On Monday, June 3, 2019, the New Jersey Senate Community and Urban Affairs Committee will meet in Trenton, NJ to consider two notable bills concerning residential tenancies, namely, Senate Bill 1151 and Senate Bill 3124.
First, Senate Bill 1151 seeks to expand liability of certain individuals associated with limited liability companies and other commercial entities when such entities are acting as residential landlords. Specifically, the bill provides that, in addition to retaining the ability to hold a commercial entity itself liable for housing code charges, building code charges, health code charges, and charges issued under the “Hotel and Multiple Dwelling Law,” (“HDML”) P.L.1967, c.76 (C.55:13A-1 et seq.), a court may hold the members of a limited liability company, the managers of a manager-managed limited liability company, and the directors and officers of a corporation, jointly and severally liable for such charges, so long as certain enumerated factors are established.
Second, Senate Bill 3124 would require New Jersey courts to provide tenants a grace period of three (3) business days after the date on which an eviction order or lockout is executed due to late payment of rent, to submit a payment of rent and, the landlord would be required to relinquish control of the property to the tenant. The bill would further require a landlord to accept all payments, made by any means, including but not limited to cash payments, personal checks, or payments made by third parties such as rental assistance programs or charitable organizations on behalf of the tenant. A landlord who violates any provision of this bill will be subject to a penalty of not more than $500 for each offense.
It is not hard to imagine the potential abuse that this bill would allow for, especially in cases where landlords have expended substantial time and effort to evict non-paying residential tenants. Where a landlord is required to accept the promise of a personal check and, in turn, be required to return possession to a defaulting tenant, only to soon thereafter find that the check bounced, defies logic and would unfairly penalize innocent landlords by unreasonably delaying the time for recovering possession.
Businesses involved in the residential tenancy business should keep a close eye as these bills exit committee. The potential for personal liability under S1151 coupled with the potential for harm to landlords under S3124 is substantial.