National Housing Law Project Housing Law Bulletin

In a bold and apparently unprecedented move, the New Jersey Supreme Court recently moved to protect pro se tenants in summary eviction proceedings. The action came as part of the Court's reversal of a decision to dispossess a tenant from a Section 8 development for nonpayment of rent. Community Realty Management, Inc. v. Harris, A-82-97 (N.J. July 20, 1998).

The case arose when the tenant, Ms. Harris, failed to pay her rent of $133 in July of 1995. Her landlord, Community Realty Management, Inc. (hereafter "Community Realty"), filed a complaint for summary dispossession for nonpayment of rent. Included in the rent demand were claims for prior charges, damages, contract charges and attorneys' fees for a grand total of $379.50.

On the return date of the summary proceeding, Ms. Harris appeared in court without counsel. Prior to hearing individual cases, the trial court gave all the appearing parties some general instructions, which did not include an instruction that a judgment for possession would be entered against those tenants who failed to pay their rent in full by 4:30 p.m of that same day. Thereafter, the court recessed and Ms. Harris advised Community Realty's counsel that she was unable to pay the $379.50 that was claimed. Community Realty's attorney, in turn, informed the court clerk who entered a judgment for possession. At the time, Ms. Harris told the clerk that she would make payment in full within 11 days, which she did.¹ After she made the payment to the clerk of the court, Ms. Harris was directed by the clerk to the office of Community Realty's attorney, where she signed a consent agreement staying the issuance of a warrant for removal until December 31, 1995. Based on conversations Ms. Harris had with Community Realty's attorney and his paralegal, she believed that, upon expiration of the six-month stay, she would be able to continue to reside in the unit if she made all payments during the interim months.

In November 1995, Community Realty advised Ms. Harris of her agreement to vacate the apartment on December 31. When she did not vacate, Community Realty sought and obtained a warrant for her removal. Ms. Harris, represented by an attorney for the first time, filed an order to show cause, seeking to vacate the judgment for possession. The trial court held a hearing on the matter and — after hearing testimony from Ms. Harris, Community Realty's attorney and paralegal — refused to vacate the judgement. It found the terms of the consent decree to have been clear and that Ms. Harris should have understood them. The court further determined that the judgment should not be set aside for equitable reasons because, in its view, Ms. Harris' circumstances were not unlike those of most low-income tenants and thus did not meet the "exceptional" standard it believed was needed to set aside the judgment for possession under Morristown v. Little, 135 N.J. 274 (1994), a prior New Jersey Supreme Court decision. On appeal, the appellate division affirmed the trial court's decision in an unpublished decision.

A unanimous New Jersey Supreme Court reversed the decision, finding that the procedures followed by the trail court were not adequate to protect prose tenants, and that the trial court should have vacated the judgment under Little.

In reaching its conclusion, the Court found fault with several aspects of the lower court's actions and decisions. First, the Court found the entry of judgment by the clerk of the court during a recess to be improper, as it did not constitute a jural act because no form of judgment or order was ever entered as required by court rules. Thus, no proper form of judgment was ever entered in the case.²

Second, the Court found that the evidence did not support the trial court's finding that Ms. Harris understood, or should have understood, the consent decree that she had executed as requiring her to vacate the unit at the end of December even if she made all payments due during the six months' stay. To the contrary, the Court found that the testimony elicited from Community Realty's attorney and paralegal during the hearing held by the trial court supported Ms. Harris' understanding that she would be entitled to remain in the unit if she made all payments during the stay. Since Ms. Harris' understanding of the decree differed from the document, the Court concluded that Ms. Harris did not have a knowing and intelligent understanding of what she had signed, and that Ms. Harris should be entitled to relief from any execution of the warrant for removal.³

Third, the Court also found that Ms. Harris was not precluded from challenging the inclusion of various non-rent charges and fees in the judgment for possession that was first entered by the clerk of the court. The Court allowed the challenge both because Ms. Harris was unrepresented at the trial court proceedings and because her challenge relates to the jurisdiction of the court to consider charges or fees as additional rent claimed to be part of the basis for eviction.⁴

