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Village Super Market, Inc. v. Estate of Saul Cantor

A-6162-09T4 (N.J. Super. App. Div. 2011) (Unpublished)

LEASES; DEFAULT; NOTICES — Absent particular additional requirements in a lease, a default notice need only inform a party of the alleged breach and, if applicable, provide it with an opportunity to cure the breach.

A supermarket operator entered into a lease for a property in which it agreed to operate a supermarket. The premises were leased in “as is” condition. The lease included an acknowledgment by the tenant that it examined the premises, including the roof, and that it was accepting the premises in its “as is” condition without any representations by the landlord. The lease required the tenant to keep the interior, exterior, structural, and non-structural aspects of the property in good condition and to make repairs as required by the landlord to keep the premises in good repair and condition.

At some point afterward, the tenant shifted its operations to another location and allowed the leased premises to “go dark.” The tenant intended to sublease the premises, and in connection with the potential sublease, the landlord received a copy of an inspection report. The report disclosed substantial damage to the floor joists, wood flooring, and basement. The landlord then decided to obtain its own inspection report. The report raised concerns as to the condition of the roof and the roof trusses. The landlord sent the tenant a notice demanding repairs to the property. The notice included copies of the landlord’s inspection reports. It categorized the repairs that the tenant was required to make. Some time later, the landlord sent the tenant a twenty-day notice letter under the lease, demanding that the tenant remediate the structural conditions noted in the landlord’s inspection reports or be deemed in breach of the lease. The tenant did not commence any repairs.

The tenant then sued the landlord, claiming that the landlord was trying to prematurely terminate the lease in order to enter into a direct lease with the tenant’s potential subtenant for a higher rent than the rent payable under its lease. The tenant sought an order enjoining the landlord from declaring the lease to be in default or terminating the lease. The lower court signed a consent order enjoining the landlord from re-entering the premises, re-letting the premises or taking any actions to evict the tenant. However, the lower court allowed the landlord to send a termination notice, but conditioned the actual termination of the lease on the entry of a court order. The landlord then sent another default notice to the tenant. The notice identified certain structural and non-structural repairs that had to be made within twenty days or the tenant would be in default.

The landlord moved for summary judgment and the tenant filed a cross-motion for summary judgment. The tenant claimed that the landlord’s notices regarding the alleged breaches of the lease were defective and inadequate because they did not sufficiently identify the required structural repairs. It claimed that the landlord’s notices were based on visual inspections, but in order to determine if structural repairs were really needed, an engineer’s report was required. The lower court disagreed, finding that the notices, with attached reports and photographs, put the tenant on notice that there were defects in need of repair. They had not been repaired, and therefore the landlord was entitled to summary judgment. The tenant appealed, but the Appellate Division affirmed.

In its appeal, the tenant argued that the landlord’s first default notice was inadequate because it indicated a need for extensive structural work but failed to advise what the specific structural defects were. The tenant also claimed that the landlord’s inspection reports were defective because they were based on a visual inspection of the exposed elements, but did not contain a structural engineering analysis. The Court disagreed and found that lease only required the landlord to provide the tenant with a written notice of default and not an expert’s report. The purpose of the notice was to inform the tenant of an alleged breach and provide it with an opportunity to cure it. The Court found the notices to be sufficient in that they described the defective conditions with sufficient particularity for them to be located, evaluated, and repaired by the tenant. The Court noted that even if the notices were deemed to be vague, the parties had communicated extensively between the time of the first notice with the inspection reports and the date the default notice was sent. The tenant could have asked for clarification as to what needed to be repaired but did not.

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