Case Law Summaries

In re Riverview Towers Holding Corp. v. Pepe

• Opinion Date: July 2, 2001
• Real Property Law
• E-Mail

COOPERATIVES; CONVERSION—The Court will not strictly construe the requirement that the notice of conversion appear as the first paragraph of a lease; equity permits substantial compliance with that statutory requirement.

The owner of an apartment building converted it to cooperative ownership. Sixteen years later, it leased one of the unsold cooperative apartments to an individual for a one year term. Several months before the lease expired, the parties renewed the lease for an additional one year term. The owner sought to display the unsold apartment to prospective buyers; however, its tenant barred the entry. Thereafter, the owner brought an action to evict the tenant and to enjoin the tenant from exercising any rights as a tenant except those rights as a post-conversion tenant. The lower court entered an order in favor of the owner. The tenant then appealed, arguing that he was a pre-conversion tenant because he never received the requisite statutory notice of conversion under N.J.S. 2A:18-61.9 and therefore could not be evicted for three years. That Act requires that certain notices of conversion be given to tenants of “unsold” cooperative apartments, of which this was one. At the outset, the Appellate Division recognized that, pursuant to N.J.S. 2A:18-61.9, the owner was required to provide the following statement as the first clause of the lease and as a separate document:

This building is being converted to or is a condominium or cooperative. Your tenancy can be terminated upon 60 days’ notice if your apartment is sold to a buyer who seeks to personally occupy it. If you move out as a result of receiving such a notice, and the landlord arbitrarily fails to complete the sale, the landlord shall be liable for treble damages and court costs.

The Appellate Division found that although this clause was included on the first page of the lease, it was not the “first” paragraph. The Appellate Division also found that this clause was not furnished to tenant in a separate document, although this clause appeared in a separate document that was furnished to the tenant during the renewal term. Relying on the equitable maxim that a court of equity should regard substance rather than the form, the Appellate Division reasoned that “simply because the statutory language did not constitute the very first words on the lease, [the court cannot conclude] that this requirement was not met.” Further, the Appellate Division concluded that the owner complied in substance and in the spirit with the statute when it extended the lease for an additional term. On these bases, the Appellate Division rejected the tenant’s allegation that he never received the statutory notice.

Copyright ©2003. Meislik & Meislik. All rights reserved.