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Dalley v. Universal Institute

A-5792-00T5 (N.J. Super. App. Div. 2002) (Unpublished)

COOPERATIVES; CONVERSION— Even though the owner of fewer than three cooperative apartments omits the statutory post-conversion notice in its lease of one apartment, it can still evict its tenant to sell the apartment to someone who plans to reside in it.

The owners of a cooperative apartment leased it to a corporation that used the apartment for its patients’ independent living. The original lease expired but the tenancy continued on a month-to-month basis. The landlord and tenant entered into an agreement for the tenant’s purchase of the apartment, but the cooperative corporation’s board of trustees denied its approval because the cooperative’s by-laws prohibited ownership of shares by a corporation. Even though the corporate tenant offered to purchase those shares through an individual agent, the apartment owner decided to sell the shares to a third party who intended to personally occupy the apartment and required that the apartment be vacant at the time of closing. The apartment owner served a sixty-day notice to vacate the premises. There was no dispute that the corporate tenant was a post-conversion tenant, having first leased the apartment after the building had been converted to cooperative ownership. There is a New Jersey statute which prohibits the owner of fewer than three condominium units from evicting a tenant without three years’ notice unless the tenant’s lease expressly warns the tenant that the three year notice rule would not apply to its particular tenancy. No such provision was in this lease, but the Court held that the notice provision did not apply to an eviction where a buyer of either a condominium unit or a cooperative apartment intends to personally occupy an apartment and requires that it be vacant at closing.

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