In reading through the “Truth in Renting” literature, I understand why NJ has a reputation for being tenant friendly.
From what I understand, the landlord of a 4-unit building in NJ must allow a tenant to sign a new lease unless there is good cause. And yearly leases automatically convert to month-to-month at the end of the term. Are there any ways to avoid being locked into this?
For instance, could I include a clause in the lease stating that the lease terminates unless tenants take action? Something like:
“The lease expires upon the written date. Tenant must vacate on or before this date. Landlords may offer new lease if written request to renew is received 90 days prior to expiration. Month to month leases are not allowed.”
@Bruce Lynch sorry to answer your question with a question. But, why would you want to cancel the lease after 1 year? In my opinion, the landlord should want to keep tenants for longer periods of time. In my experience, the great killer of profit in real estate are vacancies. I have tailored my lease to call for an automatic annual renewal unless written notice to cancel is given 30 days prior to lease expiration. Assuming that I have been diligent in selecting a tenant and they are meeting their end of the lease, I can’t think of a reason why I would want to end it early.
i Agree with @David Vitarelli . If you are concerned maybe you can put a clause saying something like: 60 days prior to the end date of the lease the landlord will make his/her intentions known if the lease will be renewed or terminated?
Thanks for the replies. Everyone’s situation is always a little different. I just saw a 4-unit that will have carryover tenants. I’d like to get tenants in place that I screen and at higher rent rate. So I wouldn’t want to be locked into keeping the inherited tenants longer than required. I also want the option open to convert a rented unit for personal use and/or Airbnb rental in a couple of years.
The truth in renting guide makes it seem like a 4-unit property owner has to offer new lease unless there is ‘cause’ not to. So it is possible to include language in the lease that avoids automatic conversion to month-month and doesn’t require the landlord to renew?
You can offer a new 12 month Lease (with a rent increase) 30 days prior to the expiration of your Lease. That's what we do. Haven't gotten much pushback on that one.
Ah maybe I’m not explaining what I want to do well enough.
I want the option to NOT offer a new lease. Can I have them sign a lease stating that they will vacate at end of term if no action is taken to offer a new lease?
Or would NJ landlord/tenant regulations entitle tenants to continue leasing? It seems like in NJ, if no action is taken, then the lease on a unit in a 4plex would convert to month-month.
I am not a lawyer, but if you tried to enforce such a provision by evicting someone who wants to stay and has not broken any other provision of the lease, my opinion is that you will likely not prevail. That is why the statute is there - to tell you what grounds for eviction exist. "because I want them out" is not permissible grounds for eviction in NJ. "because I want to do a more thorough background check" is not permissible grounds. You as landlord get the permissible reasons for eviction as laid out in the Truth in Renting handbook AND NO OTHERS.
The best approach is to inform the tenant that if they want to renew the lease for another year, the rent will increase by X amount - and it must not be an unconcionably large amount or violate the rent control laws - and if they agree to the increase, they stay.