As the COVID-19 pandemic continues, many are wondering how it will continue to affect their daily lives. Whether referring to residential or commercial properties, Landlord-Tenant matters prove to be a major concern for many. In an effort to avoid evictions during this State of Emergency, the State has taken several measures to keep residents in their homes. This article is aimed at explaining how these measures will affect both landlords and tenants in the State of New Jersey.
On March 19, 2020, Governor Phil Murphy issued Executive Order No. 106. That Order put a moratorium (suspension) on all residential evictions. Specifically, the Governor’s Order provides that evictions and foreclosure proceedings may be initiated or continued during the time of an executive order, but enforcement of all judgments for possession, warrants of removal, and writs of possession shall be stayed. In other words, landlords are permitted to file eviction actions or continue actions that were ongoing but the actual eviction will not occur until “no longer than two months following the end of the Public Health Emergency”. This Order pertains only to residential properties; not commercial.
Governor Murphy stated the following with regard to this Order:
"To every landlord, I cannot stress this enough, now is the time to show some compassion and to work with your renters to ensure that they stay safe and in their homes," he said. "And, as I mentioned, you cannot evict anyone at this time and if you try to we're not going to take it lightly and we will make an example out of you for violating the law."
On April 24, 2020, Governor Murphy signed Executive Order No. 128, which allows a tenant’s security deposit to be applied to or credited towards rent payments due or to become due from the tenant during the Public Health Emergency. To do so will require a written request from the tenant, which can be done via electronic communication. The landlord will still be able recoup any monies that the landlord expended that would have been reimbursable by the security deposit when the tenant vacates the property. If the tenant and landlord extend or renew their lease contract, however, the tenant shall be obligated to replenish the security deposit within six months following the end of the Public Health Emergency.
There is presently pending legislation sponsored by Senator Brian P. Stack of the 33rd Legislative District and Senate President Stephen Sweeney aimed at providing $100 million in relief to New Jersey tenants. S-2332 recently passed in the Senate 38-0 and is set to go before the Assembly on May 14, 2020. The new legislation is called the “2020 New Jersey Emergency Rental Assistance Program” and if passed, will establish a temporary emergency rental assistance program for residential tenants who have suffered an income loss due to the COVID-19 crisis. Specifically, the program would pay certain amounts of rent due and owing to tenants who: 1) are at least 30 days past due on a rent payment; 2) are unable to pay rent without assistance; and 3) have suffered a demonstrable loss in income due to the COVID-19 crisis. This bill would not only help tenants but landlords as well. David Brogan, executive director of the New Jersey Apartment Association, recently wrote an article for NJ.com in which he stated that the NJAA “is extremely supportive of this legislation and we believe that this funding is absolutely critical.”
As to date, there has been no Order or directive waiving rent payments. Tenants are still required to pay their rent and abide by the terms of their leases. By issuing Executive Order No. 106, Governor Murphy seeks to avoid eviction and homelessness during this unprecedented time. Landlords may still seek evictions but they will not be able to have the tenant removed until after the State of Emergency has ended. Under current law, a landlord must obtain a judgment of possession issued by a Superior Court Judge in order to evict a tenant. While the Court is currently permitting landlords to submit eviction complaints through the mail, those complaints are not being given trial dates at this time. Once a judgment is obtained via a Trial Judge, the eviction can only be carried out through the County Sheriff’s Office (commonly known as the “Constable”). So even if a landlord were able to obtain a judgment at this time, the Sheriff’s Office has been ordered to refrain from executing those judgments.
As for commercial landlords, they will inevitably be faced with the same dilemma. To date, there has been no Order or mandate preventing commercial evictions. Nevertheless, undergoing an eviction with the current state of affairs will prove nearly impossible. While the Courts are permitting landlords to file eviction Complaints by mail, it is uncertain when the Courts will be able to proceed with trials. As previously mentioned, even if the commercial landlord could obtain a judgment for possession, they would need to schedule the lock-out with the County Sheriff’s Office. At the present time, constables are not currently proceeding with lockouts and there is no established date for them to do so. Therefore, while landlords are still entitled to pursue claims against their commercial tenants, they will have to wait before they can get their eviction. It is worth noting that while a landlord may not be able to obtain an eviction any time soon, there is nothing preventing them from filing a monetary lawsuit for the rent owed.
Self-help is illegal in New Jersey, meaning that landlords cannot evict a tenant through their own means. Tenants have the right to appear in court on the scheduled trial date to defend themselves against a possible eviction. This includes commercial tenancies. Even attempting to remove an individual without a lease or rental agreement (oral or written) requires the filing of what is called an Ejectment Action. A self-help procedure called the right of Distraint, governed by N.J.S.A. 2A:33-1 through 2A:33-22, is permissible only in extraordinary circumstances. Distraints may be taken when authorized by law; but no unreasonable, excessive, or wrongful Distraint may be taken. For any such use of Distraint that is later deemed to be wrongful, the distraining party may be liable in damages to the wronged party. Simply put, do not attempt any type of self-help unless there is an emergency. A Court will not consider non-payment to be an emergency.
In a similar effort to help hurting landlords and property owners, on March 28th, Governor Murphy announced that Citigroup, JP Morgan Chase, US Bank, Wells Fargo, and Bank of America, in addition to over 40 other federal and state-chartered banks, credit unions, and servicers have committed to providing relief for consumers and homeowners in New Jersey. Under this initiative, the Governor announced that New Jerseyans who are struggling with the COVID-19 crisis may be eligible for a 90-day grace period for all mortgage payments. If you are impacted by COVID-19, these financial institutions will offer mortgage-payment forbearances of up to 90 days, which allows you to reduce or delay your monthly mortgage payment.
At this point in time, the current state of Landlord-Tenant proceedings in New Jersey is a mystery. The Courts are currently attempting to formulate a plan on how to proceed with the large docket of cases currently pending in the State. With no definitive end date to this State of Emergency, however, that plan will remain tentative. As the State of Emergency continues, it is not unlikely that the Governor will issue further Orders that may affect the rules and policies discussed above. In the meantime, the most prudent way to deal with Landlord-Tenant matters is for landlords and tenants to attempt to resolve their issues amongst themselves. It is certainly not a time for parties to take advantage of the situation. Tenants should not consider this a time to unnecessarily withhold their rent. Nor should landlords take the opportunity to neglect the needs of their tenants. Now, more than ever, both landlord and tenants need to work together while the world attempts to battle COVID-19.
Be well and stay safe!
James Shovlin, Esq.