When the Landlord/Tenant Court Isn’t the Correct Place to Hear a Commercial Landlord-Tenant Dispute

November 14, 2014

Children's Learning Area New Jersey law has very specific procedures to deal with landlord-tenant disagreements, including a special subset of Superior Courts — the Landlord/Tenant section of the Special Civil Part. This Landlord/Tenant court is where nearly all of these cases are heard, but not quite all. In the recent case of a child development center and its landlord, the New Jersey Appellate Division concluded that the issues presented were so complex that the matter should have been tried in Law Division, where the rules of court procedure operate differently and the parties could have engaged in more extensive discovery.

The case stemmed from a rent dispute between Academy House Child Development Center and its landlord, Benjoray, Inc. After taking possession of the rental space, the tenant discovered that the space was 15 percent smaller than the landlord had indicated. The tenant tried to reach out to the landlord but got no reply. So the tenant paid the landlord the agreed-upon monthly rent, minus 15 percent.

The landlord, in turn, sued the center in landlord/tenant court. The tenant asked to move the case to regular civil court (the Law Division), but the judge declined. The judge determined that the issues were routine and uncomplicated, and the case could be resolved simply by analyzing the terms of the lease. The judge ruled for the landlord, deciding that the tenant’s rent was not based upon square footage and that it inspected the property and accepted it “as is.”

The center appealed the judge’s refusal to transfer the case from landlord/tenant court and won. The case, as filed, was a summary dispossession proceeding, and New Jersey law lists several factors governing whether a summary dispossession should be transferred away from landlord/tenant court. One of these criteria is when the issues are so complex that the case requires the sort of discovery or other pre-trial litigation procedures that fall outside the bounds of a summary dispossession case.

This case needed that sort of broader discovery. The appeals court disagreed with the trial judge’s ruling that the only deciding factor was whether the lease document tied the tenant’s rent to the amount of square footage. Even though it did not, the tenant made out a case that the landlord’s statements about the space’s size led the center to sign the lease. This sort of negligent misrepresentation required more discovery than the procedures of landlord/tenant court allow.

The ruling in this appeal should serve as a lesson to both commercial landlords and tenants. Not all issues are as black-and-white as they might initially seem, and not all landlord-tenant disputes go through landlord/tenant court. One of the substantial aids to success is having an experienced and skilled legal professional on your side to help you deal with the issues you encounter. For advice and representation you can rely on in dealing with your commercial landlord/tenant matters, consult the real estate attorneys at Samuel C. Berger, P.C. Our New Jersey real estate attorneys can help you understand the issues before you and formulate a plan to deal with them. Reach us online or call (201) 587-1500 or (212) 380-8117.

Contact us through our website or call to schedule your free, confidential initial consultation today.

More Articles:

Landlord Wins on Security Deposit, Loses Rent and Damages Claims in Appellate Division, New York & New Jersey Real Estate Lawyer Blog, Oct. 10, 2014
Indemnity Clause in Lease Puts Commercial Tenant on Hook for Accident on Stairs Outside Tenant’s Premises, New York & New Jersey Real Estate Lawyer Blog, Sept. 12, 2014
Lease Contract’s Terms Let Building Owners Escape Liability for Injury Suffered by Tenant’s Employee, New York & New Jersey Real Estate Lawyer Blog, Aug. 29, 2014

Photo: Tomwsulcer at Wikimedia Commons.