SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
A-2249-94T5
VANDER STERRE BROS.
CONSTRUCTION, a New Jersey
Partnership,
Plaintiff-Appellant,
v.
MILDRED KEATING,
Defendant-Respondent.
___________________________________
Argued: September 13, 1995 - Decided: October
17, 1995
Before Judges King, Landau and Humphreys.
On appeal from the Superior Court of New
Jersey, Law Division, Bergen County.
Darryl W. Siss argued the cause for appellant
(Jeffer, Hopkinson, Vogel & Peiffer,
attorneys; Mr. Siss and David H. Altman, on
the brief).
Thomas Ludwig argued the cause for respondent
(Mr. Ludwig, on the brief).
The opinion of the court was delivered by
KING, P.J.A.D.
None of our cases directly address whether an owner of an apartment constructed as an intended condominium unit is required to give a new tenant the formal notice specified in N.J.S.A. 2A:18-61.9 of the Anti-Eviction Act (AEA).
Plaintiff-landlord here sought to evict defendant-tenant who
rented an apartment in a condominium building. The landlord
desired to convey the apartment unit as a condominium unit under a
contract of sale to a third party. We conclude that the statutory
notice required by N.J.S.A. 2A:18-61.9 should have been given at
the inception of the tenancy, even though the apartment building
was originally constructed for condominium use and was not a
conversion from preexisting apartment use. Absent a proper
statutory notice to the tenant, the three-year notice provision of
N.J.A.C. 5:24-1.9(b) controls.
Defendant Mildred Keating moved into an apartment on South Irving Street in Ridgewood in early September 1984. She began occupancy under an oral agreement to live in the apartment for one year. During 1985 she signed a one-year lease, for a term from September 1, 1985 to August 31, 1986. After this lease expired, the defendant signed annual leases with similar provisions, except for rent increases.
In 1984, when she moved into the apartment, defendant received no written notice about potential sale. She could not recall the landlord telling her anything about the unit's proposed status, although she remembered an exterior sign identifying the building as a "condominium."
The first lease which Keating signed in 1985, and we presume all later leases, included this provision, typed in the form lease as the final paragraph:
Tenants expressly recognize that Landlord
shall have the right to show the premises to
prospective purchasers thereof during the term
of the Lease. Should the premises be sold by
the Landlord, [sic] any sale shall expressly
be subject to the tenancy; Tenants, however,
expressly recognizing that at the expiration
of the Lease term (i.e. August 31, 1986) any
owner of the premises shall have the right to
occupy same upon giving the Tenants a 30-day
notice of the termination of the tenancy.
On July 6, 1994 defendant received the landlord's letter notifying
her that it, as owner and landlord, "has entered into a contract
for sale of the property which requires that the property be vacant
as of the date of closing which is August 31, 1994." The
landlord's letter also advised the defendant that refusal to vacate
would result in a "dispossess action."
On September 13, 1994 the landlord filed a summary dispossess
action. After a trial in November 1994 the judge ruled that the
landlord was obligated to provide notice under N.J.S.A. 2A:18-61.9
and did not do so. The judge dismissed the complaint for eviction
and the landlord appeals.
We conclude that the judge did not err in finding that
N.J.S.A. 2A:18-61.9 applied. The statutory notice of potential
conversion should have been given to defendant when her tenancy
began. See also N.J.A.C. 5:24-1.9(a).
The landlord stresses that this apartment unit was built as a condominium and was not a conversion from a rental apartment to a condominium. It claims that the reasons for the statutory notice are thus inapplicable.
