make necessary repairs, such repairs were either inadequately undertaken or not undertaken at all. Finally, defendant, claiming breach of the covenant of habitability, withheld the rent due for November and December 1978. Plaintiff commenced a summary dispossess action for nonpayment of rent and, because of the interposition of the uninhabitability defense, the trial judge directed defendant to pay the full rent due into court and scheduled a hearing on the defense. Defendant complied and has since then been so depositing the monthly rent.
The habitability hearing was conducted in mid-January 1979. Based on the testimony of both defendant and a City of Trenton Housing Inspector who had inspected the premises the week before and had noted 27 code violations, the trial judge concluded that there had in fact been a breach of the implied covenant. The most serious defects included hazardously defective wiring, a kitchen and living room ceiling in imminent danger of falling down, and open holes in the floors of most of the rooms existing by virtue of uncovered heating vents. The trial judge directed
plaintiff to arrange for the necessary repairs, assuring her that the fund created by the deposit into court of the monthly rentals would be available to her for that purpose. He further directed defendant to continue making the monthly deposits. No abatement in rent was then allowed and the matter was continued until March 1, 1979, in order to permit the repairs to be made. Because of plaintiff's failure to appear at that hearing, the matter was again continued until June. Plaintiff again failed to appear. In the interim, the rent money had continued to accumulate in the court deposit and nothing had been done to remedy the defective conditions.
In view of plaintiff's nonappearance and her evident lack of interest in the preservation of the premises, if not her outright abandonment thereof, defendant urged the trial judge at the June hearing to proceed without plaintiff and at least to accord her a rent abatement. The judge refused to do so since he was of the view that entry of an abatement order would not be appropriate until the necessary repairs were made and, further, if the landlord would not make them, then it was the responsibility of the tenant to arrange for them with court-monitored resort to the accumulating fund on deposit. His explanation for this course of action was that
Thus, the result of the June hearing was to maintain the entirely unsatisfactory status quo of unremedied defective premises coupled with the tenant's monthly payment, albeit into court, of the full rent despite the already adjudicated breach of the covenant of habitability.
Defendant contends that the trial judge erred in failing to resolve the impasse, in refusing to grant her an abatement and
in imposing upon her the obligation to take the initiative in respect of repairs.*fn1 We agree. We appreciate the judge's legitimate concern that the substandard conditions in which defendant and her family were living should not be permitted to persist. But we are also persuaded that the remedial approach he took, limited to an attempt to force the tenant to undertake the landlord's responsibilities, was not only ultimately unproductive of that end but also constituted a denial of defendant's legitimate rights and an overly constrictive perception of his adjudicative role and the remedial resources available to him.
The landmark decision in Berzito v. Gambino , 63 N.J. 460 (1973), made clear that where there is a breach of the landlord's covenant of habitability, there construed as mutually dependent upon the tenant's covenant to pay rent, the tenant has various remedial options open to him. He may regard the breach as a constructive eviction and quit the premises without further liability to the landlord for rent. He may give notice to the landlord of the defect and if the landlord fails to remedy the condition, the tenant himself may do so, deducting the reasonable cost of repair from his rent. Or he may seek from the court an abatement of rent calculated on the basis of the difference, if any, between the rent reserved and the market value of the premises in their defective condition. Defendant here proved the breach of the covenant. She did not choose ...