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DSC of Newark Enterprises, Inc. v. Friction Division Products, Inc.

A-3653-99T2 (N.J. Super. App. Div. 2001) (Unpublished)

LEASES; EVICTION—Absolution from payment, in part or in whole, is available as relief to a tenant in a dispossess action.

A tenant occupied premises under a two-year commercial lease for the “manufacturing, assembly and sale of automobile parts[.]” It had also occupied the same premises at an earlier time. Shortly after it occupied the premises pursuant to the lease, a fire occurred in a nearby building in the same industrial park. When the fire inspector observed this particular tenant’s occupation of the leased premises, he informed it that the prior certificate of occupancy had expired since it had last occupied the building and that the building lacked a certificate of occupancy as required by the municipality. The tenant informed its landlord of the deficiency, but the landlord took the position that the tenant had the responsibility to obtain the certificate of occupancy under a provision of the lease that required the tenant to “promptly comply with the laws, ordinances, rules, directives, regulations and requirements ... applicable to the leased premises.” The tenant paid a pro-rated rental amount for the first month and full rental for the second month of its lease, after which it paid no further rental. A subsequent fire safety inspection of the leased premises noted seven deficiencies. Consequently, the tenant was prohibited from conducting any manufacturing activities until its certificate of occupancy was properly issued. Apparently, violations within this particular tenant’s premises related to the fire in the other premises. The landlord sought to evict the tenant based on non-payment of rent. The lower court determined that rent for the two subsequent months was not due and would not be due until the landlord cleared up whatever obligations the adjoining tenant had so that a certificate of occupancy could be issued for the premises in question. The landlord appealed, contending that “a judge in a summary dispossess action lacks authority to withhold rental payments on equitable grounds.” According to the Court, “[a]bsolution from payment, in part or whole, is available as relief to a tenant in a dispossess action.” Further, the lease stated that “if the premises are not ready for occupancy ... rent shall not commence until possession is given or available.” According to the Appellate Division, the decision of the lower court was entirely consistent with this provision.

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