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350 Main Street LLC v. Li

A-3265-09T4 (N.J. Super. App. Div. 2011) (Unpublished)

LANDLORD-TENANT; EVICTION; @NOTICE — Lack of strict compliance with statutory notice requirements in the eviction of a commercial tenant does not defeat a court’s subject matter jurisdiction so long as the purpose of the notice provision is met.

A restaurant tenant entered into a lease requiring it to maintain the premises, but making the landlord responsible for structural repairs and repairs to the heating and plumbing systems and to the water and sewer lines. The lease further prohibited the tenant from making alterations and improvements without its landlord’s written approval. The tenant was responsible to pay for all utility services except for water. The landlord retained a right of entry for the purposes of inspection and performance of necessary repairs or alterations. The lease specified various events of default, including non-payment of rent and the non-performance of any covenants and conditions of the lease following written notice and an unspecified period for cure.

A health inspection revealed a few issues, including problems with grease containers in the yard and debris in the area of the restaurant that could house vermin. As a result, the landlord advised the tenant of four issues to be corrected, demanding a cure within ten days. The restaurant was then cited for maintaining a public health nuisance due to foul-smelling cooking oil in the vicinity of the driveway.

Months later, the landlord advised the tenant that it was in arrears for two months of rent and demanded immediate payment. The landlord then filed for eviction. A dispute had also arisen as a result of the tenant’s attempt to deny access to the property to the landlord’s plumber and electrician who needed to restore hot water to the building’s residential tenants. The landlord filed a verified complaint and an order to show cause seeking access to the property. The complaint alleged that the tenant had moved a heating unit and performed plumbing work and that the tenant’s work created a fire hazard for which the landlord incurred costs to rectify.

The tenant answered the eviction action and asserted a counterclaim alleging breach of contract, misrepresentation, and unjust enrichment. The tenant alleged that its landlord had failed to maintain the building’s heating and cooling systems, failed to provide it with one-half of the basement space as called for in the lease, misrepresented the availability of parking spaces at the rear of the building, failed to update the building’s sprinkler system, failed to make payments for gas, water, and electricity, failed to make necessary ceiling repairs caused by water damage, and failed to separate the heating system for the basement.

The landlord then filed an amended complaint alleging non-payment of rent; the tenant’s failure to maintain the premises; to maintain insurance; and on other grounds. The complaint sought damages in addition to removal of the tenant. Then, the restaurant owner pled guilty to two criminal charges of destroying the landlord’s security camera and for housing employees in the restaurant. At trial, the lower court dismissed the tenant’s argument that the court lacked subject matter jurisdiction to hear the matter because the landlord had not served the tenant with a notice to quit prior to the commencement of the litigation. The lower court granted possession to the landlord based on credible testimony and awarded the landlord trebled damages for damage to the sprinkler system and for the costs incurred to reroute the water system following the tenant’s diversion. The tenant quit the premises.

On appeal, the tenant again raised the argument that the lower court lacked subject matter jurisdiction. However, the Appellate Division disagreed that state law required a pre-suit notice to quit in commercial tenancy cases. The Court noted that the Anti-Eviction Act affords various protections for residential tenants, but that commercial tenants are not so protected. As a result, courts do not insist on strict compliance with statutory notice requirements so long as the purpose of the notice provision is met.

The Court found that compliance with statutory notice provisions had been demonstrated since the amended complaint stated, with specificity, the events of default upon which plaintiff was then placing reliance. Additionally, the action was not a summary proceeding, but rather a plenary proceeding where full discovery was available. The tenant had ample opportunity to mount a defense. The Court also noted that the New Jersey Supreme Court has stated that notice is a prerequisite to judgment, not suit.

Finally, in affirming the lower court’s rulings, the Court rejected the tenant’s various other claims without extended discussion.


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