USA - NEW JERSEY Law and Practice Contributed by: Steven Fleissig, David Freylikhman, Cory Mitchell Gray and David Jensen, Greenberg Traurig LLP
6.19 Right to Terminate a Lease In this jurisdiction, both landlord and tenant typi - cally have a right to terminate in the event of a condemnation by a governmental authority and/ or a casualty event that either exceeds a dollar amount or requires a stated period for remedia - tion. In addition, landlords reserve the right to terminate a tenant’s lease if that tenant defaults on its lease obligations and fails to cure following notice from the landlord. In a retail lease, tenants often seek the right to terminate the lease if they fail to hit certain revenue milestones; all such rights are often referred to as a “kick out”. Recently, early termination clauses have become more prevalent whereby tenants can terminate a lease prior to expiration by giving notice to the landlord together with payment of a termination fee of a fixed amount plus reimbursement of a portion of the landlord’s unamortised leasing costs such as its build-out expenses and bro - kerage commissions paid. 6.20 Registration Requirements Leases in New Jersey are not required to be reg - istered. A memorandum of lease may be record - ed in the land records of the county in which the leased premises are located upon payment of nominal filing fees and costs. The Flood Hazard Disclosure Law, which applies to leases in New Jersey after 20 March 2024, requires landlords to make detailed flood risk disclosures when renting property to tenants. This new legislation aims to protect prospective tenants in New Jersey from unforeseen damages and financial losses in the face of issues associ - ated with climate change. Accordingly, landlords will be required to provide tenants with a Flood Risk Notice which contains questions about the flood risk of the property based on the landlord’s actual knowledge. The notice also contains
added information about flood insurance avail - able through FEMA’s National Flood Insurance Program and provides information about the effects of climate change on flood risks in New Jersey. Although the new law does not expressly distinguish between residential and commercial leases, it does specify that for residential leases, the notice must be provided as a separate rider to the lease, signed or acknowledged by the ten - ant. 6.21 Forced Eviction In New Jersey, a landlord may terminate a lease and force the tenant to vacate its premises in the event of a default under the lease, such as failure to pay rent. Self-help is generally not permitted; the eviction process is pursued in court. The tim - ing of the process varies but in a non-payment or rent case the process, from notice to judgment, should be expected to take no less than three months. Given the eviction moratorium that was in place from 2020 through early 2022, the evic - tion process may take considerably longer, until the court backlog has been cleared. After judgment of eviction is obtained, a sheriff is required to enforce the judgment and evict the tenant. The sheriff’s eviction may be complicated by the tenant’s inventory or machinery located at the premises. In such cases, the landlord may need to arrange for a contractor to remove the tenant’s property under guidance of the sheriff. The timing of this process varies but, from notice to judgment, the process should be expected to take no less than three months. Even if obtaining a judgment of possession is not problematic, it could be a hurdle to having a sheriff remove the tenant, especially if the tenant has an inventory or machinery.
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