We will accept the contention that the apartment unit was
built as a condominium. Nonetheless, we conclude that the notice
provision applies in this circumstance. The statute leaves no
latitude for a judicial construction which excuses failure to give
the specified notice. This portion of the AEA, N.J.S.A. 2A:18-61.1
to 6.12, states:
Any owner who establishes with a person
an initial tenancy after the master deed or
agreement establishing the cooperative was
recorded shall provide to such person at the
time of applying for tenancy and at the time
of establishing any rental agreement a
separate written statement as follows:
THIS BUILDING (PARK) IS BEING
CONVERTED TO OR IS A CONDOMINIUM OR
COOPERATIVE (OR FEE SIMPLE OWNERSHIP
OF THE SEVERAL DWELLING UNITS OR
PARK SITES). YOUR TENANCY CAN BE
TERMINATED UPON 60 DAYS' NOTICE IF
YOUR APARTMENT (PARK SITE) IS SOLD
TO A BUYER WHO SEEKS TO PERSONALLY
OCCUPY IT. IF YOU MOVE OUT AS A
RESULT OF RECEIVING SUCH A NOTICE,
AND THE LANDLORD ARBITRARILY FAILS
TO COMPLETE THE SALE, THE LANDLORD
SHALL BE LIABLE FOR TREBLE DAMAGES
AND COURT COSTS."
The parenthesized words shall be omitted
or substituted for preceding words where
appropriate. Such statement shall also be
reproduced as the first clause in any written
lease provided to such person.
[N.J.S.A. 2A:18-61.9.]
Regulations of the Department of Community Affairs (DCA), charged by N.J.S.A. 2A:18-61.12 with adopting rules and regulations
for implementation of the AEA, also state that the capitalized
statement "must be included as the first clause of any written
lease" in addition to the written notice given at the time of
applying for or establishing rental. N.J.A.C. 5:24-1.9(a).
The landlord's position rests on the assertion that we should
find a legislative intent not to require this notice for a tenant
who rents an apartment originally built as a condominium. The
landord claims that the statutory notice set out in capitals "is
limited to conversion buildings and tenants" and does not apply to
"new construction."
We consistently have expressed the strong public policy
against dispossession except upon strict compliance with the notice
and procedural requirements of the AEA. Montgomery Gateway v.
Herrera,
261 N.J. Super. 235, 241 (App. Div. 1992); Bayside
Condominium, Inc. v. Mahoney,
254 N.J. Super. 323, 325 (App. Div.
1992); Housing Authority v. Williams,
263 N.J. Super. 561, 564 (Law
Div. 1993). "Strict compliance" means "punctilious" observation of
all of its provisions, including the notice provisions. Weise v.
Dover General Hospital,
257 N.J. Super. 499, 504 (App. Div. 1992)
(citing Sacks Realty Co. v. Batch,
248 N.J. Super. 424, 426 (App.
Div. 1991)).
A landlord fails to demonstrate strict compliance where the
notice is defective in any particular from the statutory
requirements; such notice is ineffective regardless of the
landlord's good faith, the absence of prejudice to the tenant, and
the lack of offense to the AEA's expressed policy. Weise, supra,
257 N.J. Super. at 504; Aspep Corp. v. Giuca,
269 N.J. Super. 98,
102 (Law Div. 1993). Absent strict compliance with the
requirements of the AEA, a court is without jurisdiction to
entertain a summary dispossession action. Bayside, supra, 254 N.J.
Super. at 326-27; 809-811 Washington St. v. Grego,
253 N.J. Super. 34, 42 (App. Div. 1992); Ashley Court Enterprises v. Whittaker,
249 N.J. Super. 552, 556 (App. Div. 1991).
The landlord did not meet the statutory standards. Most
glaring is the failure to provide written notice in the form
required by N.J.S.A. 2A:18-61.9 when defendant's tenancy began, or
one year later when her lease was executed. Not only is the
capitalized notice not in the lease, the clause in the lease which
states that the landlord may show the apartment for sale is the
last provision in the lease, not the first as the statute requires.
