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East Coast Fairways Apartments, LLC v. Leach

Superior Court of New Jersey, Appellate Division

June 27, 2013

ETTA LEACH and ALVARO ALBUQUERQUE, Defendants-Appellants.


Argued November 14, 2012

On appeal from Superior Court of New Jersey, Law Division, Camden County, Docket No. LT-8261-11.

Sonia Bell argued the cause for appellants (South Jersey Legal Services, Inc., attorneys; Ms. Bell, on the brief).

Tracey Goldstein argued the cause for respondent (Feinstein, Raiss, Kelin & Booker, attorneys; Ms. Goldstein, on the brief).

Before Judges Lihotz, Ostrer and Kennedy.


Defendants appeal from an order of the Special Civil Part granting judgment of possession to plaintiff, their landlord, on its complaint for eviction under N.J.S.A. 2A:18-61.1(i), which alleged defendants "refus[ed] to accept reasonable changes in the terms of [their] lease at lease renewal."[1] We reverse and remand.


On September 1, 2005, defendants began their occupancy of a residential apartment at the Fairways apartment complex in the Blackwood area of Gloucester Township, pursuant to a written lease. Thereafter, they continued to reside at that complex without interruption and, except for rent increases approved by the municipal Rent Control Board, the terms of their written lease, which was renewed yearly, never changed. Plaintiff acquired the property in 2007.

On June 20, 2011, plaintiff delivered to defendants a notice to quit and vacate the apartment on August 31, 2011 – the date of the expiration of their lease. The notice stated, however, that plaintiff was offering defendants a "renewal term" and that "[a]s a condition of renewal, all residents are required to sign a new lease, which is enclosed with this letter. Automatic renewal of your prior lease is not an option. If you wish to renew, you must sign this letter and the lease and return both documents to the office by 7/26/2011." Enclosed with the notice was the new lease, an insurance addendum, a "bedbug" addendum, a "Resident Safety Awareness" form with lines for tenant signatures, and a notice that tenants, if they chose, could secure "personal liability insurance" required by the lease, through a program arranged by plaintiff.

Defendants engaged counsel who forwarded correspondence to plaintiff on July 25, 2011, explaining defendants would sign the lease, but "had some objection to terms in the [new] lease." Plaintiff's counsel responded on July 28, 2011, by sending defendants a "Notice to Quit and Demand for Possession" terminating their lease as of August 31, 2011, for "failure to accept reasonable changes in terms of lease at lease renewal[, ]" pursuant to N.J.S.A. 2A:18-61.1(i).[2]

On September 6, 2011, plaintiff filed a two-count complaint for eviction against defendants. The complaint recited the facts set forth above and stated, "[d]efendant[s] failed to renew the lease or give notice to vacate by the expiration of the lease term" and "expressed an unwillingness to accept reasonable changes to the lease terms." Plaintiff demanded judgment of possession.

The first trial date was adjourned by the judge to allow the parties to try to settle their differences. When the parties could not reach agreement, the case was called for trial on October 6, 2011. A property manager for plaintiff testified briefly about the sequence of events and the judge received into evidence the old lease, the proposed new lease and the notice to quit. Defendant Alvaro Albuquerque also testified and stated his objections to paragraphs 9, 10, 11, 12, 15, 17, 19, 20, 21 and 25 of the new lease, and to the bedbug and insurance addendums.

Briefly, defendant Albuquerque proffered objections to the following provisions in the new lease[3]:

