On July 14, 2020, the Supreme Court of New Jersey issued an order authorizing several steps to support the resumption of landlord/tenant cases during the COVID-19 crisis. As discussed in another blog of mine, although there were limited circumstances to evict a commercial tenant, it was a difficult and timely process and, in most circumstances, the proofs needed to proceed were not present.

On February 5^th, the Supreme Court entered an order clarifying and expanding the circumstances in which a landlord may apply by Order to Show Cause to seek an eviction hearing. As discussed below, there is now a greater opportunity for landlords to proceed with commercial evictions in the wake of the entry of the order.

February 5^th Order Relaxes Rules for Commercial Evictions

The Notice to the Bar, which accompanied the order, provides that a trial may be scheduled if a commercial landlord files an Order to Show Cause alleging emergent circumstances, either (a) involving something other than nonpayment of rent or (b) based on nonpayment of rent that threatens the landlord’s capacity to continue their business (in the case of a pending foreclosure or tax lien). Next, the court will evaluate the application and determine whether emergent circumstances exist and a hearing should be held. Finally, if the court finds that emergent circumstances do in fact exist, the commercial tenant will be notified and a trial will be scheduled. If the landlord prevails at trial, judgment will be entered and a warrant of removal can be issued. Once the warrant is issued, the landlord can schedule a lockout with the county Sheriff.

Impact of the Order

The key difference between the July 14^th and February 5^th orders is that non-payment of rent that threatens the landlord’s ability to continue its business is now considered grounds to file an Order to Show Cause and requests the scheduling of a trial. Prior to the February 5^th order, the court could not consider the landlord’s financial condition and distress caused by a nonpaying tenant.

With the state’s backlog of eviction cases piling up, county courts now have leeway in determining what “threatens a landlord’s capacity to conduct their business.” It seems clear that a pending foreclosure or imposition of a tax lien caused, in full or in part, by a non-paying tenant would fall within the purview of the order and provide grounds to schedule a trial.

However, it is an open question as to the quantum of proofs that a court will need to rely on when a landlord is not being threatened by a tax lien or foreclosure action. The language of the order empowers the courts with a great amount of flexibility and discretion, when faced with a request to move forward with a commercial eviction trial. This should help landlords who have been struggling for months with nonpaying commercial tenants.

Of course, there are still no restrictions against commercial landlords filing and prosecuting lawsuits for monetary relief against commercial tenants and guarantors. That is considered another option available to landlords in order to enforce their rights during the pandemic.