Bill Text: NJ S280 | 2024-2025 | Regular Session | Introduced
Bill Title: Codifies and enhances use of breach of implied warranty of habitability as defense to certain eviction actions.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced) 2024-01-09 - Introduced in the Senate, Referred to Senate Community and Urban Affairs Committee [S280 Detail]
Download: New_Jersey-2024-S280-Introduced.html
STATE OF NEW JERSEY
221st LEGISLATURE
PRE-FILED FOR INTRODUCTION IN THE 2024 SESSION
Sponsored by:
Senator BRIAN P. STACK
District 33 (Hudson)
SYNOPSIS
Codifies and enhances use of breach of implied warranty of habitability as defense to certain eviction actions.
CURRENT VERSION OF TEXT
Introduced Pending Technical Review by Legislative Counsel.
An Act facilitating use and enforcement of the common law implied warranty of habitability to remedy substandard living conditions in residential rental property and supplementing Title 2A of the New Jersey Statutes.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. a. A warranty of habitability shall be implied in every written lease, oral lease, or rental agreement for residential premises, warranting that the premises so leased or rented, including the areas used in common with other tenants or residents, are fit for human habitation and for the uses reasonably expected and intended by residential tenants, and that the occupants of the residential premises shall not be subjected to any conditions which would be dangerous, hazardous, or detrimental to their life, health, or safety, or to the livability of the residential premises. The procedures and remedies set forth in this section are intended to facilitate the enforcement of the implied warranty of habitability by the courts, and shall not be construed to hinder or limit the ongoing judicial construction and development of the implied warranty of habitability. Tenants shall be entitled to assert and receive the maximum protections and remedies cumulatively available under State and federal statutory, administrative, and common law, and nothing in this section shall be construed as limiting a tenant's right to seek the maximum protections possible from all sources.
b. (1) A tenant may assert a breach of the implied warranty of habitability as a defense or set-off in a landlord's eviction action for non-payment of any rent withheld. The defense may assert a breach of the implied warranty of habitability with regard to any condition which commenced during the twelve months immediately preceding the filing of the eviction action, provided that the landlord had received prior actual or constructive notice of the condition. If the breach is proven, the tenant's rental obligation shall be reduced to the reasonable rental value of the property in its defective condition during the period of occupancy, and the tenant shall be entitled to an offset in the amount of the cost of all repairs made by the tenant which the landlord was obligated but failed to make. Such reduction in rent:
(a) shall be retroactive to the date the landlord had actual or constructive notice of the defective condition or conditions, but no more than twelve months prior to a landlord's filing of the eviction action, unless the tenant had commenced rent withholding at any earlier date; and
(b) shall continue prospectively until the landlord corrects the breach.
(2) Nothing in this section shall limit a tenant's right to file an affirmative action for a retroactive rent reduction covering any or all months of occupancy during which a defective condition is alleged to have existed.
c. (1) A tenant who asserts a breach of the implied warranty of habitability as a defense or set-off shall not be required to deposit outstanding rent with the court, except as otherwise required under this subsection.
(2) If a tenant asserts a breach of the implied warranty of habitability as a defense in an action for the non-payment of rent, based, in whole or in part, on an alleged code violation or defective condition of the residential premises, the court shall, prior to hearing the matter, order an inspection of the premises by the appropriate code enforcement official or officials having jurisdiction over the subject matter of the alleged breach. Within 30 days of the date of the court order, the code enforcement official shall inspect the premises and prepare and deliver to the court a written report identifying all code violations and defective conditions existing at the residential premises, and describing the extent to which the health or safety of residents are impaired or threatened by the condition of the premises. The court, in its discretion, may extend the time within which a code enforcement official shall deliver a report under this paragraph. The court shall provide a copy of a code enforcement official's report to other tenants of the residential premises, and upon request, to any member of the general public.
