Dealing With Repairs and Maintenance on Your NJ Commercial Rental Property

December 27, 2013

Flooded Room Commercial landlords do not have to deal with the same volume of legal rules intended to protect their tenants as residential landlords face, but it is still wise to ensure that all sides have a clear agreement regarding repairs and maintenance, to avoid problems such as a tenant mounting a claim of constructive eviction. A recent ruling from the New Jersey Superior Court, Appellate Division offers some further clarity on just how pervasive problems must be to constitute constructive eviction.

Generally speaking, unless the parties agree otherwise within the terms of a lease, a commercial tenant takes possession of a rental property “as is.” New Jersey law has, however, erected certain protections for commercial tenants. Specifically, New Jersey law offers commercial tenants implied warranties which state that the maintenance condition of a property cannot be so poor that it deprives the tenant the benefit of the leased property.

In one of the key rulings in this area, Reste Realty Corp. v. Cooper, the New Jersey Supreme Court in 1969 sided with a commercial tenant whose space flooded with every rainstorm due to an errantly constructed driveway forcing water into the tenant’s basement unit. The court decided that the state of disrepair deprive the tenant of the use of the space and constituted a constructive eviction of the tenant.

Early this month, the Appellate Division’s ruling in Puccini Foods, LLC v. Abbott Industries, Inc. clarifies that the sort of constructive eviction described in Reste Realty requires a functional inability to use virtually the entire property. In the Reste Realty case, every time rain fell, the tenant’s entire space became filled with several inches of water, frequently causing the tenant to move furniture or leave the property and conduct its business elsewhere.

In the Puccini Foods case, the court refused to find a constructive eviction, because the area subject to the tenant’s complaints was only a small fraction of the entire space it leased from the landlord. As one example, one of the tenant’s central complaints regarded a broken skylight, but that condition only impaired the tenant’s use of 100 square feet of a 4,000-square-foot space.

One way to simplify this process is to negotiate the terms of repair and maintenance within your lease, and craft a clear and unambiguous covenant governing those terms. In negotiating and composing your maintenance and repair covenant, you should consider, and specifically address, each of the following areas: the interior of the leased space, the exterior of the property, the building’s roof, along with alterations, additions, improvements or replacements.

Addressing issues of repair and maintenance, like many other commercial landlord-tenant matters, requires clear communication, negotiation and lease drafting. With an unambiguously worded lease agreement, both sides can reduce the likelihood of disputes requiring court intervention. For assistance with negotiating and creating the covenants of your commercial lease, consult the real estate attorneys at Samuel C. Berger, P.C. Our New Jersey real estate attorneys are experienced and knowledgeable, and their diligent representation can help you get the lease terms your business requires. Reach us online or call (201) 587-1500 or (212) 380-8117.

Blog Posts:

Saxophonist Stymies IRS, Persuades Tax Court that His Music Was a Profit Business, New York & New Jersey CPA Tax Lawyer Blog, Nov. 8, 2013
Federal Court Blocks City Ordinance That Penalizes Businesses Employing Undocumented Workers, New York & New Jersey Immigration Lawyer Blog, Nov. 5, 2013
New York and New Jersey Entrepreneurs May Be Able to “Crowdfund” Their Businesses Soon Under New Federal Rules, New York & New Jersey Business Lawyer Blog, Oct. 24, 2012
Photo credit: U.S. Fish and Wildlife Service Southeast Region at Wikimedia Commons.