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Let’s Make a Deal: The Practical Side of NJ Illegal Apartments & the Relocation Benefit

The dynamics of dealing with a NJ illegal apartment can be tricky. In general, an illegal occupancy is one that violates the local zoning or building code laws. For example, in Jersey City many illegal apartments are an additional third rental unit in a two family zone. When a landlord seeks to evict a tenant from this illegal occupancy, the landlord must pay six times the monthly rent to the tenant. Usually, the relocation benefit comes up in the context of an eviction for nonpayment. When the tenant finds out his/her apartment is illegal, the first step is to stop paying the rent. By this time the landlord is cited by zoning or building code enforcement for maintaining the illegal occupancy. When the tenant stops paying the rent, the landlord files an eviction for nonpayment case. Once everyone shows up in court, what happens next?

In a recent case, I represented a Tenant who lived in an illegal apartment. A two family home built fairly recently with a third illegal rental unit behind the garage. Zoning and building code were aware of the unit and were on their way to citing it. The Landlord filed an eviction for nonpayment case against the Tenant and here we were. The Landlord raised an interesting proposition: Instead of giving the Tenant a six month lump sum payment, how about giving 5 months and letting the Tenant live in the unit for another month rent free? After all, everyone knows it takes a while to find a new place to live.

The Landlord’s proposal is totally contrary to case law on the subject. The foundational illegal apartment case is Miah v. Ahmed, 179 N.J. 511, (2004). In Miah, the landlord wanted to deduct unpaid rent for the Relocation Benefit. The NJ Supreme Court ruled that a landlord has no right to set-off from the Relocation Benefit. To me, no right to set-off means no right to past set-off (unpaid rent) or future set-off (living for a free month). Based on this, the Tenant rejected the Landlord’s offer and demanded the full benefit. A day later, the benefit was paid.

While most landlord-tenant cases can be settled, it’s important that the settlement be fair. When illegal apartments are involved, my position is always that the full Relocation Benefit must be paid. The timing and circumstances of the payment can be negotiated, but the amount should always be six times the monthly rent. Miah v. Ahmed makes it clear that the Relocation Benefit is not subject to reduction, whether negotiated or not.

The simplicity of the illegal apartment Relocation Benefit is beguiled by the intersection of local relocation ordinances and the nature of the illegality alleged of the apartment. Before demanding a Relocation Benefit, a tenant should consult an attorney to determine the effect of any local laws and ordinances on the Relocation Benefit statute. Further, not all citations by city officials give rise to an illegal apartment. A tenant’s right to relocation benefits is a powerful one, but it must be executed the right away. A consultation with Offit Kurman can help a tenant along the road of securing the Relocation Benefit from their landlord.

Since the facts of each circumstance vary, a tenant should consult an attorney with his/her specific circumstances. Offit Kurman practices landlord tenant law throughout New York and New Jersey assisting tenants in avoiding unnecessary and costly delays. The firm’s geographic practice area includes: New York City (Manhattan, New York County, Brooklyn, Kings County, Queens, Queens County, Bronx County, Staten Island, Richmond County) and New Jersey (Jersey City, Hoboken, Bayonne, Hudson County, Newark, Essex County, Woodbridge, Middlesex County). The Firm invites you to visit the “Promises” page for our new way of doing business. Contact us today for a guaranteed free initial consultation.