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Equiva Services, L.L.C. v. Gotham Corporation

A-3485-01T2 (N.J. Super. App. Div. 2003) (Unpublished)

LEASES; HOLDOVER; ENVIRONMENTAL CONTAMINATION—If, after good faith efforts, a former tenant fails to obtain access to the leased property for the purpose of doing environmental monitoring, a tenant can get a court order allowing such access and there is no basis to require payment of rent for the right to access.

A service station lease ended and the tenant was obligated to remediate contamination on the property. This required that the tenant have access to the property to monitor its condition. The landlord and tenant made a good faith effort to reach an agreement concerning access but were unable to do so. The tenant filed suit pursuant to N.J.S.A. 58:10B-16 “to invoke the statutory right of access to the property.” The lower court granted access, but ordered that the tenant pay, “monthly into escrow a sum equivalent to the rent under the lease” for the amount of time the tenant needed access to the property. The Appellate Division held this condition to be unwarranted. The statute in question includes a provision that, “unless the court otherwise orders for notice and good cause shown, an action for an access order shall not be joined with non-germane issues against” a person such as this tenant “who might be liable for the contamination.” To avoid imposing a hardship on the property owner, the statute “provides that the owner of property against which the access order is issued will not be constrained from initiating a civil action to seek damages available under law.” Apparently, the lower court thought that the escrow account would be held until a separate law suit determined whether the tenant owed its landlord “damages for the lost economic value of the subject property” caused by the contamination. The Appellate Division concluded that the escrow requirement “was not supported by law and was beyond the trial court’s discretion.” Essentially, the escrow relief “was not germane in this context” and it should have been litigated in the separate suit brought by the landlord against the tenant. Accordingly, there was no basis for ordering continuation of the “rental obligation for access to otherwise vacant property only four days per year for purposes of implementing” a mandated remedial work plan.


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