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Sacks Realty Co., Inc. v. Shore

A-6681-96T2, 1998 N.J. Super. LEXIS 520 (N.J. Super. App. Div. 1998)

CONDOMINIUMS; CONVERSIONS; TENANCIES—A waiver of its right to remain in its apartment by a pre-conversion tenant at a condominium project and a related consent judgment may be voidable as a matter of public policy.

In 1986, a condominium conversion was proposed by its sponsor. An agreement was entered into between the sponsor and a tenant group’s attorney as “authorized representative.” Part of that agreement was that the sponsor would postpone its right to evict unprotected, non-purchasing tenants for a period of one year subject to certain conditions. The agreement further recited that no tenant would seek more than one stay of eviction under N.J.S. 2A:18-61.11. The conversion was completed and at the appropriate time the landlord commenced summary dispossess actions. Those actions were concluded by individual consent judgments. Each consent judgment provided for a two year stay from the date of judgment rather than the one-year specified in the original agreement. In the interim, the Legislature imposed a moratorium on such evictions, including an express prohibition against the removal of tenants against whom a judgment for possession had been obtained but who had not been actually removed as of the effective date of the legislation. Subsequently, the Legislature passed The Tenant Protection Act of 1992 and substantially extended the class of tenants protected in the event of condominium or cooperative conversion. At the appropriate time, the landlord sought to enforce a consent judgment, but the tenants argued that their waivers were “illegal” and that they should enjoy the benefit of the subsequent legislation. The lower court concluded that the landlord was correct, ordered the tenant’s removal and awarded damages to the landlord. On appeal, the Appellate Division was “persuaded that defendants’ respective waivers of the complex of statutory right then afforded them was, in the circumstances, impermissible as a matter of public policy, rendering the agreement and consent judgments void.” Even though the 1986 agreement and the subsequent consent judgment accorded some significant concessions to purchasing tenants, they apparently had no applicability to non-purchasing tenants. What the non-purchasing tenants got was even less than what was accorded to them by law. Consequently, the Court found that the tenants gave up valuable statutory protections effectively for no consideration. Further, even though there may be a question as to whether the legislation expressly prohibited waivers, according to the Court’s thinking, general considerations of public policy mandated such prohibition. “The dictates of public policy may require invalidation of private contractual arrangements where those arrangements directly contravene express legislative policy or are inconsistent with the public interest or are detrimental to the public good.”

The landlord raised the argument that if the consent judgments were otherwise valid and enforceable, they could not be subject to retroactive impairment. The Court found, however, that it was immaterial whether the judgments were obtained before or after the legislative change. In this case, it is not a judgment for possession that gave the landlord actual possession of premises. What was required was a further judicial act, and a court has the power to withhold issuance of a warrant of removal for good cause. Further, in the Court’s opinion, the 1992 Act afforded tenants the unqualified and unconditional right to remain in their apartments as long as they meet the statutory criteria for protection.


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