I understand that in NJ you can vacant a 1-3 unit home upon your move in date by stating that you intend to move in. How is your move in defined or tracked? What is the minimum time you have to live there? A year?
Say the minimum is more like a year, can you get around this by just subletting your unit for that time using a sublet agreement or guest agreement or having "roommates"?
Replies
Anthony thank you for your response. Thank you Edgardo
I was just revisiting this post as I have an opportunity now that rests upon this same issue. Just to clarify, Anthony, you're saying in your second post that the McQueen case decided that even if you change your mind about living there during eviction/closing, you have to still keep one of the units as your own (i.e. not rented) for the first six months of ownership.
Guys:
Just get some rats and release them in the basement and hallway. Repeat as needed.
So much simpler !!
PS. I wanted to add that there IS a mandatory period of time set forth within the statute where the good faith occupancy must occur, and that time period is 6 months. (See N.J.S.A. 2A:18-61.6.) So even where the occupancy is part-time under the good faith exception as established by NJ Supreme Court in the McQueen case, that part-time occupancy must occur for at least 6 months.
Yes, that is why the Court imposed the "good faith" requirement. It must be in good faith, and not just a ploy each time you use it, or else it would fail the Court's test.
Ethan Borshansky said:
Thanks. I like what you raise in the last paragraph but would find that a bit of a risky menuever. It just seems too obvious; anyone can say they really did intend to move to the property, but just changed their mind. And if you do this repeatedly with every duplex you buy, I assume it would raise flags.
Ethan, I thought you should know that there was a case that went all the way to the NJ Supreme Court on this exact issue, and it established the prevailing law for NJ as to “owner-occupied”. The law is strict as to the “owner” being the occupant (not roommates, etc.) But it also does not mean you have to live there for years, or that you have to live there full time.
In a nutshell, the Anti-Eviction Act requires that eviction of a tenant be based upon cause, and those causes are set forth and defined in the law. An exception exists, as you noted, when an owner of a building with 3 residential units or less seeks to personally occupy a unit, or has contracted to sell the residence to a buyer who wishes to personally occupy it and the contract for sale calls for the unit to be vacant at the time of closing. In such instance, at the end of the lease term the owner can evict the tenant without “cause”. If it is a month-to-month tenant, they can essentially be evicted upon one month’s notice.
But there have been challenges to a landlord’s use of the “owner-occupied” exception when a tenant claims that the owner does not “occupy” the property. The problem is that the statute uses the word “residence”, but that that word is not defined in the statute. Under law, you can have more than one “residence”, but you can have only one “domicile”. In McQueen v. Brown, 342 N.J. Super. 120 (App. Div. 2001), aff’d 175 N.J. 200 (2002), the Court was faced with an owner who had two residences and lived at the subject property on a part-time basis (weekends, holidays and vacations). At the trial court, the judge concluded that this was insufficient to satisfy the “owner-occupied” exception. But this decision was reversed by the Appellate Court (and the Appellate Court’s decision was upheld by the NJ Supreme Court), when the Appellate Court analyzed the legislative intent of the statute in-depth and found that “owner-occupied” did not mean “permanently occupied”. Part-time occupancy “in good faith” qualifies under the statute. In another similar case (only decided at the trial court level, and thus the precedential value is weaker), an owner successfully used the “owner-occupied” exception even though she did not live at the property. She maintained a beauty shop on the first floor, and thus when she sought to evict a tenant on the second floor using the “owner-occupied” exception, she was successful since the judge concluded that her work at the beauty shop caused her to be present to the same extent as if she resided there. Lewis v. Traynham, 234 N.J.Super. 121 (Law Div. 1989).
Another question that has not been sufficiently clarified is whether an eviction under the “owner-occupied” exception is legal where the “intention” of the parties involved in a sale of property subsequently changes (post eviction). The exception can be used where the owner is selling the property, the purchase contract provides that the buyer intends to live in one of the units after closing, and the purchase contract requires that the property be vacant at closing. What happens if the buyer’s intention changes and he/ she does not move into the property subsequent to closing? In reality, the tenant would already be evicted so it is unlikely that they would raise a challenge. But I believe it could be upheld as a legal eviction as long as the original intent of the buyer was true and in good faith – just as the Court relied upon “good faith” occupancy in the McQueen decision. Give me a call if you are having problems; you have my number from the last time. Anthony L. Velasquez, Esq.
Also very curious how this is or isn't any different in a 1-3 unit REO, especially when there's say one stubborn tenant still there for whatever reason.