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Plaza Road Cooperative Inc. v. Finn

Decided: May 13, 1985.

PLAZA ROAD COOPERATIVE, INC., A NEW JERSEY CORPORATION, PLAINTIFF-APPELLANT,
v.
MAE GAMBERT FINN, DEFENDANT-RESPONDENT



On appeal from Bergen County District Court.

Morton I. Greenberg, O'Brien and Gaynor.

Per Curiam

We affirm the dismissal of the complaint which sought the summary dispossession of a cooperator-shareholder of a cooperative apartment association under N.J.S.A. 2A:18-61.1, substantially for the reasons expressed by Judge B. M. Sween in his written opinion dated November 29, 1983 which we incorporate herein:

This case presents a jurisdictional issue apparently not previously addressed by the courts of this State -- is the relationship between a cooperative apartment association and a member-occupant that of a landlord-tenant for purposes of a summary dispossess action in a County District Court?

A cooperative apartment house is a multi-unit dwelling in which each resident has an interest in the entity owning the building and an agreement entitling him to occupy a particular apartment within the building. The interest in the owner-entity is usually that of a stockholder and the occupancy agreement is generally referred to as a 'proprietary lease.' The difficulty in classifying or defining the owner-occupant status in legal concepts has caused confusion, and a cooperative is frequently described as a building in which each 'tenant' 'owns' an apartment, an obvious contradiction in terms. 68 Yale L.J. 546. The primary issue presented to the court is whether this combination of owner and occupant interests is such that a landlord-tenant relationship no longer exists for the purpose of summary dispossess action jurisdiction in this court.

The conversion of the apartment building and the creation of the legal relationship between the parties in this case is typical of this form of land use. In February 1979, defendant leased an apartment from Plaza Road, Inc., plaintiff's predecessor in title. Thereafter, in late 1981 or early 1982, Plaza Road, Inc. sought to 'convert' the apartment building and negotiated a plan of cooperative organization with the tenants and sought the necessary governmental approvals.

Later, defendant entered into an occupancy agreement with her former landlord, which provided for its termination when the plan of cooperative organization was approved, at which time defendant would purchase a membership, purchase one share of stock and enter into a proprietary lease with the cooperative corporation. On or about November 1, 1982, defendant acquired one share of stock in plaintiff cooperative corporation for $41,000 ($6,800 in cash and $34,200 by a mortgage) and entered into an agreement entitled 'Owner-Occupant Agreement Proprietary Lease,' which gives rise to this litigation.

Plaintiff seeks to invoke the jurisdiction of this court on two grounds: (1) the proprietary lease confers jurisdiction for summary dispossess purposes on the court; and (2) the court has jurisdiction by virtue of the landlord-tenant relationship created by the proprietary lease.

I

Although the proprietary lease provides in paragraph 1(a):

The owner-occupant agrees that any action brought under this agreement for failure to observe any terms or conditions hereunder, including failure to pay rent, shall be brought in the Bergen County District Court as a summary dispossess action under N.J.S. 2A:18 and owner-occupant hereby submits to the jurisdiction of this court.

in paragraph 32:

and in paragraph 43:

In addition to submitting to the jurisdiction of the Bergen County District Court, the owner-occupant-lessee agrees to pay L. & F. Co. and/or Plaza Road Cooperative Association, Inc., the following items as part of any judgment, and such amounts are due and includible with any such judgment as if they were due as additional rents, attorney's fee of $75.00, court costs, constable and/or warrant fees, and applicable late charges, as provided for under the terms of all agreements between the parties.

it has been long established that no one can confer jurisdiction on a court by private agreement between the parties. Vorhies v. Cannizzaro, 66 N.J. Super. 551 (App.Div.1961). The owner-occupant agreement between the parties cannot confer jurisdiction upon the court to hear a summary dispossess action, if a landlord-tenant relationship does not exist between the parties.

II

The provisions of the owner-occupant agreement between the parties may be divided into two categories: (1) those which may be found in any lease agreement setting forth the rights and obligations of the landlord and tenant; and (2) those which become necessary due to the occupants' hybrid position of being both an occupant of a single apartment unit and having an ownership interest in the entire apartment building.

Examples of the former are provisions:

1. Requiring the cooperative association to maintain the exterior and common ...


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