Tenants are protected when buildings are converted

Tenants can face eviction if their building or apartment is being converted into a condominium or cooperative. The Anti-Eviction Act protects all tenants from eviction due to condominium conversion for at least three years, and possibly for several more years. In Hudson County, the law also protects senior citizens and their spouses, handicapped tenants and their families, and lower-income residents against conversion-related eviction. This section gives a brief description of these legal protections.

Conversions are complicated: Get help!

The legal process to convert a rental building to a condominium or a cooperative is complicated, as are the laws protecting tenants. If you learn that your building is undergoing conversion, or will be converted in the future, it is important that you seek legal advice from a lawyer who knows about these laws. Your regional Legal Services office can help if you are eligible.

Basic steps in conversion

Landlords must follow certain steps to convert rental housing to condominiums or cooperatives. Landlords must follow four different laws:

• The Planned Real Estate Development Full Disclosure Act. Cite: N.J.S.A. 45:22A-21.
• The Senior Citizen and Disabled Protected Tenancy Act. Cite: N.J.S.A. 2A:18-61.22.
• The Anti-Eviction Act. Cite: N.J.S.A. 2A:18-61.1(k) and 2A:18-61.8.
• The Tenant Protection Act of 1992. Cite: N.J.S.A. 2A:18-61.40.

An owner who plans to convert a building or a mobile home park must first give each tenant two separate documents: (1) a notice of intent to convert and (2) a full plan of conversion. The notice of intent to convert and the conversion plan must be sent by certified mail. In addition, the owner must give tenants a three-year notice to quit or vacate the rental unit because of the conversion. The notice of intent to convert and the conversion plan documents must be given to all affected tenants at least 60 days before giving the tenants the three-year notice to quit.

The laws concerning conversion must be strictly followed by the owner. If the owner does not provide all of the information required in the proper form and in the proper way, the owner may not be able to evict the tenant at the end of the three-year notice period. Cite: Riotto v. Van Houten, 235 App. Div. 177 (App. Div. 1989); Sibig and Co. v. Santos, 244 App. Div. 366 (App. Div. 1990).

The notice of intent to convert. The notice of intent to convert must contain three separate items:

• A notice to the tenants of their right to buy ownership in the property at a set price.
• A notice that each tenant has an exclusive right to buy his or her apartment in the first 90 days after receiving the notice of intent to convert. The notice must also state that, during the 90 days, the apartment cannot be shown to anyone else unless the tenant has given up his or her right to buy in writing.
• A copy of the regulations on conversions approved by the New Jersey Department of Community Affairs. These regulations explain the tenant’s rights under the Anti-Eviction Act.

The full plan of conversion. The full plan of conversion must contain a great deal of very specific information. For example, the plan must contain a legal description of the property, the price of the apartment, terms of sale, and a copy of the deed to the apartment, if purchased. The plan is defective if it does not contain all of the required information. The requirements for a conversion plan are very complicated, and you should have a skilled attorney review them for you.

Three-year notice to vacate or quit. After giving tenants the notice of intent to convert and the plan for conversion, the owner must then give tenants who choose not to buy ownership in a condo or co-op a three-year notice to vacate or quit the rental unit. The owner cannot file a court action to evict the tenant because of the conversion until the end of the three-year notice period. This means that tenants have a minimum of three years before their landlord can take them to court to ask that they be evicted because of the conversion. In addition, any time left on a written lease must also end before an eviction case can be started, even after the end of the three-year notice period.

The notice to quit must state the reason for ending the tenancy and must be served personally by giving a copy directly to the tenant or by leaving a copy at the tenant’s home with a family member over the age of 14. It can also be served by certified and regular mail. If the regular mail is not returned, the tenant is presumed to have been served.

The right to ask for comparable housing. Tenants who have received the notice to quit can ask the landlord in writing for a reasonable opportunity to look at and rent comparable housing. This right to ask for comparable housing extends for 18 months after receipt of the notice to quit. Comparable housing means housing that meets all local and state housing codes and is equivalent to the apartment in which the tenant then lives in size, number of rooms, major facilities, rent, and in other ways. The requirements on the owner to offer reasonable opportunities for comparable housing are detailed, and tenants should consult with a knowledgeable attorney for further advice.

Rent increases during the three-year notice period. Tenants are given some protection against unfair rent increases during the three-year notice period and for the entire time they remain in the apartment, including during any hardship stays of eviction (postponements). Tenants continue to be covered by rent control if rent control applies to the building. Also, an owner who asks the rent control board for a hardship increase cannot use any increases in costs resulting from the conversion to justify his or her claim of hardship. Cite: N.J.S.A. 2A:18-61.31.

Tenants in towns without rent control can receive only reasonable rent increases. The owner cannot use any increases in costs resulting from the conversion to justify a rent increase. For example, an owner may not raise rents because his taxes have risen because of the conversion. Cite: N.J.S.A. 2A:18-61.31. In this situation, tenants should seek legal advice.

Further delays in evictions. Tenants should also seek legal advice when faced with a court action for eviction after the three-year notice period. There are complicated rules on the circumstances under which the judge can grant further stays or postponements of eviction. The general rules are that the owner must show that a tenant who requested comparable housing within the first 18 months was actually offered comparable housing. If the tenant requested comparable housing and it was not offered, the court must grant a one-year stay (postponement). After at least a one-year stay, the court cannot give any more stays if the owner provides the tenant with hardship relocation compensation. Hardship relocation compensation is a waiver of five months’ rent. A tenant who receives this compensation can live rent free for five months. However, the court will automatically renew the one-year stay if the owner does not provide this relocation compensation and fails again to give the tenant a reasonable chance to find similar housing. The court can give up to five one-year stays as long as the landlord does not give the tenant an offer of comparable housing or hardship relocation compensation. Cite: N.J.S.A. 2A:18-61.11.

