A Landlord trying to evict a Tenant in New Jersey knows it is a difficult process.  If the New Jersey State Assembly and State Senate have their way it could also become more expensive.  The Bill being referenced is a proposed supplement to Title 2A of the New Jersey Statutes, Assembly Bill A3851 and Senate Bill S2018.  Most recently, the Senate Bill replaced the Assembly Bill and is now the one both houses of the legislature are using.

What Does the Bill Say?

The Bill itself is to level the playing field when it comes to cost of attorneys fees and expenses in disputes between New Jersey landlords and tenants.  If this bill is adopted, courts are to imply that a parallel covenant exists: 

[I]f a residential lease agreement provides that the landlord is or may be entitled to recover either attorney’s fees or expenses, or both, incurred as a result of the failure of the tenant to perform any covenant or agreement in the lease, or if the lease provides that such costs may be covered as additional rent.

(S2018).

The court can only award such fees or expenses if the Tenant is successful in “any action or summary proceeding commenced by the landlord against the tenant, arising out of an alleged failure of the tenant to perform and covenant or agreement in the lease . . . .” (S2018).

Such an award of fees would also be permitted for any action brought by the Tenant against the Landlord for a breach by the Landlord of any covenant or agreement in the lease agreement. (S2018).

Are There Any Limits To the Expenses?

While it would appear on its face that the Legislature added another burden to the expenses associated with being a Landlord, there are a few items in the proposed Bill that would limit such expenses.  The first is that this would only apply if the Tenant succeeds in defending the Landlord’s action, or is successful in an action where the Tenant is the Plaintiff.  The second is that such expenses are only awarded if there is language in the Lease Agreement that allows for the Landlord to collect expenses associated with a law suit.  And lastly, the court is only allowed to award such fees and/or expenses as they were actually and reasonably occurred.  This award can either be paid as a credit against future rent or as money damages.

Conclusion

On its face this seems like another hurdle placed between a Landlord and an unruly Tenant.  Added to this new burden is the fact that a Landlord cannot put in the lease agreement language that would bypass this new law.  Furthermore, if this legislation is passed a Landlord that includes language stating that the Landlord can collect attorney’s fees and/or expenses must also include in 14-point bold point type the following clause:

IF THE TENANT IS SUCCESSFUL IN ANY ACTION OR SUMMARY PROCEEDING ARISING OUT OF THIS LEASE THE TENANT SHALL RECOVER ATTORNEY’S FEES OR EXPENSES, OR BOTH, FROM THE LANDLORD TO THE SAME EXTENT THE LANDLORD IS ENTITLED TO RECOVER ATTORNEY’S FEES OR EXPENSES, OR BOTH AS PROVIDES IN THIS LEASE.

(S2018).

It must be noted that there are some safeguards for a Landlord as well.  If a Landlord brings a summary proceeding for non-payment of rent, and in the interim the Tenant pays the Landlord the rent, such a payment will not be deemed a successful defense to the summary proceeding requiring the court to award fees and expenses to the tenant.  Furthermore, the legislation excludes from the definition of fees and expenses “personal expenses for travel, reimbursement for missed work time, or child care.” (S2018).  Furthermore, as currently written this language will only apply to all new lease agreements following the first month of passage.

While this legislation has not passed yet, the bill has gone through several revisions in the both the New Jersey Assembly and the Senate.  That the Assembly adopted the Senate’s version makes it more likely that it will be passed by both and given to the Governor to sign.  A landlord in New Jersey should contact an attorney to make sure that their lease agreements are compatible with the law.