June 4, 2021
Client Alert: How the Resumption of Commercial Landlord Tenant Trials in New Jersey Impacts LandlordsOn June 2, 2021, Chief Justice of the New Jersey Supreme Court Stuart Rabner issued an order which lifts the ban on commercial eviction proceedings. Since March 16, 2020, the court had placed a blanket suspension on all residential and commercial landlord tenant trials, subject to narrow exceptions. From a commercial standpoint, this left many landlords unable to regain possession of their property despite tenants’ failure to make required rental payments.
However, the Court’s June 2, 2021 Order lifts the ban with respect to commercial evictions, which will now be scheduled for trial. Proceedings in general are to be held in remote format, however discretion is left up to the Judge as to whether an in-person conference or trial is warranted based on the individual facts of each case. The Court at this time has not modified any of the underlying procedures or processes of a commercial landlord tenant eviction.
While this Order is no doubt welcome relief for landlords holding commercial property with a defaulted tenant, this order by itself does not mean things will return to the status quo overnight. There is no word from individual county vicinages as to how the backlog of pending commercial landlord tenant cases will be addressed, how quickly hearings will be scheduled, or the procedure for conducting remote trials on such a massive scale. Additionally, even though vicinage courts may find in favor of commercial landlords at trial, there is no word from any of the county sheriffs’ offices about implementation of lockout procedures.
There have also been significant discussions relating to possible changes to the landlord tenant eviction process. On April 21, 2021, the Court issued a 61-page report with suggestions on procedural changes to the landlord tenant eviction process. Although the June 2, 2021 Order states that no changes are being made to the commercial landlord tenant procedure at this time, the Court does reserve the right to amend the Order, particularly as it related to processes and procedures.
Additionally, it is suggested that commercial landlords review all non-performing leases to determine if a force majeure clause exists and if so the clause’s strength. Commercial tenants in other jurisdictions successfully relied on tenant friendly force majeure clauses in the bankruptcy courts to reduce tenant rental obligations.
However, it should be noted this argument has yet to be raised at a state level and even at a federal level it is unclear if tenant favorable rulings will hold. That being said, commercial landlords should still be aware of these clauses as it is expected litigation surrounding them will dramatically increase as commercial landlord tenant eviction actions begin to go to trial.Finally, the Court’s June 2, 2021 Order is explicit in not changing any of the current bans on residential evictions. Thus, residential landlords are still left unable to seek redress in the court against non-paying tenants at this time. No timetable has been given as to when the resumption of residential landlord tenant eviction actions will occur.For any questions relating to the Court’s June 2, 2021 Order or general questions relating to landlord tenant issues, please contact Michael Kahme, Eric P. Kelner, Sean D. Adams or Keith M. Salmeri.