(a) New lease paragraph 9 allows the landlord "and anyone allowed by the landlord" to enter the apartment "after first notifying" tenant, and if tenant were unavailable "during normal business daytime hours" landlord may enter in the tenant's absence;
(b) New Lease paragraph 10 allows landlord to increase rent or change terms of lease if landlord sends written notice of the changes to tenant at least seventy five days before the end of the term; tenant must reject at least sixty days before end of term, or lease automatically renews with new terms. Hold-overs pay double the last monthly rent.
(c) New lease paragraph 11 requires written notice and other conditions for tenant to invoke a "lease buyout."
(d) New lease paragraph 12 provides that the landlord is "not responsible for any damage to [tenant's] personal property" and tenant must obtain "'renter's' insurance" to protect his or her personal property.
(e) New lease paragraph 15 provides, among other things, that if tenant "breaches this lease, " landlord may "[t]o the extent allowed by law . . . discontinue any utility services to the leased unit."
(f) New lease paragraph 17 provides, among other things, that "Landlord will not reduce the rent if there is fire or other damage. Landlord will decide whether the leased unit cannot be lived in due to damage." Further, if the unit becomes uninhabitable for any reason, the lease will end when tenant pays all rent to date of vacating the leased unit. Landlord is "not responsible for any loss, damage or inconvenience" to tenant caused "by fire or other cause."
(g) New lease paragraph 19 provides landlord is "not responsible" for injury or damage to tenants or tenant's guests, and tenant "releases" landlord from responsibility for injury or damage "caused by any other person occupying the [p]roperty." All claims against landlord for injury or damage are "expressly waived" by tenant, unless the injury or damage was "directly and solely caused" by landlord or its agents or employees.
(h) New lease paragraph 20 provided that the lease is subordinate to "any future financing, loans or leases on the building and land."
(i) New lease paragraph 21 provides that the parties "give up their right to trial by jury" in "any action . . . for any matter concerning the [a]greement or the [p]remises."
(j) New paragraph 25, dealing with mold, among other things, requires tenant to "remove any visible moisture accumulation" in the leased unit and provides that tenant "shall be solely responsible and liable" for damages sustained to the property or to themselves caused by tenant's failure to comply with the lease.

The "insurance addendum" required tenant to purchase "$100, 000 per occurrence liability insurance" and the "bedbug addendum" required tenant to remove clutter, avoid using secondhand or rental furnishings, cover mattresses and box-springs with "zippered vinyl coverings[, ]" "arrange furniture to minimize bedbug hiding places" and to take other measures. Also, the tenant agreed to "indemnify and hold harmless" the "Owner/Agent" from any damages or losses the owner or agent may incur resulting from a bedbug infestation.

Many of these provisions were not set forth in the earlier written lease, and plaintiff's counsel conceded that some provisions were not "enforceable in New Jersey." Also, some of the provisions were contained in the earlier lease, albeit in different words. Plaintiff's counsel stated the new lease was issued by plaintiff in order to make its leases uniform for its multi-state properties.

On November 22, 2011, the trial judge issued a three-and-one-half page letter setting forth the judge's "comments" and noting, "both lawyers have agreed that the Court will review the new [l]ease and accept, reject or modify in accordance with the standard of reasonableness." The judge thereafter suggested a few changes in wording in some of the provisions, found others "acceptable" and expressed concern about the meaning of others. With respect to the "bedbug" addendum, the judge stated he would not "spend another couple of hours reviewing the language there. It's not my duty to give legal advice." The judge's letter did not address all the objections made by defendants, and, further, made no reference to the standards of reasonableness employed by the judge. The letter concluded as follows:

In any event, you have my comments regarding the reasonableness. I assume that the parties will get this resolved. . . . If not, I'll make the decision and the Appellate Division can be the next step.

Plaintiff thereafter presented a revised lease to defendants which incorporated most of the changes suggested by the judge.[4] Defendants claimed the revised lease was still unreasonable, and, in another letter dated December 13, 2011, the judge disagreed and stated, "I have made suggestions which have been incorporated in the new [l]ease. . . . I have determined the revised lease is a reasonable proposal[.]" The judge gave defendants until December 22, 2011, to accept the "revised" new lease or a judgment of possession would be entered. Judgment of possession was entered on December 22, 2011, and this appeal followed.

