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Kearny Court Associates v. Spence

Decided: February 11, 1993.

KEARNY COURT ASSOCIATES, A LIMITED PARTNERSHIP, AND NEW JERSEY REALTY COMPANY, A CORPORATION, PLAINTIFFS-APPELLANTS,
v.
BARRY SPENCE, EDISON RENT CONTROL BOARD AND PAMELA M. PELLEY, DEFENDANTS-RESPONDENTS



On appeal from Superior Court, Law Division, Middlesex County.

Petrella and Keefe.

Per Curiam

Kearny Court Associates, a limited partnership, and New Jersey Realty Company, collectively referred to herein as "Landlord," appeal from the dismissal of their suit in lieu of prerogative writ against the Edison Rent Control Board (Board), and two tenants of Landlord's building.

The Law Division Judge upheld the decision of the Board which determined that Pamela M. Pelley and Barry Spence were tenants who were protected by the township's rent control ordinance, notwithstanding the fact that after they initially became tenants, Spence had been a part-time superintendent at

the apartment complex owned by Landlord, and Pelley had formerly been the wife of Gordon Pelley who had also served as a part-time superintendent.

Landlord argues on appeal that because of the employment as part-time superintendents, the tenants had terminated their initial tenancies with the Landlord and thus had no rights to assert under the rent control ordinance when Landlord terminated their part-time employment at the apartment complex. It also argues that waiver and estoppel should bar the tenant from asserting a remedy under the rent leveling ordinance when the tenant induced the Landlord to enter into an agreement which it would not otherwise have done.

Edison adopted its rent control ordinance on April 25, 1973. Spence became a tenant of Landlord under a written lease on October 1, 1979. On August 15, 1982 he signed the last lease which was to be in effect prior to his becoming an employee of a prior owner of the complex. On October 9, 1982, Spence became a part-time superintendent for part of the apartment complex and functioned in that capacity until April 1984. Spence was allowed to live in his apartment rent-free during the time he was a part-time superintendent, and received $100 per month in salary. The Landlord also agreed to pay his gas and electric bills, as well as telephone toll calls.

In April 1984 Spence's part-time superintendent position was terminated, apparently due to a requirement of the local building department that someone be available full time to grant access to apartments that needed to be inspected. The thenlandlord did not consider Spence a prior tenant because he had been an employee. Spence was told that he could remain in his apartment if he paid rent of $475 per month under a new lease dated April 1, 1984.

The Pelleys had become tenants under a written lease in May 1971 and paid rent until June 1978 when Mr. Pelley was employed as a part-time superintendent under an arrangement similar to that for Spence. Kearny Court Associates became

the owner of the complex in April 1985. Its principal, John Krantz, decided to employ a full-time superintendent and offered Pelley the position. According to Krantz, Pelley turned this offer down because he did not want to leave his employment at Ford Motor Company. Mrs. Pelley contended, however, that the full-time job was never offered to her former husband because Krantz had heard that he was "lazy." She stated that her husband was simply terminated from the part-time position. In any event, Krantz took the position thereafter that he needed the apartment for a full-time superintendent, and told them they would have to vacate the premises. In his testimony, Krantz said that his resistance finally "broke down" after emotional reactions by Mrs. Pelley and he allowed them to remain in the same apartment with the understanding that they would be treated as if they just moved into that apartment. They began paying rent of $590 per month under a new lease dated May 23, 1985.

Subsequently, both Spence and Pelley challenged the amount of rent charged them before the Board. The Board concluded that both Pelley and Spence were protected by the rent control ordinance. ...


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