Commercial evictions in New Jersey are poised to increase under new orders issued by the New Jersey Supreme Court...
Commercial evictions in New Jersey are poised to increase under new orders issued by the New Jersey Supreme Court. While most eviction proceedings were placed on “pause” in light of COVID-19, commercial landlords and lenders may now proceed with certain landlord/tenant actions and post-judgment actions in commercial foreclosures.
Impact of COVID-19 on Commercial Real Estate Matters
In response to the ongoing COVID-19 public health emergency, the Supreme Court of New Jersey has authorized the temporary suspension of landlord/tenant trials, subject to a few narrow exceptions, since March 16, 2020. In July 2020, the New Jersey Supreme Court issued an order that allowed commercial or residential landlords to make an application for an eviction trial in certain emergency situations, including if a tenant was destroying the property or engaged in illegal activity. While commercial foreclosure trials have continued during the pandemic, the courts have withheld post-judgment action, including the issuance of writs of possession.
While these restrictions have provided welcome relief for commercial tenants, they have made it difficult for landlords to regain possession of commercial properties, even when tenant businesses are no longer operational. Lenders have also been left in limbo with regard to whether they may proceed with foreclosures.
Commercial Foreclosure Notice
In a Notice to the Bar, dated February 5, 2021, the New Jersey judiciary announced that, effective February 15, 2021, courts will resume post-trial activity, including issuance of writs of possession, for commercial foreclosure matters.
The announcement is likely unwelcome news for commercial property owners that are behind on mortgage payments. At the same time, it is a necessary step towards returning the legal system to its pre-pandemic operating status. By allowing actions to proceed through the legal process, it will also bring clarity for borrowers and lenders.
Commercial Landlord/Tenant Trials
In a second Notice to the Bar, dated February 5, 2021, the New Jersey Supreme Court clarified and expanded the circumstances in which a landlord may apply by Order to Show Cause for a trial in a commercial landlord/tenant matter.
Under the Order, a commercial landlord filing an Order to Show Cause must still allege emergent circumstances, and the basis of the landlord/tenant action generally can’t be nonpayment of rent. However, emergent circumstances can now exist where the tenant has vacated the property; the tenant’s business is not operating and will not resume operations; or the commercial landlord is facing foreclosure or a tax lien.
In such cases, the court will evaluate the application and determine whether emergent circumstances exist, and a hearing will be held. If the court finds that emergent circumstances exist, the commercial tenant will be notified, and a trial will be scheduled. After that trial, if the commercial landlord prevails, judgment will be entered, and a warrant of removal can be issued.
Key Takeaway
The Orders will not lead to a rash of commercial evictions overnight. However, the easing of restrictions does mean that parties to landlord/tenant and commercial foreclosure actions may need to shift their legal strategies.
As the COVID-19 pandemic continues to evolve and we slowly approach the “new normal,” additional orders are likely. We encourage lenders/borrowers and tenants/ landlords to stay up-to-date on legal developments at both the state and local level and contact experienced counsel to determine how you may be impacted.
If you have questions, please contact us
If you have any questions or if you would like to discuss the matter further, please contact me, Chris Dzwilewski, or the Scarinci Hollenbeck attorney with whom you work, at 201-896-4100.
How Understanding Bankruptcy Trends Can Benefit Your Business
The bankruptcy legal landscape presents both challenges and opportunities for businesses navigating financial distress. Understanding current bankruptcy trends can help businesses make more informed and strategic decisions. Corporate Bankruptcy Filings Trending Upwards Bankruptcy filings continued to trend upwards in 2024. According to statistics released by the Administrative Office of the U.S. Courts, personal and business […]
SEC Takes Actions Against Issuers for Failure to File Form D
In December, the U.S. Securities and Exchange Commission (SEC) announced charges against two privately held companies for failing to file a Form D notice, which is generally utilized for exempt securities offerings. Here, the SEC’s enforcement sends a strong message: compliance with regulatory requirements is not optional and failure to comply can have significant consequences. […]
Redefining Labor Relations: NLRB's Pivot from Abruzzo’s Memoranda
On February 14, 2025, the Office of General Counsel (OGC) of the National Labor Relations Board (NLRB) under Acting General Counsel William B. Cowen issued Memorandum 25-05, “New Process for More Efficient, Effective, Accessible and Transparent Case handling.” The Memorandum rescinds nearly all of the Memoranda issued by his direct predecessor, Jennifer Abruzzo, setting the […]
If you purchase real property from a foreign person or entity, you may be required to withhold taxes from your payment to the seller under the Foreign Investment in Real Property Tax Act (FIRPTA). The federal tax law is designed to ensure that foreign sellers pay any applicable capital gains tax on profits realized from […]
Does Your Homeowners Insurance Provide Adequate Coverage?
Your home is likely your greatest asset, which is why it is so important to adequately protect it. Homeowners insurance protects you from the financial costs of unforeseen losses, such as theft, fire, and natural disasters, by helping you rebuild and replace possessions that were lost While the definition of “adequate” coverage depends upon a […]
Understanding the Importance of a Non-Contingent Offer
Making a non-contingent offer can dramatically increase your chances of securing a real estate transaction, particularly in competitive markets like New York City. However, buyers should understand that waiving contingencies, including those related to financing, or appraisals, also comes with significant risks. Determining your best strategy requires careful analysis of the property, the market, and […]
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Sign up to get the latest from our attorneys!
Explore What Matters Most to You.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.
Let`s get in touch!
Sign up to get the latest from the Scarinci Hollenbeck, LLC attorneys!