(3) After review of any report or reports prepared pursuant to paragraph (2) of this subsection, and after providing the parties notice and an opportunity for a plenary hearing on the issue of breach of the implied warranty of habitability, the court shall determine if a breach has occurred. If the court determines that a breach of the implied warranty of habitability has occurred, the court shall:
(a) order the reduction, or return as the case may be, of any or all of the rent claimed due for any of the months under consideration by the court;
(b) establish, after consideration of the facts and circumstances relevant to both the tenant and landlord, a reasonable payment schedule for the payment of the rental balance found due and owing;
(c) specify each item of work, each action, or both, that a landlord shall perform to remedy the breach;
(d) establish a schedule for the commencement and completion of each item of work, each action, or both, necessary to remedy the breach; and order the landlord to commence and complete the specified items of work and actions in accordance with the established schedule;
(e) order the tenant to deposit with the court, until further order of the court, all or a portion of any prospective rental payments that shall become due during the pendency of the schedule established pursuant to subparagraph (d) of this paragraph, along with all or a portion of any rental payments which become due pursuant to a payment schedule established pursuant to subparagraph (b) of this paragraph;
(f) provide for the remedies available to either party should the payment schedule not be met without good cause;
(g) transmit a copy of the report or reports prepared pursuant to paragraph (2) of this subsection, along with any additional information the court, in its discretion, determines to be pertinent, to the Division of Codes and Standards in the Department of Community Affairs; and
(h) transmit a copy of the report or reports prepared pursuant to paragraph (2) of this subsection, along with any other information the court, in its discretion, determines to be pertinent, to any agency that administers a State or federal housing subsidy with regard to the residential property that is the subject of the action.
(4) (a) Notwithstanding any other law or regulation to the contrary, the court may, either prior to or after holding a hearing on the issue of breach of the implied warranty of habitability pursuant to paragraph (3) of this subsection, and after affording the parties notice and an opportunity to be heard, issue an order compelling the landlord, until further order of the court, to deposit with the court all or part of any State or federal housing subsidy which the landlord receives in relation to the residential property that is the subject of the action.
(b) The court shall control disbursement of amounts deposited with the court pursuant to this subsection, in the manner it deems appropriate, to ensure the amounts are expended for the sole purpose of: (i) providing and maintaining basic utilities and services to the tenants, including but not limited to water, heat, gas, electricity, and security, and (ii) completing each item of work, and undertaking each action, necessary to remedy a breach or breaches of the implied warranty of habitability determined by the court under this section. The court shall institute appropriate controls to protect against fraudulent use of these amounts, which may include: requiring inspections and reports by code enforcement officials; requiring the landlord to submit documentation, such as estimates and receipts from contractors, to the court; and allowing tenants to review and comment on submitted documentation and the progress of work. If a matter is transferred to an administrator or receiver, as authorized pursuant to subsection g. of this section, control over the disbursement of amounts deposited with the court shall be transferred to the administrator or receiver.
d. Without limitation, the court shall consider all relevant factors in determining whether a landlord has breached the implied warranty of habitability at the tenancy's inception or at any subsequent time. The court shall apply all relevant factors that have been developed by the courts under the implied warranty of habitability, and shall apply additional relevant factors applicable to the facts and circumstances at issue with the goal of providing the tenant with a habitable dwelling unit.
e. Any agreement by a tenant or a prospective tenant of a dwelling waiving or modifying any protections or rights related to the implied warranty of habitability shall be void as contrary to public policy.
f. In determining the amount of rent reduction or damages to which a tenant shall be entitled as a result of a breach of the implied warranty of habitability, the court need not require any expert testimony.
g. Should the court determine at any time during the proceedings, either pursuant to an application by one of the parties or on its own motion, that some or all of the conditions that may justify the appointment of an administrator pursuant to P.L.1971, c.224 (C.2A:42-85 et seq.) or a receiver pursuant to P.L.2003, c.295 (C.2A:42-114 et al.) are present in the matter before it, the court shall immediately transfer the matter to the appropriate division of the Superior Court for expedited proceedings in accordance with the provisions of the applicable aforementioned statute, including the summary appointment of a receiver.
2. This act shall take effect immediately.
STATEMENT
This bill would codify and expand upon the court-created doctrine of the implied warranty of habitability in order to enhance the use of the doctrine as a defense to residential eviction proceedings. This will help prevent the eviction of unsophisticated tenants and help ensure that rental housing in our State meets reasonable standards of habitability.
Tenants have the right to safe, sanitary, and decent housing. New Jersey courts recognize that residential leases carry an "implied warranty of habitability." This means that a landlord has a duty to maintain the rental unit and keep it fit for residential purposes throughout the entire term of the lease and that the landlord must repair damage to vital facilities. If the landlord breaches the landlord's obligation of maintaining the property at an adequate standard of habitability, a tenant may withhold the rent or a portion of the rent to be used as a set-off, because of the deficient condition. If the landlord institutes an eviction proceeding for non-payment of rent, the tenant is entitled to use the landlord's breach of the obligation to provide a habitable residence as a defense and justification for the set-off (deduction of rental payment).
