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Cypress View Associates v. Pahos

A-16-97T1 (N.J. Super. App. Div. 1998) (Unpublished)

LEASES; ATTORNEYS FEES—A residential month to month tenant who refuses to sign a new lease offered by his landlord is not necessarily bound to any of the terms of the new lease such as a provision calling for payment of attorney fees upon a breach of that lease.

In this landlord-tenant matter, the tenant appealed from the lower court’s order granting the landlord a conditional judgment of possession and an award of counsel fees. The tenant was a month-to-month tenant of a rent controlled apartment when the landlord acquired the building. About a year later, the landlord served the tenant with notice that it was terminating the month-to-month lease and offered the tenant a written lease agreement in its place. Negotiations took place between the landlord and tenant, but no agreement was reached. The tenant then refused to accept the proposed lease and the landlord filed an action for possession. The lower court found the proposed lease and notices were properly served on the tenant, and that the tenant failed to make a prima facie case that the proposed lease terms were unreasonable. Consequently, it found that the tenant had unreasonably withheld its consent to the lease. Accordingly, the Court granted a judgment of possession, but gave the tenant forty-five days to cure. Although the lower court denied attorney’s fees under the frivolous litigation statute, it did award attorney’s fees to the landlord because the proposed lease, which the Court found reasonable and binding, provided for the payment of counsel fees.

The Appellate Division upheld the lower court on the issue of the reasonableness of the proposed lease, but reversed as to the attorney’s fees. It noted that the Anti-Eviction Act has been interpreted in favor of tenants and that leases “should be strictly enforced against the landlord that prepared them.” It further held that the tenant’s refusal to sign the proposed lease could not be viewed as a breach of any portion of the agreement. Given that tenants who sign lease agreements are not barred from later challenging the reasonableness of certain terms of the agreement, the award of attorney’s fees was improper in this instance.


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