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Lake Gerard Company v. Cohen

A-1892-01T3 (N.J. Super. App. Div. 2003) (Unpublished)

LEASES; ANTI-EVICTION ACT—Even though seasonal residential tenants do not have a statutory right of renewal, a landlord can grant that right in the lease or in settlement of a lawsuit.

After a decade-long litigation, the owner of a very large tract of land and various tenants settled a complicated dispute and the settlement, although not reduced to writing, was placed on the record. Essentially, an 18,000 acre tract of land had been acquired in the 1930s and never subdivided. Specified areas were leased by one-year seasonal ground leases for summer campsites. Over the years, the tenants “built cabins and even more elaborate houses on their allotted portions,” resulting in about 90 dwellings around the perimeter of the lake. Even though the leases restricted occupancy to the summer season, some tenants occupied the homes on a year round basis. In the settlement of the leases and the lease renewal rights, the owner’s attorney listed ten conditions, one of which was that the provisions of the Anti-Eviction Act would apply to the leases. Toward the end of the hearing at which the stipulation was placed on the record, the landlord’s attorney advised the Court that “I left out one part of the settlement agreement, and that is with regard to the three-year lease.” If that lease is subject to a reasonable rent increase per the Anti-Eviction Act Statute, the tenants’ attorney acknowledged that “[t]he Statute permitted that based on proper notice and the reasonableness.”

Ultimately, when the leases were tendered in accordance with the settlement agreement, some tenants refused to sign. The landlord took the position that under the terms of the settlement agreement, “the protections of the Anti-Eviction Act were only intended to apply to the three-year term of the lease and any one-year renewal to which the [landlord] might agree.” The tenants argued that “no such qualification was expressed or accepted by them and that the whole point of the settlement was to assure their continued tenancies unless terminated in accordance with the Act or the lease.” Aside from the tenants who were to be offered year-round leases under the settlement agreement, the other leases were seasonal leases exempted from the Anti-Eviction Act. Consequently, they were exempted from the owner’s obligation under the Act to offer renewal leases. The Court understood that the real concern of the tenants, “who had engaged in ten years of litigation to advance their cause, was the extreme economic impact of non-renewal.” As a result, the Court stated: “The conclusion that inescapably emerges from a review of the stipulation is that if its references to the Anti-Eviction Act did not intend to confer a right of renewal on the tenants, then those references were altogether superfluous and meaningless because all of the other terms of the stipulation constituted nothing more than lease provisions requiring no reference to the Act.” The Court found “no qualification whatsoever [in the stipulation] and certainly no expression of an intent that the Act would apply only during the term of the lease. Beyond that, it [was] clear [to the Court] that the tenants would have no real benefit from the applicability of the Act only during the term of the lease because their anti-eviction right during the three-year term of the lease was contractually assured by the lease itself provided only that the tenants complied with its terms. That is to say, in this context the reference to the Anti-Eviction Act would have been a complete redundancy.”

The Court recognized that seasonal tenants have no statutory right of renewal. That, however, did not mean that the landlord could not have given them that right as part of the global settlement. Essentially, the Court held “that had the Anti-Eviction Act not been intended to apply in futuro, there would have been no need for the settlement agreement to refer to [the statute], which permits eviction where the owner seeks to retire the demised premises from their current residential use.” The settlement agreement expressly provided, without mentioning the Anti-Eviction Act, that the owner could sell or develop the property during the term of the lease upon giving each tenant one year’s notice. Further, there were other express provisions of the settlement agreement which would not have been necessary to state if the applicability of the Anti-Eviction Act had been limited to the initial three-year lease term.

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