This summary dispossess action raises the novel question whether the "owner-occupied premises" exception contained in N.J.S.A. 2A:18-61.1 (the Anti-Eviction Act, hereinafter "the Act") includes owner-occupied premises with two rental units where one of the units is a commercial unit and the other residential.
N.J.S.A. 2A:18-61.1 provides in relevant part:
No lessee or tenant . . . may be removed by the County District Court or the Superior Court from any house, building, mobile home or land in a mobile home park or tenement leased for residential purposes, other than owner-occupied premises with not more than two rental units . . . except upon establishment of one of the following grounds as good cause:
On June 1, 1987, plaintiffs purchased a building in Teaneck, New Jersey containing two apartments and one commercial unit and immediately moved into one of the apartments. At that time the building was subject to a rent levelling ordinance, and defendant was a month-to-month tenant of the other apartment paying rent of $288.15 per month. Defendant has resided in her apartment for approximately 25 years.
In September, 1987, following receipt of a letter from the township clerk of Teaneck, advising that the rent levelling ordinance would no longer apply to the building,*fn1 plaintiffs
served defendant with a notice to quit, terminating the tenancy, but offering defendant a new tenancy at an increased monthly rental of $800 commencing on November 1, 1987.*fn2 When defendant failed to pay the increased rent or to vacate the apartment, plaintiffs commenced this action to remove defendant for failure to pay rent pursuant to N.J.S.A. 2A:18-53(b).
Defendant contends that the "owner-occupied premises" exception does not apply where, as here, one of the rental units is a commercial unit. Therefore, she maintains, the Act controls and because plaintiffs have failed to demonstrate "good cause" for the eviction under N.J.S.A. 2A:18-61.1f of the Act, the action should be dismissed. Section f permits removal of a tenant for failure to pay rent after an increase, provided the rent is not unconscionable.*fn3
Plaintiffs assert that they do not have to prove that defendant committed an act constituting "good cause" for eviction because the Act does not cover this type of tenancy.
Defendant bases her position, in part, on the reasoning of Judge Scancarella in Cabrera v. Mordan, 220 N.J. Super. 373 (Sp.Div.Pt.1987). There plaintiff, the owner of a building consisting of three residential units and a commercial unit sought, pursuant to subsection l. (3) of the Act, to remove one of the residential tenants in order to personally occupy the unit. Under that section, where an "owner of a building of three residential units or less seeks to personally occupy a unit" [emphasis supplied], good cause for eviction exists, and the tenant may be removed. In denying relief to the owner, Judge
Scancarella opined, by way of dicta, that the Legislature in enacting section l. (3), did not intend "to allow eviction of tenants in any type of mixed use building, no matter how few units ...