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Hurdle v. Citimortgage, Inc.

A-1251-07T2 (N.J. Super. App. Div. 2009) (Unpublished)

LANDLORD-TENANT; EVICTION — The Forcible Entry and Detainer Act does not apply if the landlord removes its tenant after the landlord has been cited for a violation of the municipal ordinance because a landlord cannot disregard governmental orders by permitting its tenant to use space and then be facing potential fines and penalties.

A lender obtained a final judgment of foreclosure for a multi-family dwelling. Following a sheriff’s sale, title was transferred to the lender. At the time of the transfer, a tenant was occupying the third floor pursuant to a written lease. Several years later, a fire damaged the premises and the tenant was forced to vacate. The municipality’s fire chief told the then owner not to turn on the utilities until an inspection was performed and to refuse to permit anyone to occupy the third floor of the building. Shortly thereafter, the municipality issued a violation to the owner for permitting the tenant to reside in the attic. It gave the owner two weeks to rectify the problem or be subject to immediate court action. The owner then boarded up the doors and windows. In response, the tenant sued, alleging unlawful entry and detainer by the owner. The owner subsequently sold the property.

The lower court concluded that the owner did not violate the tenant’s rights were not violated. It ruled that the safety risks posed after the fire and the notice that the apartment was illegal precluded the tenant’s reentry. After the tenant’s motion to reconsider was denied, the tenant appealed.

The Appellate Division affirmed, holding that it was clear that the owner’s sale of the property prevented the tenant’s pursuit of the remedy of possession. The Court held that the suit could continue because, under the applicable statute, treble damages were awardable when possession “would be an inappropriate remedy.” On the other hand, it rejected the tenant’s assertion that the owner could only bar the tenant from the apartment by obtaining a Judgment of Possession in accordance with the Forcible Entry and Detainer Act (Act). The Court ruled that the right of possession under the Act is contextual. Here, it found that the tenant’s continued occupancy of the apartment had been interrupted by the apartment fire and that the owner had done nothing to effectuate the tenant’s removal. Further, it noted that the fire department intended that no one return to the premises until the fire investigation was completed and until all utility systems were thoroughly checked.

The Court ruled that the owner never acted reasonably in securing the premises once it received notice from the municipality that the apartment was illegal. It also noted that the tenant had written to the owner discussing “significant smoke and fire damage rendering the apartment uninhabitable.” Moreover, the Court noted that on the day of the fire, the tenant had executed an agreement for a one month residential rental elsewhere. These facts, the Court held, failed to support an act of unlawful detainer. Basically, it agreed with the lower court that the Act did not apply because a property owner charged with a violation of a municipal ordinance, such as that presented here, could not disregard the notice’s directive and permit the tenant to resume use of the attic. If the owner did so, the owner would have assumed a serious risk of increased jeopardy to the tenant’s safety and welfare, and the owner would have faced potential fines and penalties. Thus, the Court held that the tenant had not been evicted by self-help repossession or by some other illegal lockout. It ruled that for the Act to apply under the circumstances of this matter, a landlord would face the “Hobson’s choice” of deciding whether to assume the liability and risk attached to permitting a tenant to continue to reside in an unsafe and illegal apartment, or face an award of treble damages. The Court held that this would be an absurd result and would be contrary to the law’s objectives.

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