Your client has signed a contract to sell real
property and the closing date is approaching. Everything is running
smoothly except for one minor problem. The purchaser intends to occupy
the property and there is a tenant in possession on a month to month
basis with no written lease. What are the steps to take in order to
have the property vacant in time for the closing?
A Notice to Quit must be served in all instances
upon the tenant in accordance with N.J.S.A. 2A:18-61.1(l). If
you have a commercial tenant in possession and no more than 2 rental
units, a one month notice will suffice. A residential tenant is
entitled to treble damages plus attorney’s fees and costs in the
event that the purchaser-owner does not personally occupy the unit for
a total of 6 months or rents the property to another tenant or
converts the property. (N.J.S.A. 2A:18-61.6 a,b).
In the event the tenant does not willingly vacate
the premises, a summary dispossess action is filed in the Superior
Court of New Jersey, Special Civil Part. In the event the tenant is
being evicted for non-payment of rent, a Notice to Quit does not have
to be served. In the event the tenant is being disorderly and
disruptive, a Notice to Cease must be served prior to instituting the
eviction action. The Notice to Quit must be in writing, must terminate
the tenancy and demand possession of the property. The Notice must
comply with N.J.S.A. 2A:18-61.2. The effective date of the
Notice to Quit depends upon the grounds for eviction and usually runs
a calendar month or on anniversary date of the tenancy. The seller
should not accept rent after termination date in Notice as the
acceptance of the rent voids the Notice to Quit.
Before instituting any action for possession,
sellers should be aware that they are responsible for filing a
registration statement with the municipality and/or the Department of
Community Affairs, except for owner occupied 2 family units. Single
family or 2 unit non-owner occupied properties must be filed with the
municipality. For the contents of the registration statement, see N.J.S.A.
46-8-28. The registration statement must be served on each tenant and
is a prerequisite to the entry of a judgment for possession. The Court
can postpone the entry of judgment for possession for up to 90 days to
The seller should also be aware of the Security
Deposit Act, N.J.S.A. 46:8-19 et seq. The Act only
applies to residential tenants and is limited to l-l/2 months rent.
Upon closing of title, notice should be sent to the tenant advising
that the security deposit was assigned to the purchaser, advising that
all future rent payments should be made to the purchaser, giving the
purchaser’s full name and address.