NJ Tenant Rights in Foreclosure

Tenants rights in a NJ Foreclosure before and after the NJ Sheriff Sale

Tenants rights in a NJ Foreclosure before and after the Sheriff Sale


At the law Offices of Patel, Soltis and Cardenas we represent both landlords and tenants. We understand landlord and tenant rights during the foreclosure process and the bankruptcy process.  We have had bankruptcy clients that have had landlords that did not understand the Foreclosure Process or the Bankruptcy Process which led to landlords not enforcing their rights.  Imagine a landlord failing to evict a tenant for over a year without the tenant paying rent because they did not how lift the automatic stay in bankruptcy.

On the flip side we also represented an owner who purchased a home at foreclosure where the “supposed tenants” had a 3-years lease $1,000 under market rent. Once we were involved the tenants with the bogus lease left within 15 days without us having to go through the eviction process. Knowing your rights as the landlord or the tenant is the first step towards making sure you are not taken advantage.

What are a tenants’ rights when their home is being Foreclosure in New Jersey

You are protected by the New Jersey anti-eviction statutes. 2A:18-61.1. The AntiEviction Act was created to protect blameless tenants from eviction and was adopted in recognition of the housing shortage in the State of New Jersey.

The list of reasons that a tenant can be evicted in New Jersey include:

  1. Failure to Pay Rent – Additional rules apply if the tenant is in federally subsidized housing or if the rent was used to pay for utilities that the landlord was supposed to pay.
  2. Disorderly Conduct – A written Notice to Cease disorderly conduct needs to be given at least 3 days prior to bring the eviction action.
  3. Damage or Destruction to the Property – If the tenant intentionally or “by reason of gross negligence” caused or allowed destruction, damage or injury to the property. A Notice to Quit must be served on the tenant at least 3 days prior to bring the eviction action.
  4.  Substantial Violation or Breach of the Landlord’s Rules and Regulations – A Notice to Quit must be served on the tenant at least one month prior to filing the suit for eviction and the tenant must not have corrected the issue.
  5. Violation or Breach of Covenants or Agreements Contained in the Lease – A Notice to Quit must be served on the tenant at least one month prior to filing the suit for eviction. Public Housing tenants have additional protections.
  6. Failure to Pay Rent Increase – A Notice to Quit must be served on the tenant at least one month prior to filing the suit for eviction. The rent increase must not be unconscionable and must comply with all other laws or municipal ordinances, including rent control.
  7. Health and Safety Violation or Removal from the Rental Market – A Notice to Quit must be served on the tenant at least three months before filing a suit for eviction. The tenant can’t be evicted until relocation assistance is provided. Reasons include:
    1. The landlord has been cited by an inspector and needs to board up or demolish the property because of substantial health and safety violations. It also has to be “financially difficult” for the landlord to fix the violations.
    2. The landlord needs to fix health and safety violations and it is not possible to do so,while the tenant resides at the property. Additional notices need to be provided to the State.
    3. The landlord needs to correct an illegal occupancy and it is not possible to correct this violation without removing the tenant. (In this case the tenant may be entitled to 6-months rent Pursuant to N.J.S.A. 2A:18-61.1g Relocation of displaced tenant; violations, penalty)
    4. A governmental agency wants to permanently take the property off the rental market, so that it can redevelop or clear land in a blighted area.
    5. Any tenant evicted under g. 3) (illegal occupancy) is entitled to relocation assistance in an
      amount equal to six times the tenant’s monthly rent. The landlord is responsible for paying the
      tenant’s relocation expenses. Any tenant who does not receive the required payment from the
      landlord at least five days prior to his or her removal from the premises, may receive payment
      from a revolving relocation assistance fund established by the municipality. The landlord will be
      required to repay the money to the municipality.
  8. The Landlord Wants to Permanently Retire the Property from Residential Use – No legal action can take place until the current lease expires and a Notice to Quit must be served on the tenant at least 18 months prior to filing the
  9. Refusal to Accept Reasonable Changes in the Terms and Conditions of the Lease – A Notice to Quit must be served on the tenant at least one month before filing suit for eviction. If after written notice the tenant refuses to accept reasonable changes the landlord may file suit for eviction and the court will determine if the proposed changes are reasonable. Let’s use a pet addendum as an example. The land lord may have had a no pet policy in the lease.  The tenant above you now has a pet.  The new lease may have a clause for a pet addendum allowing people to have service pets.  Refusing to the sign the lease because of this could lose a tenant his or her home.
  10. Tenant Continuously Fails to Pay Rent or Habitually Pays Late – After written Notice to Cease and a Notice to Quit that must be served on the tenant at least one month before filing a suit for eviction the landlord can begin eviction
  11. Conversion to Condominium, Cooperative or Fee Simple Ownership – The current lease must expire and a Notice to Quit must be served on the tenant at least three years before filing a suit for eviction. No legal action may be taken until the lease expires. There are additional rules that sometimes apply to tenants and owners, and it is best to discuss with a NJ Landlord/Tenant attorney.
  12. Tenancy Based on Employment –
  13. A Notice to Quit must be served on the tenant three days prior to filing a suit for eviction if the tenant has the property on the condition of employment with the owner and the employment is terminated.
  14. Conviction of a Drug Offense Committed on the Property –  A Notice to Quit must be served on the tenant at least three days prior to filing suit for eviction. Juveniles who are adjudicated delinquent have additional rights that must be taken into account.
  15. Conviction of Assaulting or Threatening the Landlord, His Family or Employees – A Notice to Quit must be served on the tenant at least three days prior to filing suit for eviction. Juveniles who are adjudicated delinquent have additional rights that must be taken into account.
  16. Civil Court Action that Holds Tenant Liable for Involvement in Criminal Activities – A Notice to Quit must be served on the tenant at least three days prior to filing suit for eviction. Juveniles who are adjudicated delinquent have additional rights that must be taken into account.
  17. Conviction for Theft of Property – A Notice to Quit must be served on the tenant at least three days prior to filing suit for eviction

