Landlord-Tenant Law in New Jersey

16 Replies

Hi BP community,

I am a first-time home buyer. I am going under contract for a property in New Jersey after giving up my search in New York. My property is a 3 family plus garden unit. So, I'm going to be a landlord soon! 

I know New York is notorious for its tenant friendly laws. Evictions are hard to complete and there's not much recourse for landlords. I was wondering whether New Jersey is the same. I'm still early in my own preliminary research, so I'd love to hear some first-hand landlord experiences of collecting pass-due rent, removing tenants from the property, evictions, and overall impressions of the landlord-tenant environment. 

To give some background, the seller wanted to deliver my property with 3 existing tenants paying within the lower 25% percentile of rent. I intend on charging the higher 75% percentile for rent. So, I requested the property be delivered vacant. My agent said the tenants are all month-to-month, so removing the tenants wouldn't be an issue. I could just simply notify them and they will leave (or the sheriff will remove them immediately). But coming from New York. It's not that easy. And I know that the very last thing I want to do is inherit tenants, even if they timely pay their rent because they won't be happy with my sudden rent increase.

So, I countered to the seller, that the seller either: (1) deliver vacant; or (2) arrange for the tenants to agree to my new licenses, which will have quite the rent increase.

Thoughts? 

1st, make sure that the rent being charged is the 25% of rent that you can charge, not New York prices, check all the comps in that area. Since the leases are Month to Month you can certainly request that the existing owner inform the existing tenants that the rent will increase once the property is sold to you, that alone may cause them to leave, and if not, you get the rent you wanted to charge anyway.

@Nick Louie most people would agree that NJ is a tenant friendly state. Having said that if you have tenants who are cooperative the best shot at getting them out would be to be reasonable with your requests and timeline. Since they are month to month you can increase the rents sooner rather than later, but this is a business and you don't want to create a bad business relationship. Keep them month to month, talk with the tenants, inform them you plan to get the rents to a certain number and give them a time frame so they can find another place to stay. Now if the units are in rougher shape it's will be tough commanding a higher rent obviously. I'm sure others will have their opinions as well but I don't mind breaking even or even going into the negative for a few months if it means getting the property stabilized and in a much stronger position for the long term.

I’ve had this convo in another thread. Cause when the rent is increased for i her tired tenants the first thing that comes to mind is the new renovated condition of units that are able to be rented at market rate rent.  It will be way more difficult to renovate units while tenants are still living there. Please keep me up to date with whatever decision you make 

Nick,

Congratulations on becoming a landlord!  NJ is a very tenant friendly state and eviction is no easy task.  Even if your tenants are month to month you will not be able to just remove them.  If they are paying there is no cause for eviction.  Your best bet would be to provide them with new leases with market rents.  Hopefully, they are cooperative and sign.  If they don't the original lease will stay in effect.  Month to month is essentially indefinite in NJ.  If they are non-paying you can file for eviction, but that can be a substantial timeframe.  Each county court is handling eviction differently.  I would check with investors in your properties county to see if the docket is moving at all.  Here in Camden County, the court is so back logged we are seeing months in delays.  God-speed sir.

@Joseph Guzzardi Jr

Well the thing is I could make it the seller’s responsibility to get the tenants out instead of inheriting unknown tenants I didn’t screen and who are paying below market rates.

The pros of inheriting the tenants is that I would get money from day 1. The con is I didn’t screen them, they are paying below market, and it seems like it would be a hassle to remove tenants, even if you ask nicely (e.g., still need to give them X amount of days notice, etc).

I’m just wondering if any investors/landlords had some experience with this.

My realtor made it seem as easy as nicely requesting the tenants to vacant.

@Kyle McCann

I agree with your assessment here. The best approach is to simply ask the seller to deliver the property vacant right?

My realtor was trying to talk me outta it because I might have some holding costs once I move into a 3 family with two vacant units. I think that’s just the price to pay to be able to screen my own tenants.

@Nick Louie

Nick, 

If you can have him deliver vacant, that would be incredible.  Yes your holding costs are higher month one, but rentals are at a premium right now.  You should have no issue filling it with tenants of your choosing.

@Nick Louie you could make it the sellers responsibility but they can also decline your request and your offer all together. It's still a competitive market in most areas of NJ and the seller can go elsewhere. I also talk from personal experience with inheriting my tenants and upping rents or moving on from them with their individual circumstances.

Originally posted by @Kyle McCann :

@Nick Louie

Nick, 

If you can have him deliver vacant, that would be incredible.  Yes your holding costs are higher month one, but rentals are at a premium right now.  You should have no issue filling it with tenants of your choosing.

I agree. I made my offer contingent on the property being delivered vacant. My realtor pushed back a little bit because I know it's more of a hassle to close the deal. We have to give the seller more time to give his tenants notice, etc. But inheriting unknown tenants seems to be a terrible idea, even if they are month-to-month. 

@Nick Louie

I personally would force the issue that you want to take the property vacant.

With the rent being below market at the moment the current tenants most likely will not be happy to a increase giving they have enjoyed the discounted cost.

The cost of carry on the vacant side comes with the game. Its better to have extra carrying cost insearch of the right opportunity then having a occupied unit that is paying below mark that doesnt want a increase or even pay at all if your going to evict them. The cost in that option will cost you much more then vacant carrying cost.

Best of luck. NJ is a great place to owner property if your in the right location. Rents are at a premium now

@Joe Edwards

I agree. I made my offer contingent on the property being delivered vacant or the current tenants agreeing to pay “market rate.” The seller accepted today.

Have you ever had to ask a tenant to vacant?

@Nick Louie NJ landlord rules can be tough but  if you have the right systems in place, you buy the right property in the right town the land lording rules don't mean much if you don't have trouble tenants from the start.  My wife and I have been landlords for over 7 years in NJ, we have received every months rent in that time and are yet to have to evict anyone.