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Community Associations and Tenants | Part 3 – Leasing Resolutions and Lease Riders

October 24, 2011 Posted in Community Association Law

This is the third of 4 blog posts concerning tenant issues within community associations. In Part 1, I explained why a prohibition on tenants is either impermissible or highly unlikely. In Part 2, I explained that it is not a good policy for an association to require credit checks or background checks of potential tenants. Here in Part 3, I will explain about leasing resolutions and lease riders.

Many times, owners will lease their homes without the Association’s knowledge. While this may already be a violation of the governing documents, there are even more every day practical problems this could cause. Therefore, a leasing resolution should require, at a minimum, the following:

  • Leases must be written and for a minimum term (as specified in the governing documents);
  • Copies must be provided to the Association;
  • Contact information for the owner/landlord and tenant must be provided to the Association;
  • The incorporation of and the signing of the Association’s lease rider - The lease rider will provide that the lease is subject to the Association’s governing documents and Rules and Regulations, and any amendments that may be made from time to time. Failure by the tenant to comply with the terms and conditions of such documents shall be deemed a material default under the lease and may be grounds for termination of the lease and a possible eviction proceeding.
  • Assignment of rents – Agreement that if the owner/landlord is delinquent in the payment of maintenance fees and charges, the Association may contact the tenant for the delinquent amounts. A signed agreement by the owner/landlord complies with the Fair Debt Collection Practices Act.

The timing of obtaining the lease rider is critical. The optimal time is to have it signed at the commencement of the “tenancy,” the time when the tenant moves in. This is different than the commencement of the “lease” or any renewal period, where the tenant may already be living in the home, hopefully with a lease.

If, therefore, after passage of a leasing resolution, a new tenant moves in and resides in the home (a new “tenancy”) without signing the Association’s rider, the Association could only penalize the owner for failing to comply with the resolution. Depending on the terms of the lease, and hopefully there is one, it may be harder to argue that the Association’s governing documents and rules and regulations are a material part of the lease.

For existing tenancies, the matter becomes more complicated because it touches on aspects of New Jersey’s Anti-Eviction Act of N.J.S.A. 2A:18-61.1, et seq. The owner would have the burden of either obtaining the tenant’s voluntary consent to sign lease rider as part of a renewal or the owner must be required to serve the tenant a Notice to Quit and prosecute an eviction in accordance with N.J.S.A. 2A:18-61.1i. N.J.S.A. 2A:18-61.1i provides, in part, that a tenant may be evicted when, “[t]he landlord or owner proposes, at the termination of a lease, reasonable changes of substance in the terms and conditions of the lease, including specifically any change in the term thereof, which the tenant, after written notice, refuses to accept[.]”

For more information, please contact Griffin Alexander, P.C. at (973) 366-1188.

DISCLAIMER - This posting is intended to provide general information and is not intended as specific legal advice or to establish an attorney-client relationship.

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