Norris, McLaughlin & Marcus

Anatomy of a Tenancy Trial

If you are a commercial landlord, then chances are you have a relatively good relationship with your tenants. However, there are instances where a landlord and one of the tenants fall into a toxic relationship, or the tenant simply runs into financial difficulties resulting in nonpayment of rent, forcing the landlord to file an eviction action.

What can a landlord expect to have happen at the trial?

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Property Tax Appeals Can Save Money


One obvious reason for filing a real estate tax appeal is to obtain a lower assessment on your real property and thereby save significant tax dollars. An equally important reason to keep taxes low is to help maintain the value of the property, making it more saleable in the event that the tax appeal is successful.

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Notice Requirements For Eviction (N.J.S.A 2A :18-53)

As I may have mentioned or alluded to in previous posts, commercial landlords are not free to simply evict a tenant once the tenant does something in violation of the lease. At a minimum, in those instances where the tenant has failed to pay rent, a landlord must file a summary dispossess complaint. In cases of defaults other than for the nonpayment of rent, a Notice to Quit and Demand for Possession must first be served on the tenant and the quit date must pass before an eviction complaint may be filed.

The proper service of a Notice to Quit is critical. Without it, the court will not have jurisdiction to hear the tenancy case. Many commercial landlords have seen their cases dismissed at trial based on the improper service (or lack thereof) of a statutorily required Notice to Quit. Below is a chart outlining the various causes for eviction in a commercial setting together with the Notice to Quit requirements for each. I will post later as to some of the issues that crop up relating to these various causes for eviction.

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The Importance of Marshaling Facts Sufficient to Prove Mitigation

Your tenant has just breached its lease and moved out of the premises. You determine that both the tenant or guarantor (if there is one) has assets to pursue, and you proceed into suit.

While the suit is pending, you hire a realtor to market the space, because your lawyer told you that you had to undertake reasonable steps to mitigate your damages. Your listing agreement with the realtor is for an initial term of 6 months, and the listing automatically renews unless either party gives 30 days’ notice of cancellation. Every 6 months, you dutifully renew the listing agreement assuming that the realtor is doing what is reasonable to try and move the space.


By the time you go to trial (over 2 years later), your realtor still has failed to generate a buyer or a tenant. Nevertheless, you and your attorney are confident you will prevail, because, you hired a realtor to re-let or sell the premises, after all.  

At trial, your realtor simply testifies to the usual realtor activity, i.e., placing signs in the windows and online marketing. Although the realtor testifies as to the “asking” price, your attorney fails to elicit any testimony from you or your realtor as to the “fair market” price for the property. At the conclusion of the trial, you are hit with a bombshell: the court has decided to toss your damage claim, because you have failed to prove that your efforts to re-let the premises were reasonable.

What happened?

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What Good Is a Good Guy Guarantee?

One of the negotiating points of any lease deal is whether the tenant will personally guarantee the lease.  Many small start-up businesses are quickly formed with little capital. If the tenant’s business fails, the landlord is left to try and relet the space and maybe pursues the tenant for damages. I say “maybe” only because in many instances pursuing the breaching judgment-proof tenant is an exercise in futility.

An extra level of security, of course, is to have a principal or principals of the tenant personally guarantee the tenant’s performance under the lease.  Many landlords, desirous of leasing space, will only push so hard for a guarantee in these relatively difficult economic times. Informed tenants know this and will resist signing a guarantee. How do you break the impasse?


Good Guys Wear White Hats

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Court Slams Plaintiffs in Interstate Land Sales Full Disclosure Act Case Brought Against Developer

In May 2010, I wrote a post about the serious consequences that could flow from a developer’s violation of the Interstate Land Sales Full Disclosure Act (“ILSA”).

Recently, the Second Circuit Court of Appeals rejected a purchaser’s claim that a developer’s technical violation of ILSA gave the purchaser the right to rescind their contract. In Bacolitsas v. 86th & 3rd Owner, LLC, 702 F.3d 673 (2d Cir. 2012), purchasers sought revocation of their contract with the developer, because it did not contain a description of the lot in a form acceptable for recordation. The Court reversed the District Court and ruled that ILSA only requires that the description of the unit and not the entire contract of sale be in recordable form.  In doing so, the Court recognized the practicalities involved in marketing new condominiums prior to the completion of construction. To accept the purchaser’s position would require all such contracts to be executed after construction was completed. A dubious position to say the least.

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Landlords Are Not Guarantors

Judge Mahlon Fast, J.S.C., a recognized expert in Landlord/Tenant law in New Jersey, recently issued an opinion in Gardens at Maplewood v. Fowlin, stating that a tenant whose apartment was damaged in the “Sandy Superstorm” was not entitled to a rent abatement for the period of time the dwelling is rendered less than habitable as a result of the disaster.

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What Is a Chapter 91 Request?

Guest post by  and Andrew Linden

Pursuant to N.J.S.A. 54:4-34, municipalities may issue to owners of real property what is known as a “Chapter 91” request. This request seeks information pertaining to the taxpayer’s income and expenses for the real property so that the information can be used to assist the tax assessor to determine the following year’s tax assessment and whether the property is “income producing” (meaning generally that a fee is paid to the owner for the continuous and exclusive use of a specific portion of the land or buildings, i.e., rental income). All property owners receiving such a request are required to respond within 45 days.

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Property Tax Appeals Can Save Money

Guest post by 

It’s that time of year, again.  Real property tax appeals are due on April 1, 2013, so the time to review you assessment is now.  Could you be saving money?  Should you file a real estate tax appeal?

One obvious reason for filing a real estate tax appeal is to obtain a lower assessment on your real property and thereby save significant tax dollars. An equally important reason to keep taxes low is to help maintain the value of the property making it more saleable in the event that the tax appeal is successful.

Property owners should review the assessment on their property each and every year to see whether a tax appeal is warranted. This is because the property is not always worth an amount equal to the assessment.  Many owners of industrial, commercial and apartment properties, as well as tenants under net leases, are not aware that they may be prime candidates for successful tax appeals even after looking at their new assessment.

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Christie Announces Post-Sandy Rebuilding Regulations

“It is absolutely critical that we take this opportunity to rebuild New Jersey smarter and stronger in the aftermath of Sandy. That’s why today I am approving emergency regulations being proposed by the DEP (Department of Environmental Protection) to help fast-track the rebuilding process,” said Gov. Chris Christie yesterday as he signed emergency regulations to adopt the Federal Emergency Management Agency’s (FEMA) updated Advisory Base Flood Elevation maps as the rebuilding standard for the entire state. These regulations establish requirements and more efficient procedures for residents and businesses to construct, reconstruct, relocate and elevate buildings and other structures in flood hazard areas. “Using the best available science and data as reflected in these advisory maps will give families, businesses, and communities the best assessment of their risk – allowing them to better mitigate damage from future flood events, avoid higher flood insurance costs, and begin the rebuilding process immediately.”

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