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TROY, LTD. v. RENNA

September 7, 1982

TROY, LTD., and EAST COAST CONDO TECH, INC., Plaintiffs
v.
JOHN P. RENNA, Commissioner of N.J. Department of Community Affairs, Defendant



The opinion of the court was delivered by: BIUNNO

 BIUNNO, Senior District Judge.

 This suit challenges the validity, on federal constitutional grounds, of the "Senior Citizens and Disabled Protected Tenancy Act", c. 226, N.J.P.L. 1981, approved July 27, 1981 (NJSA 2A:18-61.22 et seq).

 Because some of these provisions contravene the Impairment of Contracts Clause, Art. I, sec. 10, cl. 1, and the Taking Clause of Amend. V, as applied to the States through Amendment XIV, of the United States Constitution, partial summary judgment for plaintiffs will be granted. Other aspects or issues in the case, including the defendants' motions for summary judgment, are denied without prejudice.

 I

 The case involves a garden apartment complex in Springfield, N.J. There are 26 buildings in the complex numbered from 1 to 27 (there is no No. 13), and about 340 residential units or apartments.

 During 1980, after the municipality enacted an ordinance for rent-levelling which the owners of the complex regarded as inadequate in its allowance for automatic annual rent increases, they decided to convert the complex to condominiums pursuant to "The Planned Real Estate Development Full Disclosure Act", N.J.P.L. 1977, c. 419 (N.J.S.A. 45:22A-21, et seq), by applying for and securing registration approval by the N.J. Department of Community Affairs and by recording of a master deed. These steps were completed before the enactment of the challenged statute, and in fact it appears that the 3-year notice to quit, one of the essential steps in the conversion process, was dated January 7, 1981, before S-3028 (the legislative bill that became NJPL 1981, c. 226) was introduced on January 22, 1981.

 For a very long time, New Jersey has had statutes providing for summary dispossess proceedings in landlord/tenant matters, their object being to provide very rapid means for deciding who, for the time being, was entitled to immediate possession. The earliest of these seems to have been the Act of March 10, 1795, sec. 10 of which provided a summary procedure in cases where rent was in arrears but the tenant refused to deliver up possession, whereby the landlord was put to great expense and delay to recover by action of ejectment.

 By the Act of March 4, 1847, similar means were provided in cases where a tenant held over after his lease had expired, or after his lease was terminated for breach. See the discussion of that statute in Fry v. Myers, 56 N.J.L. 115, 28 A. 425 (Sup. 1893), and Story v. Walker, 71 N.J.L. 256, 58 A. 349 (Sup. 1904).

 Over the years these statutes appeared in the Revision of 1877 and the Compiled Statutes of 1910, eventually appearing as R.S. 2:32-265 in the Revised Statutes of 1937. After the new judicial article of the 1947 Constitution took effect, the then Title 2 was revised as Title 2A, effective January 1, 1952, and the key statutory section became NJS 2A:18-53, while NJS 2A:18-56 specified the extent of notice to quit called for to terminate a tenancy at will or for an indefinite period (as, from year to year or from month to month).

 For a discussion of the provisional nature of the proceeding, see Ortiz v. Engelbrecht, 61 F.R.D. 381 (D.N.J.1973). Lindsey v. Normet, 405 U.S. 56, 92 S. Ct. 862, 31 L. Ed. 2d 36 (1972) reviews the common use of such statutes, and Pernell v. Southall Realty, 416 U.S. 363, 40 L. Ed. 2d 198, 94 S. Ct. 1723 (1974) contains a useful review of the common law background. The most recent treatment of the subject is in Greene v. Lindsey, 456 U.S. 444, 72 LEd 2d 249, 102 S. Ct. 1874 (1982), dealing with the service of process aspect. See, also, Guttenberg etc. v. Rivera, 85 N.J. 617, 428 A.2d 1289 (1981).

 The two statutes mentioned, N.J.S. 2A:18-53 and 56, still remain in full force and effect except that in 1974 they were made inapplicable to certain residential tenants as to whom the 1974 law set out its own list of grounds for removal, and notices. This Act was NJPL 1974, c.49, and the new provisions apply to residential tenants other than those in owner-occupied premises with not more than 2 rental units (i.e., a 2 or 3 family house), or in hotels, motels or other transient or seasonal facilities.

 The 1974 Act, generally referred to as the Anti-Eviction Act, largely follows the same grounds long specified, in NJS 2A:18-53 (which still governs for all non-residential tenancies and for those residential tenancies not governed by the 1974 Act). The major difference is that summary dispossess based on holding over after expiration of the term (or termination of an indefinite tenancy), covered by NJS 2A:18-53 a, is not provided for in the 1974 law.

 Instead, new grounds are provided, such as refusal to pay an increased rental which is not unconscionable, refusal to agree to reasonable changes in rental terms, and ...


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