Does a NJ Landlord have to honor a NJ Lease after Foreclosure and a Sheriff Sale?

Yes, the new owner that is purchased the property has to honor the lease in most circumstances. There’s only a certain amount of enumerated grounds upon which an eviction can be filed in the state of New Jersey which are listed above.  If the lease is a fraudulent lease, the new owner will most likely file for eviction.

So if you’re paying your rent on time while the owner is in foreclosure and you have you have a lease agreement that says you still have six months left on the lease. The new owner most likely has to honor that lease. They can’t just remove you. In addition to that, after the lease has expired in those six months, if you continue to pay your rent, you are still protected by the anti-eviction statute.

Most of the time a new owner after a NJ Sheriff Sale can’t just remove you because they want to remove you. The new owner needs to have grounds. As an example a valid reasons for filing an eviction may be that the land lord raises the tenants rent after the lease expires and the tenant refuses to pay the increase. If the grounds are a rent increase that does not violate any statutes, and you didn’t pay the rent increase that’s a valid ground. Another valid reason for removing a tenant from a single-family home is  when the new owners want to occupy the home for themselves or a family member.  We have even been part of evicting multiple families from a 3-family home as the owner wanted to convert the entire property into a one-family unit for himself.

If you’ve missed your rent payments obviously that’s for valid ground. Imagine not paying rent for 6 months and the new owner demands the rent.  We have seen this happen where someone as a tenant stops paying rent to the landlord because they find out the landlord is in foreclosure and the landlord gives up.  Technically until the home is foreclosed the landlord is entitled to rent even if they are in foreclosure.  The bank then bought the home at the sheriff sale.  At which point the bank was entitled to rent under the lease when the deed transferred ownership. Six months went buy before the home was sold and rent was never paid. When the new owner demanded the back rent suddenly the tenants with the $1,150 a month lease for a four-bedroom apartment in downtown Jersey City didn’t feel like having an eviction on their record.

Remember, if you are still a tenant in a property that was foreclosed in New Jersey, you still have rights. There are ways to preserve those rights. Make sure that you continue doing what you are supposed to be doing under your lease. Honor the lease and act the way that the lease requires you to act as a tenant. That’s important for tenants to know. The court requires notices to be sent to tenants prior to evictions except for non-payment of rent. There also some provisions in the law that state that if tenants do not receive these notices there are penalties against the people foreclosing. If you find your self being evicted, reach out to an NJ Landlord Tenant attorney.  If you received a default eviction without being notified, you may be able to file an order to show cause to get your day in court or even an emergency bankruptcy may be able to give you time to fix the situation.

My tenant has a fraudulent lease after a NJ foreclosure. What Can I do as a landlord?

This firm has spoken with a lot of purchasers of foreclosures who thought they were stuck honoring bogus leases created by the Ex-owners. Ex-owners at times try to create preferential leases for their former tenants or family members. As an example, a owner in foreclosure may say look my cousin, grandmother, and or brother lives in apartment number two. I want to give them a five-year lease below market rent so they are protected for five years in the property. Voila. They figured it out.

BUT, you know what, they didn’t figure it out. Because what’s gonna end up happening is the purchaser is gonna bring the tenant to court and have the court review the lease for fairness. Most likely the court will say this is a sham lease. This is a five-year lease below market rent. No one signs five-year leases. Then they identify this person as a relative of the person who was foreclosed. If you are the owner of a property keep that in mind. Leases sometimes will be reviewed and be put in front of a judge. If you’re trying to circumvent the law and trying to keep possession even though you’re not entitled to possession the courts have been there and done that. If you and I yeah if you enjoyed the content this video please hit like and subscribe please.

I am a tenant whose home was foreclosed in NJ, how do I get my Damage Deposit back?

If the former landlord doesn’t return your damage deposit when the home is foreclosed, the new owner would need to issue you the refund. This may not sound fair to the new owner, however  N.J.S.A. 46:8-20 and 46:8-21 make the new owner responsible.

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