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447 Associates v. Miranda

Decided: July 10, 1989.


On certification to the Superior Court, Appellate Division.

For affirmance and remandment -- Justices Clifford, Handler, Pollock, O'Hern and Garibaldi. Opposed -- None. The opinion of the Court was delivered by Clifford, J.


We granted certification, 110 N.J. 289 (1988), to address the circumstances under which a landlord may properly maintain a summary dispossess action for nonpayment of rent against a tenant who fails to abide by new provisions imposed by the landlord in a new leasing arrangement. Although the amount of money involved is little more than $100, facts similar to those of this case will doubtless be repeated, given the current shortage in this state's housing supply and the increasing numbers of people residing in rental dwellings.

The Law Division gave judgment of possession for the landlord. The Appellate Division, in an unreported opinion, modified the judgment and, as modified, affirmed. We reverse.


In October 1984 defendant, Carmen Miranda, entered a lease for possession of an apartment in Newark, which she shared with her minor child. Although the record contains no copy of it, there was apparently a written lease signed by plaintiff-landlord's predecessor in interest. It became the accepted practice under that lease for defendant to pay the landlord or his agent with cash, by hand, after she had received and cashed her monthly public-assistance check, which typically arrived on the third of the month or later. In the event defendant had not yet received or cashed the check, the landlord's agent would return sometime later to receive payment. The original landlord never sought from defendant any late charges or other penalties.

The foregoing practice continued until May 1986, when plaintiff-landlord purchased the building containing defendant's apartment. On the eighteenth of that month plaintiff mailed to defendant a "Notice of Rent Increase' that terminated her tenancy effective August 31, 1986, and offered a new tenancy subject to increased rent and to several changes in the terms and conditions of the lease, among them an increase in defendant's monthly rent and a requirement that the increased rent

be paid on the first of the month by mail only, with a twenty-five dollar penalty assessed as additional rent if it was not paid by the fifth of the month. Acceptance of the new lease and its provisions would be implied, the notice said, by defendant's continued possession of the apartment.

Defendant never formally executed a new written lease with plaintiff but remained in possession of the apartment and paid the increased rent. Under the new arrangement defendant was able to meet her obligation only by cashing her public-assistance check, purchasing a money order, and then mailing it, a procedure that defendant followed dutifully. Nevertheless, during the succeeding six months, four of defendant's payments (September and December 1986, January and February 1987) were received two to four days after the fifth of the month. In each of those months a twenty-five dollar late fee was assessed but not paid. As will be seen, defendant objected to the imposition of the late fees in light of her circumstances, and not to the rent increase itself or to late fees in general.

On February 19, 1987, plaintiff filed a summons and complaint for possession on account of defendant's nonpayment of rent. Specifically, plaintiff sought $470 for payment of February's rent, plus late fees and court fees. It was admitted at trial, however, that plaintiff had received the February rent on February 9, 1987, and that plaintiff was seeking only $100 in late charges and $8.60 in court fees. Thus, at the time of trial, plaintiff's action was based on a claim for the late charges payable as rent under the new terms included in the notice of rent increase, and not for nonpayment of the base rent.

After a summary hearing, the trial court found that defendant had entered into an enforceable agreement to pay the late charges. It entered a judgment for plaintiff that provided that defendant would lose possession of the apartment unless she paid plaintiff $108.60 in late charges and court fees. One day after entry of judgment and at the direction of the court, defendant deposited the $108.60 with the court. The trial court

entered a stay pending appeal, which resulted in the Appellate Division affirming and modifying the judgment so that the complaint for possession was dismissed with the $108.60 remaining due plaintiff.

Defendant and her son continue in possession of the apartment, and no further delinquency problems have been reported. Here, as in the Appellate Division, plaintiff ...

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