Eviction Court Had No Authority to Cut Tenant’s Rent

December 24, 2019

What Happened: After spending more than $45,000 for improvements, a tenant claimed that it discovered that the premises it leased for five years for use as a hair salon was only 452 square feet rather than the 600 square feet the landlord represented. So the tenant asked for a rent break. When the landlord refused, it stopped paying rent, prompting the landlord to sue for eviction. The tenant claimed that the landlord made false representations about the square footage of the property and asked for the lease to be rescinded.

What Happened: After spending more than $45,000 for improvements, a tenant claimed that it discovered that the premises it leased for five years for use as a hair salon was only 452 square feet rather than the 600 square feet the landlord represented. So the tenant asked for a rent break. When the landlord refused, it stopped paying rent, prompting the landlord to sue for eviction. The tenant claimed that the landlord made false representations about the square footage of the property and asked for the lease to be rescinded. But the New Jersey tribunal set up to rule on these claims (called the Special Civil Part) did none of the above, deciding to keep the lease intact while reducing the monthly rent from $1,300 to $871. Although the tenant was satisfied, the landlord cried foul.

Decision: The New Jersey appeals reversed the ruling.

Reasoning: The court cited the tribunal for making two mistakes:

  • Reducing the rent and effectively rewriting the lease, which exceeded the tribunal’s legal authority; and
  • Believing the tenant’s allegations about the square footage without holding an evidentiary hearing to determine if they were true.

As a result, the court sent the case back down so a trial could be held to sort out all of the various claims.

  • Best Wishes, LLC v. Mahogany’s, LLC, 2019 N.J. Super. Unpub. LEXIS 2531

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