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Franco v. Rivera

379 N.J. Super. 273, 877 A.2d 370 (Law Div. 2005)

LANDLORD-TENANT; EVICTIONS; SETTLEMENTS—An eviction settlement agreement premised on the mistaken belief that a landlord could evict a condominium pre-conversion tenant on two months’ notice is invalid because the tenant is receiving no consideration for having given up it’s statutory right to a three year notice to quit.

A month-to-month tenant of a condominium unit occupied the apartment prior to its conversion. The owner of the unit, who only owned this one unit within the building, served a notice to quit on the tenant giving the tenant two months’ notice to surrender possession. The owner relied on a subsection of the Anti-Eviction Act that allowed removal of the tenant when: “The owner of a building of three residential units or less seeks to personally occupy a unit, or has contracted to sell the residential unit to a buyer who wishes to personally occupy it and the contract for sale calls for the unit to be vacant at the time of closing.” That particular subsection, however, did not apply cooperative or condominium units. Likewise, similar subsections only applied where the “initial tenancy began after the master deed, agreement establishing the cooperative or subdivision plat was recorded ...” or the “initial tenancy began by rental from an owner of three or less units after the master deed or agreement establishing the cooperative was recorded… .” Otherwise, the termination of pre-conversion tenancy, as was the situation in this case, was governed by yet another subsection of the Anti-Eviction Act. That subsection gives three-years notice protection to pre-conversion tenants in buildings of more than three units. Here, the landlord and tenant entered into a settlement agreement wherein the tenant mistakenly agreed to vacate the apartment. The Court held that the “quid pro quo for the approval of a proposed settlement, a new contract between the parties, but requiring the approval of the court when a judgment is to be entered, is that each party must have received the benefit from the agreement, i.e., some consideration.” According to the Court, because “the notice to quit in this case gave the tenant only two months’ notice to surrender possession, but 3 years’ notice to quit is required, there [was] no benefit to the tenant for the proposed settlement,” and therefore it rejected the proposed settlement based on the deficient notice to quit.

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