RESPONDING TO A LAWSUIT
Lawsuits arising from claims between landlords and tenants, or between community associations and unit owners, are unfortunately not uncommon. Whether acting as the Plaintiff or Defendant, it is important to understanding the basics of each type of suit before initiating or replying.
Landlords and Tenants
The most common lawsuit is between tenant and landlord is an eviction action for nonpayment. In New Jersey, in these cases, the landlord sues for a judgment of possession; meaning the landlord is not awarded money, rather he is awarded possession of the apartment. By extension, this means that, if the tenant pays any outstanding amount owed, it is for the purpose of avoiding eviction.
If the tenant does not pay, and the landlord still wishes to be paid the money due pursuant to the lease agreement, the landlord must file in a separate lawsuit against the tenant. This claim would not be brought in the Landlord-Tenant division of the court, but in the Small Claims, Special Civil, or Law divisions.
Although not as common as eviction actions, lawsuits are can occur after a tenant vacates an apartment and the landlord fails to return the security deposit according to the Security Deposit Law. In many cases, a landlord will hold the security deposit to pay for damages to the apartment or to cover unpaid rent pursuant to the lease. A tenant who feels that there were no damages in the apartment, or who believes that rent was paid, may choose to sue the landlord for the return of the security deposit.
In cases such as these, the landlord will often counterclaim against the tenant for those damages or unpaid rent. These suits are so common that Small Claims court has added an increased jurisdictional limit pertaining only to these lawsuits. If a tenant sues for the return of the security deposit, the jurisdictional limit is $5,000.00; all other suits are limited to $3,000.00.
The landlord-tenant relationship is so close that lawsuits can take place at any point in the tenancy pertaining to almost any matter. This sentiment also holds true for community associations.
Community associations often bring collection actions against unit owners that have failed to pay maintenance fees. A community association usually has the ability pursuant to its governing documents to file a lawsuit, a lien, and foreclosure action if a unit owner fails to pay these fees.
However, unit owners are also known to sue associations. unit owners can bring lawsuits either against the association as a whole or against individual Board Members who are believed to have breached a fiduciary duty to the unit owners.
Community association law and Landlord-Tenant law both have some common suits.
For example, if the governing documents permit, in certain situations community associations can act as an Attorney-in-fact for a unit owner that chooses to rent out his unit. In these cases, the association can then bring institute an eviction proceeding against a tenant in the Landlord-Tenant division of the court.
Both associations and landlords fall under the requirements of the Fair Housing Act. Accordingly, both are responsible to refrain from discriminating in the providing of housing. Both associations and landlords must provide reasonable accommodations or modifications. The failure to provide such an accommodation or modification may result in a tenant or unit owner suing or, alternatively, requesting that the Department of Housing and Urban Development (HUD) investigate. Suits relating to discrimination, reasonable accommodations, and reasonable modifications are costly; but may also lead, in some cases, to six-figure recoveries. In addition to the monetary damage these suits may inflict upon an association or landlord, these suits have the potential to significantly harm an association or landlord’s reputation.
Tort cases such as slip-and-fall litigation are common in both areas. An association must reasonably maintain its common elements, just like a landlord must maintain its property. Tenants or unit owners that slip and fall will sue their landlord or association. The association or landlord may, in turn, institute a third-party claim against the contractor hired to maintain the property. Additionally, in these cases, the insurance providers for the association, landlord and third-party contractor will likely become involved in the litigation.
Settling or Continuing to Trial
After filing for eviction, most landlords will want to settle to create payment plans with tenants who fall behind in rent as a way to try to recoup the money it has not been paid. Additionally, for a variety of legal reasons, landlords are more likely to be paid when they reach a settlement with tenants, than if they proceed to eviction. However, certain tenants may be problematic and not including to honor payment plans, in which case the landlord may not wish to entertain settlement discussions.
Likewise, community associations in the process of foreclosing on a unit owner may find settlement a better alternative. Community association liens function uniquely as compared to other types of liens. When a community association forecloses pursuant to its lien, the association gains possession of the unit and, in most cases, the other mortgages (e.g., the bank mortgage) remain on the unit. What results is a community association owning a unit that may be mortgaged to a bank. This fact may make the unit difficult to sell, among other issues. Consequently, it may be in a community association’s best interest to settle and try to agree on a reasonable payment plan if the circumstances permit.
In the end, though, every case needs to be handled individually. Discussing all the eventualities with an attorney is the best way to determine whether settling or continuing to trial is the best response to a particular case.
There are numerous claims that can be brought by either party for violations of the law. The goal in such a close relationship is to strive for a good relationship. Largely, this requires compromise. However, when a compromise cannot be successfully obtained, the landlord or association must act in litigation.
For any questions about this blog, or to schedule a consultation with an attorney, contact Griffin Alexander, P.C. at 973-366-1188 or through our website here!
The information in this Client Alert is provided solely for information purposes. It should not be construed as legal advice on any specific matter and is not intended to create an attorney-client relationship. The information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based upon particular circumstances. Each legal matter is unique, and prior results do not guarantee a similar outcome.
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