With the enactment of Senate Bill No. 3691 and Executive Order 249 issued by Governor Murphy and the United States Supreme Court vacating the CDC imposed eviction moratorium, landlords are left wondering whether the eviction moratorium is actually over. The answer to that question is “maybe,” as it depends upon the nature of the case (nonpayment vs. holdover, residential vs. commercial), the income level of the tenant and whether a residential tenant signed a New Jersey Eviction and Homeless Prevention Certification (“Certification”), which was prepared by the Department of Community Affairs. The purpose of Senate Bill No. 3691 is to gradually phase out the state eviction moratorium based on individual renters’ situations while mandating special protections for those who were unable to pay rent during the period of March 1, 2020 through August 31, 2021 or, for certain tenants through December 31, 2021.
On August 26, 2021, the Supreme Court of the United States concluded that the CDC exceeded its authority in enacting its nationwide eviction moratorium. Therefore, the CDC imposed eviction moratorium cannot be used by tenants to stay evictions moving forward.
On August 4, 2021, Governor Murphy signed Senate Bill No. 3691 into law and issued Executive Order 249. Based upon the law and Executive Order, the eviction moratorium imposed by Executive Order 106 was rescinded. Trials and lock-outs of residential tenants based upon grounds for eviction other than nonpayment of rent, habitual late payment of rent and failure to pay a rent increase can proceed after August 31, 2021. The moratorium with respect to commercial tenants was already lifted.
Evictions of residential tenants based upon nonpayment of rent, habitual late payment of rent and failure to pay a rent increase can proceed after August 31, 2021, depending on the tenant’s household income and whether a tenant submits to a landlord or to the Court a Certification.
The Certification asks the tenant to certify under penalty of perjury that the tenant’s household income is below 80% of Area Median Income (AMI), that the tenant was unable to pay rent due, a rent increase or paid rent late because of circumstances arising from COVID-19 and someone from the household applied for rental assistance.
For those tenants submitting a Certification (provided it’s true), and their household income does not exceed 120% of AMI, under the new law, eviction action based upon nonpayment of rent, habitual late payment of rent or failure to pay a rent increase that accrued during the period beginning March 1, 2020 and ending August 31, 2021, must be dismissed and all rent due from March 1, 2020 through August 31, 2021 can only be pursued through a collection action. The Court, on notice to a landlord, will be administratively dismissing these cases.
Additionally, if the tenant’s Certification indicates: (1) that the household income does not exceed 80% of the area median income, (2) that they were unable to pay rent due to circumstances arising from the COVID-19 pandemic, and (3) that they have applied for state and local rental assistance for which they are eligible, this protection is extended through December 31, 2021.
· Tenants who have a household income of 80% of AMI or less, have eviction protection for rent that becomes from due March 1, 2020 through December 31, 2021, if they sign the Certification.
· Tenants who have a household income that ranges from 80% to 120% of AMI and who sign a Certification have eviction protection for rent that becomes from due March 1, 2020 through August 31, 2021.
· Tenants who have a household income of more than 120% of AMI may be evicted for nonpayment of rent after August 31, 2021.
Keep in mind that under the new law, the Governor has the ability prior to December 31, 2021 to revoke or modify the law with respect to the eviction moratorium if there is substantial evidence that hospitalizations and deaths due to the COVID-19 pandemic are likely to recur or substantially worsen if an extension is not ordered.
Notwithstanding the foregoing, if a tenant submits a certification, the unpaid rent which accrued during the aforesaid period will still be due and owing but may only be pursued in a collection action where a money judgment is obtained. Landlords cannot sell or assign the debt to a third-party debt collector.
If the tenant receives rental assistance, landlords must waive any late fees for unpaid rent payments for the period in which rental assistance is paid.
Because of the enormous amount of eviction cases relating to nonpayment of rent, the Court will be directing tenants to complete the Certification and landlords are required to attach to each Complaint filed a Notice to all Landlords and Tenants notifying them of how the new law affects tenant and landlord rights. The Notice must be in English and Spanish. Also, under the law, owners are required to post a notice (see below) in a conspicuous location within the common area. This notice was prepared by the Department of Community Affairs. The following are the links to obtain the information.
DCA Letter to landlords regarding posting requirement (in English and Spanish)
DCA Notice to all Landlords and Tenants (in English)
DCA Notice to all Landlords and Tenants (in Spanish)
In addition, a Notice to the Bar was recently issued, which provides for an adjournment of a scheduled court date if there is a pending COVID-19 Emergency Rental Assistance Program (CVERAP) application. In such an instance, the Court will grant the adjournment for 60 days or longer if exceptional circumstances exist.
The new law also provides extensive protections to tenants. Landlords are prohibited from disclosing a tenant’s nonpayment or late payment of residential rent or failure to pay a rent increase which accrued from March 1, 2020 through August 31, 2021 to credit reporting agencies and to other landlords. As stated above, the landlords also cannot sell the debt or assign the debt to third party debt collectors. This information also cannot be used to deny a prospective applicant from becoming a tenant. A fine may be imposed against the landlord should the landlord violate the law after given notice and the opportunity to cure the violation.
Governor Murphy also signed a law which makes eviction filings from March 9, 2020 through August 31, 2021 confidential and prohibits a landlord from considering such eviction filings when considering the application of the tenant.
Finally, the eviction process itself has changed dramatically. Going forward, all cases will proceed virtually unless there are exceptional circumstances. Technology rooms are available in the courthouse for tenants and landlords to appear if they do not have the technology. New forms have been created and reforms have been implemented at each phase of the eviction process, from filing through post judgment relief.
Going forward, “mandatory” settlement cases will be scheduled but if either party does not appear, no default will be entered; just a trial date will be scheduled. Also, as of September 1, 2021, a Landlord Case Information Statement (“LCIS”) must be prepared for each Complaint filed. The LCIS must be filed for all pending cases and for all new cases. Tenants must submit a Tenant Case Information Statement. There will be case management conferences and settlement conferences prior to trial. However, prior to the conferences, the registration statement filed with the DCA and the lease must be submitted to the Court five days prior to the conference. LT specialists have been hired by the Court to perform enhanced review of cases that involve public housing, subsidized housing and holdover cases.
Implementation of these reforms have just started and we anticipate more changes in the future. We will keep you abreast of any new developments as they arise.
This information is provided solely for information purposes. It should not be construed as legal advice on any specific matter and is not intended to create an attorney-client relationship. The information provided herein may not be applicable to all situations and should not be acted upon without specific legal advice based upon particular circumstances. Each legal matter is unique, and prior results do not guarantee a similar outcome.