II. Defendants argue on appeal that the "revised" lease, which incorporated some of the suggestions made by the trial judge, is still unreasonable. Defendants contend that the trial judge never addressed several of the changes they challenged, and that the revisions he suggested did not obviate the problems they originally raised.[5]

The problem we face in this appeal is that the trial judge has not made "detailed factual findings" and has not "related [those findings] to the applicable law." 447 Assocs. v. Miranda, 115 N.J. 522, 535 (1989). Further, while we appreciate the trial judge's effort to, in effect, mediate the conflict between the parties by suggesting and drafting revisions to the new lease, we are constrained to observe that his role was to decide whether plaintiff had met its burden of proof under the law, and, if not, fashion an appropriate remedy. The trial judge's efforts to rewrite the lease for the parties is not part of his role and is fraught with problems, such as those that arose here. While suggesting revisions to a proposed lease in a case like this may be appropriate as part of a settlement conference, it is certainly not appropriate where the judge has already undertaken a bench trial. Cf. Liteky v. U.S., 510 U.S. 540, 563, 114 S.Ct. 1147, 1162, 127 L.Ed.2d 474, 495-96 (1994) ("A judge may find it difficult to put aside views formed during some earlier proceeding"). The trial judge's actions here impair our confidence in his conclusions.

In an effort to aid review on remand, we briefly recite the principles of law that should guide the trial court's analysis in cases like that before us. This action arose under the Anti-Eviction Act, N.J.S.A. 2A:18-61.1 to —61.12 (the Act). We explained in Fromet Props., Inc. v. Buel, 294 N.J.Super. 601, 608 (App. Div. 1996), that the Act was adopted

in 1974 to deal with a "severe shortage of housing statewide, a shortage that continues to exist today." 447 Assocs., [supra, ] 115 N.J. [at 527] (citing A.P. Dev. Corp. v. Band, 113 N.J. 485, 492 (1988)). The Anti-Eviction Act was "designed to limit the eviction of tenants to 'reasonable grounds' and to provide for 'suitable notice' of tenants in the event of an eviction proceeding." 447 Assocs., supra, 115 N.J. at 527 (citing A.P. Dev. Corp. v. Band, supra, 113 N.J. at 492). The Anti-Eviction Act is remedial legislation, establishing tenants' rights to continued occupancy of their rental dwellings, and is "deserving of liberal construction." 447 Assocs., supra, 115 N.J. at 529 (citing A.P. Dev. Corp. v. Band, supra, 113 N.J. at 506; Cima v. Elliott, 224 N.J.Super. 436 (Law Div. 1988); Royal Assocs. v. Concannon, 200 N.J.Super. 84, 93 (App. Div. 1985)).

In the statement attached to the Act when it was proposed to the Assembly, it was observed that "residential tenants frequently have been unfairly and arbitrarily ousted from housing quarters[, ]" and that the Act "shall limit the eviction of tenants by landlords to reasonable grounds[.]" Statement to Assembly Bill No. 1586, enacted by L. 1974, c. 49.

N.J.S.A. 2A:18-61.1(i) provides that there is "good cause" for removal of a tenant when

[t]he landlord or owner proposes, at the termination of a lease, reasonable changes of substance in the terms and conditions of the lease, including specifically any change in the term thereof, which the tenant, after written notice, refuses to accept[.]

The landlord bears the burden of proof with regard to the reasonableness of any proposed lease changes. 447 Assocs., supra, 115 N.J. at 530-31; Hale v Farrakhan, 390 N.J.Super. 335, 340 (App. Div. 2007); Vill. Bridge Apartments v. Mammucari, 239 N.J.Super. 235, 240 (App. Div. 1990).

In 447 Assocs., supra, the Supreme Court considered a claim by a tenant that a renewal lease presented by the new owner of her building, which required rent payments be made by mail on the first of each month with a late fee assessed as additional rent where payments were not made by the fifth of the month, violated the Act. 115 N.J. at 526. The tenant asserted that she received her monthly public-assistance check on the third day of the month, and that it had been the "accepted practice" of the prior owner to allow her to cash that check and pay the rent by hand-delivering cash to the landlord's on-site agent. Id. at 525. The new lease, requiring payment by mail on the first of each month, was unreasonable, she maintained, because her circumstances almost guaranteed that she would be subject to late fees each month. Id. at 527.