Nor does the record demonstrate that the condominium will be
sold to an owner-occupant. No witness so testified, nor does the
contract of sale so provide; it simply recites that the buyer is
entitled to possession "and any rents or profits." In addition,
although there was no disagreement in the record with plaintiff's
assertion that the apartment was built as a condominium, the record
does not specifically include evidence that the apartment building
is a condominium nor, more significantly, evidence of when the
master deed was filed. The recording of the master deed makes an
apartment a condominium. 316 49 Street Associates v. Galvez,
269 N.J. Super. 481, 483 (App. Div.), certif. denied,
137 N.J. 164
(1994) (citing N.J.S.A. 46:8B-8 and Veltri v. Norwood,
195 N.J.
Super. 406, 413 (App. Div. 1984)).
The landlord confronts a formidable challenge in attempting to
persuade us to judicially minimize protections afforded tenants
under the AEA, which has repeatedly been recognized as premised on
a strong public policy to protect tenants. As for plaintiff's
insistence that the notice provision was not intended to apply to
a building originally constructed as a condominium, the clear text
of the statute defeats such a construction. An owner has "good
cause" for which eviction may be granted where:
The owner of a building or mobile home park,
which is constructed as or being converted to
a condominium, cooperative or fee simple
ownership, seeks to evict a tenant or
sublessee whose initial tenancy began after
the master deed, agreement establishing the
cooperative or subdivision plat was recorded,
because the owner has contracted to sell the
unit to a buyer who seeks to personally occupy
it and the contract for sale calls for the
unit to be vacant at the time of closing.
However, no action shall be brought against a
tenant under paragraph (1) of this subsection
unless the tenant was given a statement in
accordance with section 6 of P.L. 1975, c. 311
(C. 2A:18-61.9);
[N.J.S.A. 2A:18-61.1(l)(1) (emphasis added).]
We have long recognized the legislative history of the AEA makes clear that eviction of a tenant in occupancy of a condominium may "proceed only in accordance with new provisions of this act." Veltri, supra, 195 N.J. Super. at 411. The clear text of the statute mandates the giving of notice in accordance with N.J.S.A.
2A:18-61.9 to a tenant who leases an apartment unit in a building
eventually intended as a condominium.
Our affirmance on this point presents the practical problem of
the eviction remedy available to the landlord, if any. If the
owner has a contract for sale with a person who will occupy the
premises, the owner meets the jurisdictional prerequisite for
eviction of the tenant except as to notice, which cannot be
retroactively provided to the tenant. In Bayside, supra, 254 N.J.
Super. at 327, we recognized that the tenants had not received the
required notice under N.J.S.A. 2A:18-61.9, a jurisdictional
prerequisite even though the plaintiff-landlord was not the owner
of the property when the tenancy began. The effect of strict
compliance with the notice provision could give the tenants "an
effective life estate." Ibid.
The trial judge in Bayside, id. at 328, avoided this
undesirable life-tenancy consequence by anticipating that, if the
plaintiff obtained an agreement of sale with a buyer who would
personally occupy the unit, the plaintiff would be entitled to
judgment for possession under N.J.S.A. 2A:18-61.1(l)(1) after sixty
days notice. We were not sanguine at this prospect, we said that
this solution was not "foreordained" but must be resolved in the
future, if a case with the appropriate facts so required, by
evaluating principles of statutory construction and public policy.
Ibid.
In the circumstances of this case, which presents the issue
which we anticipated but did not resolve in Bayside, we find that
the landlord cannot obtain a judgment for possession on a sixty-day
notice only. Without the statutorily required notice, defendant's
situation is akin to that of a pre-conversion tenant who occupies
a building which the owner converts to a condominium during the
tenancy, and who must be given three years notice before a judgment
for possession may be obtained by the landlord.
This is the regulatory conclusion reached by DCA, the agency
charged with implementing this statute. In a provision not
mentioned in the parties' briefs, a DCA regulation presents the
common-sense solution in this situation:
If a tenant whose tenancy began after the
conversion was initiated and was not given
proper notice as provided in (a) above, the
tenant will have the right to a three year
notice as provided for in the previous portion
of these regulations.
[N.J.A.C. 5:24-1.9(b).]
