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Mort’s Family Group v. Tandy Corporation

A-5735-00T5 (N.J. Super. App. Div. 2002) (Unpublished)

LEASES; EVICTION— Even if a commercial landlord exercises a lease right to terminate the lease upon non-payment of rent, a Tenant may redeem or reinstate the lease by paying the rent before entry of a judgment for possession.

A landlord sought to evict a commercial tenant for non-payment of rent, violations of lease provisions, and improperly holding over after the lease had been terminated. The lease was a ten year lease with a five year option. It set the fixed minimum rent for the first five years of the lease, but thereafter, rent would be adjusted through use of the Consumer Price Index. When the tenant failed to pay the adjusted minimum rent, the landlord sent the tenant a notice of default giving the tenant twenty days to cure the default. The tenant failed to pay the rent within the cure period. The landlord terminated the lease and demanded that the tenant vacate the premises. When the tenant then attempted to pay the rent, the landlord refused to accept it and filed an eviction complaint. The tenant then deposited the rent with the court. The tenant claimed that, pursuant to New Jersey statute, when it deposited the rent with the court before a judgment for possession was entered, the court no longer had jurisdiction and the eviction proceeding ends. The landlord claimed that the statute did not apply since it was seeking to evict the tenant for holding over and breaching the lease. The lower court rejected the landlord’s arguments and granted the tenant’s motion to dismiss the complaint. The Appellate Division affirmed. It noted that the tenant was not considered a holdover tenant since its original lease had not yet expired. Therefore, the tenant was permitted to deposit the rent with the court and avoid an eviction. The Court also rejected the landlord’s claim that there was no cure possible because the lease had been properly terminated. The Court found that the failure to pay the adjusted minimum rent constituted a non-payment of rent claim and not a breach of the lease, and the tenant was entitled to stop the eviction proceeding by paying the rent before the entry of a judgment for possession.

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