I bought this single-family home with tenant occupied in March 2006. The tenant had a 2-year lease effective Feb. 1, 2005 to Jan. 31, 2007. This lease was expired on Jan 31, 2007 midnight. I did not realize the lease had expired until recently. Neither the tenant had requested the renewal. Now I decided not to renew the lease with them. I casually mentioned to the tenant that the lease had expired already. She told me that it was automatically renewed for another 2-year, per NJ State Law. Is this true? I read the lease agreement, it didn't specify automatic renewal after the current lease term ends. What is the legal procedure to repossess the house since the house is now under "Holdover by Lessees"? Will I be able to put this house for rent immediately after the repossession? Or is there a grace period before Lessees it for rent? The existing rent collected from this house is $690 per month. According to the current Fair Market Value, the rental for this 2-Bedroom single-family home in Trenton, NJ is about $850+. If the tenants refuse to move out, do I have to renew the lease with them? If so, can I increase the rent to FMV, which is $850?


Thank you for your help and advises.

NJ law does not provide that a lease automatically renews. Instead it provides that a tenant becomes a month-to-month tenant when the lease term ends, at the same terms and conditions as the written lease.

You can increase the rent with 30 days advance written notice but it cannot be an "unreasonable" increase. I'm not sure if an increase of $160 per month would be considered unreasonable by a judge, but it might be.

Your choices are to terminate the tenancy by giving 30 days advance written notice and then leasing to a new tenant, or increasing this tenant's rent and hoping that a judge will not consider that increase unreasonable.

If the current tenant is a good tenant then you may want to reach an agreement with her for an increase in rent that isn't necessarily fair market value but is still an increase. Maybe half? And maybe enter into a one year lease with her rather than a two year lease so that you're able to increase the rent again in another year.

You ARE obligated to offer the tenant a renewal but you are allowed to require "reasonable changes" in the renewal. Those can include an increase in rent, assessment of late fees, rules and regulations, etc.

Check out New Jersey Landlord Tenant Security Deposits Evictions for more info on NJ landlord/tenant law. Also send away for the Truth in Renting booklet. You can find that info on that site.