The Supreme Court agreed and reversed the trial court's judgment for possession based upon the defendant's failure to pay four months of late fees. The Court explained,

In interpreting the reasonableness of a lease change, courts have properly looked to the circumstances of the case and to the interests of both the landlord and the tenant. See Young v. Savinon, 201 N.J.Super. [1, ] 6-7 [(App. Div. 1985)]; Royal Assocs. v. Concannon, 200 N.J.Super. [84, ] 90-91[(App. Div. 1985)]; Housing Auth. of City of E. Orange v. Mishoe, 201 N.J.Super. 352, 359 (App. Div. 1985). Contra Terhune Courts v. Sgambati, 163 N.J.Super. [218, ] 222 [(Cty. Ct. 1978), aff'd, 170 N.J.Super. 477 (App. Div. 1979)]. "Each case must be governed by its own facts. The result must be just and fair to the landlord as well as the tenant." Calhabeu v. Rivera, 217 N.J.Super. [552, ] 555 [(Law. Div. 1987)] (quoting Berzito v. Gambino, 63 N.J. 460, 470 (1973)); cf. R & D Realty v. Shields, 196 N.J.Super. [212, ] 220 [(Law. Div. 1984)] (reasonableness of lease change determined by reference to applicable public housing statute)
[Id. at 534.]

The Court added that,

landlords and owners must take the totality of those circumstances into account when making changes in the material terms or conditions of leases, and must avoid the imposition of changes that will cause undue hardship to tenants attempting in good faith to meet their rent obligations. Here, for example, defendant's payments were always mailed by the third of the month, but received sometimes as late as the ninth. The landlord could well have avoided difficulty with defendant by setting a deadline more realistically tailored to the needs of defendant, who was probably not plaintiff's only tenant receiving public assistance. By imposing a late fee on the fifth of the month, a deadline defendant was plainly incapable of meeting regularly without allowance for payment by hand, the landlord effectively increased defendant's rent by the amount of the penalty fee.

[Id. at 535.]

Finally, the Court explained that,
in reviewing cases founded on challenges to lease changes, it will be important for trial courts both to examine the manner by which the lease changes were accomplished and to weigh the arguments supporting the lease changes as against tenants' claims of hardship. The trial court should make detailed factual findings and relate them to the applicable law.


The failure of a landlord to prove that the changes in a proposed new lease are all reasonable is a sufficient ground to warrant dismissal of an eviction complaint under N.J.S.A. 2A:18-61.1(i) for lack of jurisdiction. See Sudersan v. Royal, 386 N.J.Super. 246, 251 (App. Div. 2005).

In the case before us, because the trial judge did not make "detailed fact findings and relate them to the applicable law[, ]" 447 Assocs., supra, 115 N.J. at 535, we are constrained to reverse and remand this matter to the Special Civil Part. The failure of the trial judge to make findings of fact and set forth his conclusions of law violates Rule 1:7-4(a). The critical importance of adhering to the requirements of this rule cannot be overemphasized. Not only is such a failure a disservice to the litigants and the appellate court, Curtis v. Finneran, 83 N.J. 563, 569-70 (1980), but it also interferes with the discharge of our appellate duties. Here, we cannot discern the basis of the trial court's conclusions. See In re Commitment of M.M., 384 N.J.Super. 313, 332 (App. Div. 2006) ("[W]ithout findings relevant to the legal standards the litigants and the reviewing court 'can only speculate about the reasons' for the decision." Rosenberg v. Bunce, 214 N.J.Super. 300, 304 (App. Div. 1986)). Not only did the trial judge fail to address every provision in the proposed new lease challenged by defendants, but also the trial judge failed to explain his conclusions by relating them to the standards of reasonableness governing N.J.S.A. 2A:18-61.1(i). See generally 447 Assocs., supra, 115 N.J. at 534-35. We are thus required to reverse the determination of the court and remand the matter. Foley, Inc. v. Fevco, Inc., 379 N.J.Super. 574, 589 (App. Div. 2005).

The judgment of possession is reversed and the matter is remanded to the Special Civil Part for further proceeding consistent with this opinion

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