PRACTICAL GUIDE TO EVICTIONS AND RENT COLLECTION DURING THE COVID-19 PANDEMIC
With many non-essential businesses in New Jersey shut down and unemployment at its highest rate since the Great Depression, many landlords are now faced with the difficult decision of whether to evict their tenants who cannot or will not pay rent. As most landlords know, evicting a tenant, especially a residential tenant, is a difficult endeavor at the best of times and the COVID-19 pandemic has introduced a host of new challenges. This article will examine the current status and changes to the court system, provide a practical guide to evictions and actions for unpaid rent, and demonstrate why, despite the difficulties caused by COVID-19, landlords may want to consider seeking legal action sooner than later.
Residential Evictions. There have been a host of laws and executive orders passed concerning evictions to protect residential tenants. Most notably, the “eviction moratorium” in Governor Murphy’s Executive Order No. 106 and P.L.2020, c.1 prohibits the eviction of any residential tenant in New Jersey until at least two months following the end of the Public Health Emergency or State of Emergency. However, this law is only limited to actual evictions and not the tenant’s obligations under their lease to pay rent. To date, there have been no laws or executive orders that excuse a residential tenant from paying rent or complying with any other requirements under the lease. P.L.2020, c.1 further provides that “eviction and foreclosure proceedings may be initiated or continued during the time of an executive order.” Thus, on paper, it appears that landlords can proceed with a normal eviction process and will only have to wait until two months after the end of the State of Emergency to evict. But, in practice, this is far from the truth.
The Landlord-Tenant Courts, and all Special Civil Part Courts including small claims (SC docket) and Municipal Courts, have been the most heavily impacted courts by the COVID-19 pandemic. Unlike standard civil courts, which have transitioned to functioning remotely with the exception of jury trials, all Landlord-Tenant Courts have been suspended since March 14, 2020. Most recently, the Supreme Court’s April 24th Omnibus Order, which is a general order that guides all New Jersey Courts, has extended the suspension of Landlord-Tenant trials until May 31, 2020. This means that while landlords may file an eviction complaint, the Landlord-Tenant Court will not take any further action except to provide a docket number and will not begin scheduling trial dates until after May 31, 2020. Similarly, the sheriff will not serve the complaint on the tenant until after a trial date is scheduled. Thus, with unclear dates for eviction trials and the two-month “eviction moratorium,” landlords are placed in a difficult position. But despite these issues, it is still worthwhile to consider taking action now, as waiting to file for eviction can lead to additional unforeseen delays.
Landlord-Tenant Courts throughout the state have stated that they are currently backlogged with eviction complaints filed during the COVID-19 pandemic and that after May 31, 2020, eviction trials will be scheduled in the order they were received during the suspension with trials that were originally scheduled to be heard in late March and April but were delayed due to the suspension to be heard first. As a result, if a landlord is considering eviction, it would be wise to take action sooner than later to preserve their place in line as it is unclear how long it will take the courts to clear the current backlog of filings. If landlords delay in moving to evict, they may be required to wait a substantial time for a trial date.
Commercial Tenants. Unlike residential tenants, there have been no laws or executive orders passed that provide any relief to commercial tenants including the two-month “eviction moratorium.” Thus, in theory, commercial landlords should be able to proceed with eviction under the terms of their lease and evict non-paying tenants without issue or delay. But in reality, the aforementioned suspension of Landlord-Tenant Courts until May 31, 2020, has in effect created a stay of commercial evictions. Since eviction trials will not be scheduled, let alone heard, until after May 31, 2020, landlords that delay in filing to evict may be required to wait months for a trial date.
As stated, the Landlord-Tenant Courts will schedule trials in the order they were received since the suspension, beginning after May 31, 2020. Thus, the longer a commercial landlord waits to file, the further back they will be “in line” for a trial date. Unlike residential tenants who must wait two months after the State of Emergency to evict, commercial landlords may immediately request the court to issue a warrant for eviction on the trial date and have the sheriff lock out the tenant days later. As a result, moreso than residential landlords, commercial landlords are advised to take action sooner for non-paying tenants since a delay in filing to evict can greatly extend the time a landlord must wait for their trial to be scheduled. This may potentially saddle the landlord with a non-paying commercial tenant for months after the Landlord-Tenant Court resumes.
Nonpayment of Rent. In New Jersey, to collect unpaid rent for either residential or commercial tenants, landlords must file a separate action in either the Special Civil Part (small claims under $15,000) or the Law Division. Before the pandemic, landlords universally sought to have their claims for unpaid rent heard in Special Civil Part since they could receive a judgment for unpaid rent in a matter of weeks rather than go through the long and arduous process of a standard action in the Law Division, which provides much longer discovery timelines and increased costs. However, like the Landlord-Tenant Courts, the Special Civil Part Courts have been suspended through May 31, 2020. The Special Civil Part Courts are similarly backlogged with complaints filed throughout the suspension and will schedule trials in the order they were filed. As a result, for all claims under $15,000, landlords should consider either filing their claim as soon as possible to get their place in line or filing their claim in the Law Division where the deadlines are more certain.
Strategizing how to proceed with evictions and actions to collect outstanding rent during the COVID-19 pandemic requires a delicate balance of legal rights and obligations, practicalities and business sense. Winne Banta has assisted its clients in achieving such a balance for almost a century. If you have any questions about managing the landlord and tenant relationship, evictions, litigation, or the impact of COVID-19 on you or your business, please contact Winne Banta’s COVID-19 Recovery Team at 201.562.1002.
See Executive Order No. 122 (April 8, 2020)
Heaher Long and Andre Van Dam, U.S. unemployment rate soars to 14.7 percent, the worst since the Depression era, Washington Post, May 8, 2020, (https://www.washingtonpost.com/business/2020/05/08/april-2020-jobs-report/)