The notice alluded to in section (a) of N.J.A.C. 5:24-1.9 is
the statutory notice required under N.J.S.A. 2A:18-61.9. The
three-year notice "in the previous portion" refers to the
regulations which track the legislative requirement that a pre-conversion tenant is entitled to three years' notice of eviction,
as opposed to the mere sixty days' notice provided for a tenant
whose tenancy began after the apartment was established as a
condominium and who was given notice at the time the tenancy began.
See N.J.S.A. 2A:18-61.8; N.J.A.C. 5:24-1.3(a) and (b).
Providing defendant with a three-year notice, consistent with
this regulation, is less onerous for landlords than earlier
judicial resolutions. In Sacks Realty, supra, 248 N.J. Super. at
426, we found there was no jurisdiction to consider a dispossession
complaint where, although the landlord gave the tenants actual
notice, the landlord failed to give the DCA-form notice at the time
tenants were informed of the intent to remove the apartments from
the rental market but did so only when it began eviction
proceedings. The landlord's good faith and lack of actual
prejudice to the tenants or to public policy notwithstanding, we
refused to find that "substantial compliance" met the strict
compliance standard imposed by the AEA. Ibid.
Similarly, in Sibig & Co. v. Santos,
244 N.J. Super. 366, 368
(App. Div. 1990), we refused to find sufficient notice where the
landlord notified tenants that it intended to commence proceedings
to obtain possession in three years, instead of telling them their
tenancies would end three years hence. Although three years had
passed, the landlord in Sibig was required to submit to a new
three-year period, with a notice which strictly complied with the
AEA. The deviations from the AEA notice provisions in Sacks and
Sibig were at least as innocent and arguably as non-prejudicial as
the failure to give a tenant the required notice here.
The notice required by N.J.S.A. 2A:18-61.9 to the tenant at
the inception of her tenancy and in the first paragraph of her
lease was jurisdictional. Failure to give a tenant such notice
bars a court from entering a judgment for dispossession under the
provisions for sixty-day notice of eviction under N.J.S.A. 2A:18-61.1(l)(1) and N.J.S.A. 2A:18-61.2(f). We hold that any
dispossession action by plaintiff must be preceded by the three-year notice described in N.J.S.A. 2A:18-61.1(k) and N.J.S.A. 2A:18-61.2(g) and made applicable in these circumstances by the DCA in
N.J.A.C. 5:24-1.9(b).
Consistent with the policy of affording broad protection to
tenants while giving landlords a way to remove rental units from
the market, we continue to require strict compliance with the AEA's
provisions before accepting jurisdiction to consider a
dispossession complaint.
As recognized by the Legislature, housing
shortages in the State have led to
"unfortunate attempts to displace tenants
employing pretexts, stratagems or means other
than those provided pursuant to the intent of
State eviction laws designated [sic] to fairly
balance and protect rights of tenants and
landlords." N.J.S.A. 2A:18-61.1a(b). It is
in the "public interest of the State to
maintain for citizens the broadest protections
available under State eviction laws to avoid
such displacement and resultant loss of
affordable housing. . . ." N.J.S.A. 2A:18-61.1a(d). The protection afforded by N.J.S.A.
2A:18-61.1e responds in part to these
concerns. To be sure, there is no evidence of
any bad faith on the part of Dover here. But
even so, we think nothing short of strict
compliance is required.
[Weise, supra, 257 N.J. Super. at 505.]
Plaintiff contends that Bayside, supra, 254 N.J. Super. at 328, permits this dispossession action to proceed in order to avoid granting an effective life estate to its tenant. But Bayside merely said that considerations of public policy and statutory construction would guide a court's decision when the issue properly
arose. Ibid. The strongest public policy extant is the intent of
the Legislature, in enacting the AEA, "to limit evictions to
situations in which a landlord had reasonable grounds and provided
suitable notice." A.P. Development Corp. v. Band,
113 N.J. 485,
492 (1988).
