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McQueen v. Brown

342 N.J. Super. 120, 775 A.2d 748 (App. Div. 2001)

LANDLORD-TENANT; EVICTION—To be owner-occupied, a house need not be the owner’s domicile or principal residence; the owner merely must reside in the house for “some time.”

A residential landlord sought to remove a tenant for non-payment of rent. The tenant raised the defense that the lease was illegal and therefore unenforceable because the landlord had not obtained a required municipal occupancy permit. The lower court agreed and dismissed the complaint for possession. The landlord again sought to evict the tenant, claiming the apartment was exempt from the Anti-Eviction Act’s good cause grounds for eviction because the premises were owner-occupied and had not more than two rental units. The lower court dismissed that complaint, concluding that the landlord’s limited occupancy of the second-floor apartment, consisting of eight or nine days a month, did not qualify the apartment as “owner-occupied” under the statutory exemption. It also denied relief to the landlord because of a failure to obtain a local occupancy permit. Local law provided that no owner could rent an apartment unless an occupancy permit had been issued certifying that the apartment was in compliance with all municipal dwelling ordinances. The ordinance also said that the permit would be denied if the apartment was “unfit for human habitation” or if the conditions of the apartment were “dangerous or injurious to the health, welfare or safety of the occupant.” The Appellate Division disagreed with the lower court and concluded, “that the lease is not automatically void simply because the landlord [fails] to obtain an occupancy permit; other factors bear equitably on the problem.” The Court listed some factors including the public policy underlying the law, the question of whether voiding the lease will actually further that policy, the burden or detriment of the respective parties if the lease is voided, and the benefit “which the party seeking to avoid the bargain has enjoyed.” When it looked at the policy behind the ordinance requiring an occupancy permit, it saw it to be evident that it was to ensure that housing stock would be safe and habitable. Accordingly, according to the Court, such a policy “is not advanced by a rule that would declare a lease void because the landlord did not obtain an occupancy lease at its inception, or even thereafter, [especially] where the tenants have been residing in the premises for almost five years, paying rent, and receiving the benefits of the occupancy, without demonstrating that the premises are uninhabitable.” Basically, the policy protecting tenants from dangerous living conditions is not promoted by voiding a lease in the absence of demonstrating serious housing violations, either at the inception of the lease, or thereafter. Also, according to the Court, the lower court should have had a hearing with respect to the apartment’s alleged habitability defects. Further, the Court believed that to declare such a lease unenforceable after such a long time would result in an unjustifiable burden on the landlord, and an undeserved benefit to the tenant. With respect to the “owner-occupied” exception, the lower court had held that because the premises were not the landlord’s “principal residence,” it did not qualify as an “owner-occupied” premises under the exception. This created an issue of first impression. Again, the Court looked to the policy underlying the statute, concepts of reasonableness, and legislative history, if any. According to the Court, the “Legislature enacted the owner-occupied exception to give small residential landlords ‘some control over the persons with whom [s]he lives.’ In the statute, the word “occupied,” like the word “owner,” is subject to no qualifying language. The legislative history stated that “to qualify for [the owner-occupied] exception ... the actual ‘owner’ ... [of] the premises must reside there.” Further, in the absence of any legislative history that could explain the word “reside,” the Court looked to the general principal that a person may have more than one residence, but may not have more than one domicile. Further, two other statutory exceptions to the good cause requirement rely on the concept of one who “permanently occupies” a unit. In addition, the Legislature defined “permanently occupies” to mean that the occupier “maintains no other domicile at which the occupant votes, pays rent or property taxes, or where rent or property taxes are paid on the occupant’s behalf.” Importantly, no such expressed requirement is provided in the “owner-occupied” exception. Based on the small legislative history, and the plain language of the statute, the Court construed the “owner-occupied premise” exception does not require “an ‘owner-occupier’ to permanently occupy or use the unit as the owner’s principal residence to qualify for the exception.” According to the Court, an owner must live in the unit for “some time.” It did not establish what that time period should be, but noted that the landlord had resided in the apartment for twenty years, occupying it on a frequent basis as a weekend or weekday retreat. The Court was satisfied that the landlord’s occupancy for eight or nine days a month was more than sufficient to qualify her as an owner-occupier. Consequently, the Court reversed the lower court on both issues.

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