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N’Jie v. Cheung

2011 WL 809990 (U.S. Dist. Ct. D. N.J. 2001) (Unpublished)

LEASES; OPTIONS — Where a lease contains a provision stating “Option to Buy. Right of First Refusal,” a court, because of the provision’s vagueness, will not find this to constitute an enforceable option to buy.

A residential tenant sued his landlord, alleging that the landlord had breached their lease. The lease had an option-to-buy provision. The landlord filed for summary judgment to dismiss the tenant’s six-count complaint. In seeking to dismiss the breach of contract claim, he claimed that his reason for refusing to renew the lease was a statutorily enumerated “good cause” ground and that he acted in accordance with the terms of the lease when refusing to sell the apartment to the tenant. In New Jersey, the Anti-Eviction Act limits a landlord’s right to evict a residential tenant to statutorily enumerated reasons. The tenant argued that the landlord’s motivations were pretextual. According to the Court, a tenant has the burden of showing that the landlord did not actually intend to personally occupy the apartment. The tenant only argued that the landlord was lying about his intention; but, summary judgment cannot be defeated solely by challenging credibility.

Also as to the breach of contract claim, the landlord argued that the option-to-buy provision in the lease only gave the tenant the opportunity to purchase the property ahead of another buyer and did not require the landlord to sell at the tenant’s request. To the contrary, the tenant argued that the provision was an option giving him the unilateral power to compel the landlord to sell. The lease agreement stated “Option to Buy. Right of First Refusal.” The Court held that this vague language could not be interpreted to give rise to an enforceable option to buy. In granting the landlord summary judgment on the breach of contract violation, the Court found that the tenant’s right would have arisen only if the landlord had placed the property on the market.

Next, the Court granted summary judgment to the landlord as to the breach of the tenant’s implied covenant of good faith claim because the tenant offered only bare accusations that the duty had been breached, unsupported by any argument or evidence. Then, the Court granted summary judgment to the landlord as to the tortuios interference with an existing contract claim because the Court had previously determined that the landlord hadn’t breached the lease at all.

The landlord next argued that he had no obligation to repay his tenant for changes the tenant made to the apartment because the lease agreement specifically exempted the landlord from paying for such improvements. The tenant argued he had the right to recover under the theory of unjust enrichment. Here, an expressed term of the contract said that the landlord was not responsible for paying for any improvements, even when consent to make the improvements had been given. It also said that the improvements became the property of the landlord once made. The Court found the lease’s provision controlling, and granted the landlord’s motion for summary judgment as to the unjust enrichment claim.

Finally, the tenant claimed detrimental reliance, asserting that his landlord had represented that he would sell the property to him and that, to his detriment, he passed up various opportunities to rent or buy other properties at a lower price in reliance on the landlord’s statements. The landlord argued that he never made such a promise and, even if he had, the tenant did not suffer any detrimental consequences from such reliance. The Court observed that New Jersey law requires that a clear and definite promise be made by the promisor in a reliance claim. Here, the parties agreed that no such unambiguous and concrete promise was made. Thus, the Court granted summary judgment in favor of the landlord on the reliance claim.


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