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A Tenancy Without a Written Lease: Who Lives in My Building? The Problem with Assignment & Subletting

Oral residential tenancies in New Jersey are an invitation to chaos. A prior post explained the basic terms of an oral tenancy. Those terms are the amount of the rent and the size of the space. Equally important is the identity of the tenant and the landlord’s right to know who occupies its property. Often, a landlord will purchase a multi-family building and find unauthorized occupants in apartments presumably rented to a named tenant. Without a written lease defining the tenants, the question is: Who is the tenant in the apartment and what rights (if any) do they have?

Oral tenancies are the “Wild West” of the landlord-tenant world. Adding to this chaos is a little known (but problematic) common law principle regarding assignment and subleasing. The common law provides that “assignment and subletting are a natural incident to the leasehold estate. They cannot be restricted unless by express stipulation to that effect.” Berkeley Dev. Co. v. Great Atl. & Pac. Tea Co., 214 N.J. Super. 227, 234 (App Div. 1986). This means that purely by virtue of having a possessory interest in a space (a tenancy) a tenant has the attendant right to assign or sublease the space. Simply put, because a tenant possess a space, he/she can sublease that space to someone else. Without a written lease, this right exists even if the landlord objects. The Appellate Division held: “…if a lease does not contain a provision restraining the lessee from subletting, the lessee may do so at its option, even over the landlord’s objection.” Berkeley Dev. Co. v. Great Atl. & Pac. Tea Co., at 234. This nightmarish principle affects everything from a landlord’s utility bills, to safety of the other tenants and even insurance.
The only way to terminate the presumptive right to assignment and subletting is to alter the terms of the tenancy by way of Notice of Quit. In 279 4th Ave. Management LLC v. Mollett, 386 N.J. Super. 31 (App. Div. 2006), the Court addressed a landlord’s attempt to change the rent due date. The tenant occupied a rent controlled apartment on month-to-month lease. The Court required that the Landlord serve a Notice to Quit and offer a new tenancy with a differing rent due date. A prohibition on assignment and subletting is no different. It is a term of the tenancy akin to the rent due date. The only way to alter it is by serving a notice to quit. The requirement of Notice compels a landlord to follow the strict criteria of the Anti-Eviction Act (N.J.S.A 2A:18-61.1. et. seq.). A failure to follow the Anti-Eviction Act will create more delays and even more frustration.
Prohibiting assignment and subleasing is not the only issue arising from oral tenancies. Offit Kurman LLC practices landlord tenant law throughout New Jersey assisting landlords and tenants in resolving disputes and avoiding unnecessary and costly delays. The firm’s geographic practice area includes: New Jersey (Jersey City, Hoboken, Bayonne, Hudson County, Newark, Essex County, Woodbridge, Middlesex County, Paterson, Passaic County, Bergen County). The Firm invites you to visit the “Promises” page for our new way of doing business.