Additional requirements. There are several additional legal requirements that must be met by owners. First, the owner must give any tenant whose tenancy began before the conversion, and who is evicted because of the conversion, a waiver of one month’s rent for the cost of moving. Cite: N.J.S.A. 2A:18-61.10. Second, any tenant who moves in after the owner has officially filed to convert to condo or co-op must be given notice that the building is being converted. The tenant also has to be warned that he or she can be evicted after 60 days’ notice if the unit is sold to a new owner who wants to personally move in. Cite: N.J.S.A. 18-61.9. Third, the owner or buyer of a condominium unit can be liable to a tenant in a civil action for three times the amount of damages plus attorney’s fees and court costs for misleading the tenant in any way about the conversion. Cite: N.J.S.A. 2A:18-61.9.

Special protections for senior citizens and the disabled

The law protects from eviction for up to 40 years qualified senior citizens and dis- abled people who live in buildings being converted to condominiums or cooperatives. During this protected period, these tenants must continue to pay rent and follow reasonable rules and regulations, or they can be evicted for some other reason, such as nonpayment of rent. Cite: N.J.S.A. 2A:18-61.22.

Qualifications for protection

Senior citizens qualify for protection from eviction if they (1) have an income not higher than three times the per capita (average) income in the county they live in or $50,000, whichever is greater; (2) have lived in the building for one year or have a lease with longer than a one-year term; (3) are over 62 years old; and (4) live in a building containing at least five rental apartments. Disabled people qualify if they are unable to work because of a physical or mental impairment, or they are veterans who have a service-connected disability of 60 percent or more. Disabled people must also meet the income standards and have lived in the building with at least ive rental units for one year, or have a lease with longer than a one-year term. Cite: N.J.S.A. 2A:18-61.24.

How to apply for protection

The city or town will send an application form for protected tenancy to every tenant in the building before a landlord converts a building. Seniors or disabled tenants who wish to apply must fill out the form and return it to the town within 60 days of receipt. The tenant must also sign a written statement, sworn before a notary public, giving his or her income and stating that he or she has either lived in the apartment for one year or has a long-term lease.

The city must decide in writing within 30 days after the application is filed if the tenant qualifies. A tenant who qualifies is eligible for protection if the landlord goes ahead with the conversion. Cite: N.J.S.A. 2A:18-61.28.

The application for protection should be sent to the city within 60 days of receiving it. Tenants can still apply for protection even weeks or months later, as long as the application is made before a court actually enters a judgment for eviction, or before the apartment is sold to a person who intends to live in it. Tenants who applied for and were not given protection because they did not qualify (because they were over income or for other reasons) can apply again. This can be done even a year or more later, as long as they reapply before a court judgment or before the apartment is sold. Cite: Ellin Corp. v. Tp. of North Bergen, 253 N.J. Super. 434 (App. Div. 1992).

Protections against rent increases

Qualified senior citizens and disabled tenants also receive protection from unreasonable rent increases. Rent control continues to apply to protected tenants if the building is covered by rent control, and an owner who asks the rent control board for a hardship increase is not allowed to use the additional cost of the conversion as a reason for a hardship rent increase. Where rent control does not apply, any rent increase must be reasonable. Also, the owner cannot use any increases in costs resulting from a conversion to justify a rent increase. Protected tenants facing rent increases should seek knowledgeable legal help. Cite: N.J.S.A. 2A:18-61.31.

Special Hudson County protections

The law provides additional protections for certain tenants living in Hudson County. Cite: N.J.S.A. 2A:18-61.40. Qualified Hudson County tenants are permanently protected from eviction due to the conversion of their building. Qualified tenants must continue to pay rent and follow reasonable lease rules. They can still be evicted if their landlords can prove in court one of the other legal causes for eviction.

Qualifications for protection

Hudson County tenants qualify for protection from eviction if their household income is below certain amounts that are established each year. These tenants must also have lived in their apartments for at least 12 months before they apply for protection. They must also apply for protection before the landlord gets permission from the state to convert.

Before an owner can convert, all tenants in the building must be notified in writing that they have a right to apply for special protection from eviction. The state will not allow the owner to convert unless the owner can show that all tenants have been notified of their right to apply for protection.

How to apply for protection

The city will send an application to every tenant in the building before a Hudson County owner converts a building. Tenants who wish to apply for protection must fill out the form and return it to the town within 60 days of receipt. Tenants may also have to sign a written statement, sworn before a notary public, giving their income and stating that they have lived in the apartment for 12 months.

The city must notify tenants who qualify in writing within 30 days after receiving the applications. Tenants who do not qualify for these special Hudson County protections still have the same rights as all other tenants in conversions, as discussed above. If the Hudson County municipality has a rent control ordinance, the application may be administered by the rent control office. Tenants who may be entitled to protection should reach out to both city hall, specifically the rent control office, to apply.

Other requirements

Hudson County tenants can lose their protection against eviction if their household income goes higher than the amounts allowed in the law. Tenants can also lose protection if they no longer reside in the apartment. In addition, the rent for protected Hudson County tenants continues under rent control if their building is covered by rent control. An owner who asks the rent control board for a hardship increase cannot use increases in costs from conversion as a reason for a hardship rent increase. If rent control does not apply, an owner can only receive reasonable rent increases that do not include any increases in costs resulting from conversion.

This information last reviewed: Mar 22, 2024