On January 21, 2014 Governor Christie signed the Tenant Legal Fee Equality Bill which was a major victor for the New Jersey Tenants Organization. The Bill, that will go into effect on February 1, 2014 applies to all leases entered into on or after February 1, 2014.

Practically every lease written in the state has a clause that allows the Landlord the right to sue the Tenant for legal fees and costs in addition to whatever else they are suing for. The leases, written by property owners, do not grant the same right to the Tenant who hires a lawyer and wins in court. Ultimately the Tenant still loses because of the lawyers’ fees and costs.

The one-way legal fees can be intimidating to Tenants, even when the lawsuit against them is groundless. If the Tenant with a really good cause cannot afford competent legal counsel, they fear not only losing, which could mean eviction, but also having to pay the Landlord’s legal fees.

Under Senate Bill S-2018, in cases where the residential lease contains a clause setting forth that the legal fees are to be paid by the Tenant, the Tenant may also be compensated for their attorney fees in the event the Tenant prevails. In addition, any residential lease containing a legal fee provision must contain the following statement:

IF THE TENANT IS SUCCESSFUL IN ANY ACTION OR SUMMARY PROCEEDING ARISING OUT OF THIS LEASE, THE TENANT SHALL RECOVER ATTORNEY’S FEES AND EXPENSES FROM THE LANDLORD.

The new law follows many other states that have similar two-way requirements according to Matt Shapiro, President of the New Jersey Tenants Organization (NJTO), “our new law is actually better than laws in other states, because it requires tenants to be informed of their new right to legal fees using bold print right in the same lease clause that gives the right to the Landlord.”

The Act would not be enforceable against the Landlord in cases in which the Tenant, who owes money on the day of Court, has the case dismissed by paying the amount that is due and owing.

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