When fees and charges not authorized by law or the parties' private agreements are included in the arrearages that give rise to a judgment for possession, a pro se tenant's consent to judgment for possession represents a mutual mistake.⁵

The Court went on to find that, by virtue of its owning and operating a Section 8 development, Community Realty was subject to HUD regulations that precluded it from including late charges in the demand for rent. Moreover, it found no clear provision in the lease that authorized Community Realty to collect attorneys' fees as part of the rent in a dispossess proceeding.⁶ Consequently, the Court concluded that the cumulative effect of including these fees and charges in the calculation of rent due prejudiced whether Ms. Harris could have avoided the entry of judgment for possession against her on the day of return.⁷

Lastly, the Court found, contrary to the trial court's conclusion, that Ms. Harris' circumstances were exceptional and more compelling than those of the defendant in Little, supra. Consequently, it concluded that the trial court should have vacated the judgment for possession. In so doing, the Court considered significant the fact that Community Realty was a Section 8 landlord, that Ms. Harris had two minor children and that an eviction would visit hardship on the family, that she paid the excessively demanded rent within 11 days after judgment for possession was entered, that she was not advised of the proper amount she could pay in order to avoid the judgment of possession, that the trial court failed to announce that the judgment for possession could be avoided if payment were to be made by 4:30 p.m. of that same day, and that the judge failed to explain to her the legal effect of a consent judgment, hardship stay or warrant for removal.⁸

In addition, the Court found that the real reason Community Realty delayed the warrant of removal rather than agree to a reinstatement of the lease after the six-month stay was its desire to remove Ms. Harris from the complex due to unspecified actions of her son which Community Realty could not prove in court. Because this reason was unrelated to the good cause required for invoking the court's jurisdiction (i.e., nonpayment of rent), the Court viewed Community Realty's conduct as contrary to the public policy embodied in New Jersey's Anti-Eviction Act and the Landlord Tenant Anti-Reprisal Law.

To permit execution of the warrant of removal in this case would permit a landlord to use the Anti-Eviction Act as a tool for retaliation. Summary dispossess proceedings based on late payment of rent are "designed to secure performance of the rental obligation." They are not intended to be used to evict tenants for unrelated purposes.⁹

Having found fault with the procedure followed by the trial court, the New Jersey Supreme Court called for a rewriting of the court rules governing landlord-tenant court proceedings in New Jersey and specified the form that those rules must take. Among the protections that the Court required are (1) a provision that prohibits evictions based on the failure to pay charges other than rent unless there are specific lease provisions authorizing their collection and the inclusion of such provisions is not prohibited by federal law; and (2) a requirement, in cases where a consent judgment for possession is used, that landlords submit an affidavit establishing the jurisdictional good cause requirement for evictions prior to the entry of the consent judgment or agreement.

¹  In New Jersey, a tenant who pays the full amount that is due within 11 days of entry of judgment of possession is entitled to seek a six-month stay of the judgment for removal from the court. Typically, if during the six months' stay the tenant makes all payments that are due, she is entitled to remain in the unit under the old lease. Apparently, to lessen the burden on the courts, landlords and tenants frequently enter into consent decrees that have the same effect as the stay upon the tenant's paying the full amount due within 11 days of entry of the judgment for possession.
²  Community Realty Management, Inc. v. Harris, slip op. at 15-16.
³  Id. at 16-21.
⁴  Id. at 21-22.
⁵  Id. at 22.
⁶  Practitioners should be aware that the New Jersey Supreme Court failed to note that HUD regulations do not authorize the inclusion of excess charges, such as attorneys' fees, in rent. See 24 C.F.R. §§ 5.603, 5.613 and 42 U.S.C.A. § 1437a(a)(1).
⁷  Id. at 27.
⁸  Id. at 29.
⁹  Id. at 30 (citations omitted).