On appeal from the Superior Court of New Jersey, Law Division, Special Civil Part, Bergen County.
O'Brien, Scalera and Keefe. The opinion of the court was delivered by Keefe, J.A.D.
Plaintiffs Vincent and Joan Surace appeal from a judgment dismissing their complaint for possession after the Law Division judge concluded that the subject building was governed by the "good cause" provisions of the Anti-Eviction Act (Act), N.J.S.A. 2A:18-61.1, and that the renovation of the premises subsequent to its purchase, reducing the number of rental units, did not remove the defendant tenant's preexisting protection under the Act. We affirm the judgment entered in favor of the defendant. However, for the reasons stated herein, we do not completely endorse the views expressed by the Law Division judge in his reported opinion at 236 N.J. Super. 81, 564 A.2d 134 (Law Div.1989).
Plaintiffs purchased the property at 2191 McKay Avenue, Fort Lee, New Jersey in 1985. At that time the building
contained five occupied residential units -- two in the basement and three on the first floor. Defendant Clara Pappachristou who had been a month to month tenant on the premises since 1976 was then, and still is, occupying one of the three units on the first floor.
The prior owner did not occupy any of the five units. According to the testimony of plaintiff Vincent Surace, one of the basement units became vacant within three months of the purchase. Plaintiffs' family moved into that unit. Subsequently, the other basement tenant moved out after receiving a moving allowance or other payment from plaintiffs. Plaintiffs removed the partition separating the two basement units and utilized the entire space for their family. The same type of scenario occurred several months thereafter with respect to the first floor tenant who occupied the three room middle unit. Plaintiffs then opened up a stairway from the basement to that unit which was then utilized by plaintiffs' family as a living room, dining room and eat-in kitchen.
Plaintiffs then decided that they wanted defendant's unit for further expansion of their family quarters and served defendant with a notice to quit.*fn1 When defendant failed to surrender possession of the premises this dispossess action commenced.
Plaintiffs contend that they have the right to proceed under N.J.S.A. 2A:18-53(a) on the grounds that defendant is simply a holdover tenant. Plaintiffs admit in their appellate brief that there is an absence of cause for evicting defendant under the Anti-Eviction Act but argue that they are exempt from its provisions because the Act excludes "owner-occupied premises
with not more than two rental units" and at the time the dispossess proceeding was filed their premises clearly met that definition.
The trial judge essentially found that the statutory words, "owner-occupied premises with not more than two rental units," exempted only a two family house where the owner occupied one of the two units but did not exempt a three residential unit building such as plaintiffs'. 236 N.J. Super. at 87-88, 564 A.2d 134. That interpretation is contrary to the plain meaning of the statute. We endorse, instead, Judge Meehan's analysis of the subject phrase as explicated by him in Sheehan v. Rocco, 243 N.J. Super. 673, 581 A.2d 134 (Law Div.1990). He concluded, as do we, that:
Owner-occupied with no more than two rental units means that the owner-occupant must reside in one residential unit and there be not more than two residential units that are rented for a total of no more than ...