To the extent that Bayside, supra, 154 N.J. Super. at 328, may
be read to suggest that a court should not compel the landlord to
proceed under the three-year notice provisions, we reject that
suggestion. Protection for the tenant may be a strong legislative
policy, but the AEA is also concerned with affording landlords an
opportunity to evict tenants for "good cause." Les Gertrude Assoc.
v. Walko, 262 N.J. Super. 544, 548-49 (App. Div. 1993); Montgomery,
supra, 261 N.J. Super. at 241. Good cause includes circumstances
where the owner intends to sell a unit to an owner-occupant.
Veltri, supra, 195 N.J. Super. at 409. The balance between these
competing concerns is best struck by treating this tenant, whose
tenancy began after the construction or conversion of a condominium
but who did not receive the required notice, as a pre-conversion
tenant subject to eviction on three years notice. This course,
chosen by the DCA in N.J.A.C. 5:24-1.9(b), has also been suggested
in Smith, New Jersey Condominium and Community Association Law §
13:4(e) at 249 (1993 ed.):
If the tenancy commenced subsequent to conversion, a tenant is entitled to only 60 days notice prior to the end of his lease term before he is required to deliver possession, provided that (i) the proper statutory notice of the conversation is given to the tenant when he applies for tenancy and at the time of
establishing the rental agreement; (ii) such
notice is also included as the very first
clause in the written lease; (iii) that the
tenant is being evicted because of a sale to
an owner occupant. N.J.S.A. 2A:18-61.9. If
one of these conditions is not met, then it
would seem appropriate to apply the pre-conversion protection that flow from 2A:18-61.1(k) to a post-conversion tenant.
We follow this as a better alternative than either (1) ignoring the
requirement that the tenant receive notice in the lease at the
outset of the tenancy or (2) conferring a life estate on a tenant
who has not been so notified.
Finally, we flatly reject the landlord's argument of
"substantial compliance" with N.J.S.A. 2A:18-61.9. The landlord
relies on defendant's concession that the building bore a sign
designating it as a "condominium" when she moved into the
apartment. The Landlord points out that defendant could not recall
if she had oral notice of the possibility that the apartment could
be sold during her tenancy.
The substantial-compliance argument also relies on the fact
that defendant's lease, executed one year after her tenancy began,
included as its last paragraph a notice that the landlord reserved
the right "to show the premises to prospective purchasers thereof
during the terms of the lease" and that upon sale the new owner
might "have the right to occupy the same upon giving the tenants a
30-day notice of the termination of the tenancy."
The provision falls short of the requirement that notice must
be given prior to start of the tenancy and be contained in the
first paragraph of the lease. Even if the wording of the lease
provision amounted to substantial compliance, there is no legal
support for the landlord's assertion that substantial compliance is
sufficient to grant a landlord the right to rely on a sixty-day
notice of eviction. Strict compliance with the AEA, including all
notice provisions, traditionally has been a jurisdictional
prerequisite for a dispossession action. Montgomery, supra, 261
N.J. Super. at 241; Weise, supra, 257 N.J. Super. at 504, Bayside,
supra, 254 N.J. Super. at 325; Aspep, supra, 269 N.J. Super. at
102; Williams, supra, 263 N.J. Super. at 505.
The landlord overstates the prejudice factor by claiming that
the trial judge "blind-sided plaintiff with a notice requirement it
had no knowledge of or control over" because the judge "expanded
the scope of [N.J.A.C. 2A:18-]61.9 to cover new construction." In
fact, N.J.S.A. 2A:18-61.1(l)(1), the provision under which
plaintiff claims a right to evict defendant, explicitly provides
that sale to a buyer who intends to occupy a unit "constructed as
or being converted to a condominium" is good cause for eviction
only when the statement required by "section 6 of [N.J.S.A. 2A:18-61.9]" was given. We conclude that the notice requirement clearly
applies to an apartment "constructed as" a condominium.
Affirmed, as modified.