An eviction is an actual expulsion of a tenant out of the premises. A landlord must have good cause to evict a tenant. There are several grounds for a good cause eviction. If a tenant fails to pay rent, the landlord may immediately take legal action to have the tenant evicted. Although a tenant may assert a breach of the implied warranty of habitability as a defense in a landlord's eviction action for non-payment of rent, the defense is rarely raised.
Under the bill, a tenant may assert a breach of the implied warranty of habitability as a defense or set-off in a landlord's eviction action for non-payment of rent withheld. A tenant may assert a breach of the implied warranty of habitability with regard to any condition which commenced during the twelve months immediately preceding the filing of the eviction action, provided that the landlord had received prior actual or constructive notice of the condition. If a tenant proves a breach, the court would reduce the tenant's rental obligation to the reasonable rental value of the property in its defective condition, and the tenant would be entitled to an offset in the amount of the cost of all repairs made by the tenant which the landlord was obligated but failed to make. The rent reduction would be retroactive and continue prospectively until the landlord corrects the breach.
Additionally, the bill provides that a tenant who asserts a breach of the implied warranty of habitability as a defense or set-off would not be required to immediately deposit outstanding rent with the court. Instead, the bill sets forth a process, which would include: a code enforcement official's inspection of the premises for the existence of code violations and defective conditions, and the preparation of a report identifying code violations and defective conditions, and documenting the extent to which the health or safety of residents are impaired or threatened by the condition of the premises. After the court's review of the report, and after providing the parties notice and an opportunity for a plenary hearing on the issue of breach of the implied warranty of habitability, the court would determine if a breach has occurred.
If the court determines that a breach of the implied warranty of habitability has occurred, the court would:
· order the reduction or return, as the case may be, of the rent claimed due for the months under consideration;
· establish a reasonable payment schedule for the payment of the rental balance found due and owing;
· specify each item of work, each action, or both, that a landlord must perform to remedy the breach;
· establish a schedule for the commencement and completion of each item of work, each action, or both, necessary to remedy the breach; and order the landlord to commence and complete the specified items of work and actions in accordance with the established schedule;
· order the tenant to deposit with the court all or a portion of prospective rental payments that will become due during the pendency of the schedule established for the commencement and completion of work, along with all or a portion of any rental payments which become due pursuant to a payment schedule established pursuant to the bill;
· provide for the remedies available to either party should the payment schedule not be met without good cause;
· transmit a copy of the code enforcement official's report, and other relevant information, to the Department of Community Affairs; and to any agency that administers a State or federal housing subsidy with regard to the residential property that is the subject of the action.
The bill also empowers the court to compel the landlord to deposit with the court all or part of any State or federal housing subsidy which the landlord receives in relation to the residential property that is the subject of the action.
The court would control disbursement of amounts deposited with the court to ensure the amounts are expended for the sole purpose of: providing and maintaining basic utilities and services to the tenants, including but not limited to water, heat, gas, electricity, and security; and completing each item of work, and undertaking each action, necessary to remedy a breach or breaches of the implied warranty of habitability. The court would institute appropriate controls to protect against fraudulent use of these amounts, which may include: requiring inspections and reports by code enforcement officials; requiring the landlord to submit documentation, such as estimates and receipts from contractors, to the court; and allowing tenants to review and comment on submitted documentation and the progress of work.
The bill provides that if the court determines that some or all of the conditions that may justify the appointment of an administrator pursuant to P.L.1971, c.224 (C.2A:42-85 et seq.) or a receiver pursuant to P.L.2003, c.295 (C.2A:42-114 et al.) are present in the matter before it, the court must transfer the matter to the appropriate division of the Superior Court for expedited proceedings in accordance with the provisions of the applicable statute. If a matter is transferred to an administrator or receiver, control over the disbursement of amounts deposited with the court would be transferred to the administrator or receiver.
Finally, the bill specifies that any agreement by a tenant or a prospective tenant of a dwelling waiving or modifying protections or rights related to the implied warranty of habitability are void as contrary to public policy.
