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3519-3513 Realty, L.L.C. v. Law

406 N.J. Super. 423, 967 A.2d 954 (App. Div. 2009)

LANDLORD-TENANT; EVICTIONS — An entity-landlord, not being an individual capable of actual residing in an apartment, cannot evict a residential tenant on the grounds that the owner of the entity-landlord seeks to personally occupy the tenant’s apartment.

A buyer acquired a two-unit residential building in his own name and then transferred title to a limited liability company. The limited liability company, as landlord, sought to evict a month-to-month tenant and served a Notice to Quit asserting that its individual member wished to occupy the apartment himself. The tenant argued that a limited liability company landlord could not invoke those grounds for eviction. The lower court agreed with the tenant.

The landlord appealed, but unsuccessfully. The Appellate Division looked at the specific section of New Jersey’s Tenant Anti-Eviction Act that permits “a landlord to remove a tenant if ‘[t]he owner of a building of three residential units or less seeks to personally occupy a unit… .’” The individual owner of the limited liability company claimed that, as the company’s sole member, he and the company were entitled to invoke this section of the Act because he wished to live in the particular unit. The Court recognized its responsibility to construe the statute and, in doing so, its obligation “to effectuate the fundamental purpose for which the legislation was enacted.” Here, it found “the clear purpose of this statute [was] to protect residential tenants from the effects of what the Legislature ha[d] recognized to be a severe shortage of rental housing” in New Jersey. Consequently, it refused to “overlook the distinction between” the limited liability company, as landlord, and its individual member. It felt that if it were to overlook the distinction, “it would be “construing the statute in a manner at odds with its purpose because [it] would be expanding the universe of parties entitled to disposes blameless tenants from their residence.” It didn’t matter to the Court that the apartment would continue to be used for residential purposes. Specifically, it pointed out that the individual member had formed the limited liability company “for the protection it afforded him individually in terms of potential liability.” As such, he “had every right to decide to arrange his affairs in that manner. At the same time, he [had to] accept the concomitant burdens that follow from the choice he made.” It also noted that the individual member had the power to convey the property back to himself, at a cost to himself, and then proceed with the same action.

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