No Certificate of Occupancy is Not a Bar to Eviction
Way back when in 2001 a New Jersey landlord that had grounds to evict a tenant for non-payment of rent or for other causes under landlord tenant law, could be barred simply because the property did not have a certificate of occupancy. Although the requirements vary from town to town, a certificate of occupancy is essentially the town’s blessing that all permits are closed out and that the property is “ok.” Dare I say safe. The 2001 case, McQueen v. Brown and Cook case removed this bar. To put simply, the Court held a tenant should not be able to benefit from an illegal contract, so the landlord had the right to evict the tenant.
The Fine Line Between Lack Of A Certificate Of Occupancy And Uninhabitable
The McQueen decision does not overturn Khoudary v. Salem County, (the prevailing case prior to McQueen,) but distinguishes it factually. In Khoudary, like in McQueen, the landlord rented the premises without obtaining a certificate of occupancy, but in Khoudary the authorities “rendered the premises uninhabitable before the tenant took occupancy.” The Court held that the suit against the tenants for rent was therefore “frivolous.” In stark contrast, in McQueen, the tenant had been living in the leased premises for five years, with the court concluding that “a lease is not automatically void simply because the landlord failed to obtain an occupancy permit.”
Public Policy Considerations Rule the Day
The McQueen Court looked at the public policy behind the ordinance requiring an occupancy permit. The court thought it was clear that the City’s goal was to make sure that rental housing stock was safe and habitable, by establishing an inspection and repair process for curing defects. The court concluded that the public policy was not advanced by declaring a lease void simply for failure to obtain the permit when the tenants had enjoyed the premises for a period of time, and absent any evidence that it was not habitable. The court commented that holding a lease unenforceable after such a long time period results in an “unjustifiable burden” on the landlord and an undeserved benefit to the tenants.
Lease is Enforceable Where Premises are Habitable
The court held that the lease should not have been declared unenforceable against the landlord, allowing the tenants to live “rent-free” for those months where there was no occupancy permit. Instead, there should have been an adjournment so that the tenant might be able to submit evidence of a breach of the implied warranty of habitability. The McQueen court held that “where the tenants have not demonstrated their right to a rent abatement, much less being permitted to live rent-free for the entire period that the landlord did not have a certificate.” The court said that declaring the lease void under these circumstances would be an “unjustifiable windfall” for the tenants.
What Constitutes Habitable?
The court in McQueen was well aware that dwellings often lack certificates of occupancy for reasons that do not impact habitability, such as doing renovation themselves or using unlicensed architects and/or carpenters, but meanwhile the property can be in excellent condition, even luxurious. The duty to ensure that rental units are decent and safe is called the “implied warranty of habitability.” New Jersey courts have held this to include proper maintenance of the roof, windows and walls; the supply of hot/cold water and heat; electricity and gas; appliances such as a stove and refrigerator. It also implies keeping the common areas reasonably clean and pest-free and providing security against crime.
Evicting a Tenant
To evict a tenant in New Jersey, a Landlord must follow the rules of the road. In my experience, Courts have rescheduled landlord tenant cases for the landlord not providing a certificate of occupancy. At the end of the day, it is not a defense. In addition, just because there are complaint templates for your use does not equal a successful at court after you complete it. A strict review of the facts must be taken to establish a foundation to remove a tenant. If you are a landlord that needs to evict a tenant, it’s wise to hire an experienced New Jersey landlord-tenant attorney so that the proceedings will go smoothly.