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G.D. Management Co. v. Negri

Decided: January 13, 1982.


On appeal from the Bergen County District Court.

Matthews, Pressler and Petrella. The opinion of the court was delivered by Pressler, J.A.D.


[182 NJSuper Page 410] This appeal raises a novel issue of landlord-tenant law in the context of a condominium conversion. The question before us is

whether the rights accorded a tenant by a municipal rent-leveling ordinance are abrogated by reason of the conversion and sale to another of the unit he occupied prior to the conversion and continues to occupy thereafter.

The tenants here, defendants Regina Negri and Maureen Cavalluzzi, entered into a one-year lease with BH Associates on February 2, 1979, of an apartment in a high-rise building in Hackensack, New Jersey, for a reserved monthly rent of $580. During that year the building was converted to condominium ownership pursuant to N.J.S.A. 46:8B-1 et seq. There is nothing in the record to suggest to the contrary, and we therefore assume that the tenants were offered an opportunity to purchase their apartment as required by N.J.S.A. 2A:18-61.8 and chose to reject the offer. Subsequently, on October 4, 1979, the condominium unit was purchased by Robert K. Raynor and Vivian R. Raynor, who retained plaintiff G.D. Management Company to manage the unit for them. The Raynors own one other condominium unit in Hackensack but in a different building.

Shortly after expiration of the original one-year lease, plaintiff advised defendants that they had an option either to quit the premises at the end of the ensuing month or to remain in possession at an increased rental of $650. It was stipulated that while that rent was in excess of that which would have been permitted by the Hackensack rent leveling ordinance, it was nonetheless not unconscionable. Defendants refused to quit and refused as well to pay the rent increase. Plaintiff, therefore, brought a summary dispossess action against them in the county district court where the issue, as posed and tried, was whether plaintiff was bound by the terms of the rent-leveling ordinance. The judge concluded that it was, and we agree.

At the outset we note that the Hackensack rent-leveling ordinance does not purport to address the factual situation of a condominium conversion in which the preconversion tenant remains in occupancy after the sale of his unit. As applied to this

situation, moreover, the ordinance is textually ambiguous and hence not eminently helpful in resolving the problem. Thus, the ordinance is expressly applicable, with stated exceptions not here relevant, to "any building or structure rented or offered for rent to three (3) or more tenants or family units for residential purposes." Whether this definition incorporates the qualification of undivided ownership of the building is an arguable proposition. Furthermore, anomalies are unavoidable, whether the definitional emphasis is placed on the nature of the physical structure or the nature of its ownership. If placed on ownership, then the possibility exists that every occupant of a highrise apartment building would be a tenant of a different individual condominium-unit owner and that none of the tenants, whether or not their tenancies antedated the conversion, would be afforded the rent-leveling protection available to tenants of those other similar apartment buildings in the municipality which continue in undivided ownership. If emphasis is placed on the definitional standard of a building rented to three or more family units, then, as condominium units become owner-occupied, the last two tenants remaining would suddenly have lost their pre-existing protection.

We are accordingly satisfied, because of the artificially disparate and illogical results which would obtain under either construction of the ordinance, that the sounder and more rational approach is to regard the ordinance as silent in respect of the condominium-conversion problem and to search elsewhere for guidance as to its applicability in that context.

In that endeavor we are persuaded that there have been sufficiently clear statements of legislative policy to dictate the result here. It is first plain that enactment of the Horizontal Property Act, N.J.S.A. 46:8A-1 et seq. , governing cooperatives, and the Condominium Act, N.J.S.A. 46:8B-1, inevitably impacted upon the rights and status of tenants of units which were converted to these forms of ownership. The legislative response

was its enactment of L. 1975, c. 311 which, among its other purposes, was to accord substantial ...

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