The following is a copy of the article that was in today's NJ Star Ledger. After reading this, the only thing I can think of that a NJ lender can do after foreclosure is to continue to honor the lease and maintain the property as a rental while attempting to sell it. Once the property is sold then NJ law allows the lender or new owner to refuse to renew the lease because the owner wants to occupy the property. Thoughts?


It's illegal to evict tenants because of foreclosure
State officials warning landlords, Realtors and lawyers such action could bring charges
Wednesday, December 24, 2008
BY JEFFERY C. MAYS
Star-Ledger Staff

The letter to James Aiken arrived out of the blue.

It said he would have to leave the Englewood apartment in which he had lived for the past 11 years with his wife and children because the property was being foreclosed on and the landlord was shutting off the heat, water and electricity.

Aiken said officials in the Bergen County town told him and other tenants that without vital services, the building would be uninhabitable. The town relocated the Aikens to a hotel for a week and now they are living with relatives.

But according to New Jersey's Anti-Eviction Act, Aiken should not have been forced out of the building simply because it was in foreclosure. Tenants can only be evicted for things like non-payment of rent or destruction of property, the law states.

As foreclosures continue to rise across New Jersey, Public Advocate Ronald K. Chen and Banking and Insurance Commissioner Steven M. Goldman said yesterday landlords and others who force tenants out without a legal eviction order face both civil and criminal charges. Likewise, they said, lawyers and real estate agents who try to force tenants out could lose their licenses and face fines.

"We have had reports that tenants are being informed by real estate agents, attorneys, and others acting on behalf of a lender that they must move because their building has been foreclosed upon," Chen said. "We have already reached out to several of these organizations and individuals to put them on notice that their actions are illegal."

Of the 50,000 foreclosures anticipated in New Jersey this year, between 20,000 to 23,000 tenants are affected, said Matt Shapiro, executive director of the New Jersey Tenants Organization.

Chen and Goldman are fighting back by targeting letters from landlords, real estate firms and lawyers telling tenants they must vacate their apartments because of a foreclosure or offering "cash for keys." Chen's office has already sent warning letters to Keystone Asset Management, a Pennsylvania firm, Burgdorff ERA Realtors in Parsippany and Weichert Realtors in Secaucus.

A letter from Keystone Asset Management tells tenants of one foreclosed New Jersey building that "if you do not vacate the property with all of your possessions legal action will be taken."

A letter from Burgdorff ERA Realtors tells tenants that locks will be changed on a Jersey City property in 48 hours and offers "financial assistance" for those who want to leave. A letter from Weichert Realtors' Secaucus office says an eviction proceeding has been initiated against the occupants of a Jersey City building and offers to "negotiate a cash settlement with you in exchange for your written agreement to immediately vacate this property."

"I cannot state this strongly enough: If foreclosure is the sole reason that a tenant is being told to leave her home, it is not a legal activity in New Jersey," Chen said.

Steve Alessandrini, a spokesman for Weichert Realtors, said the firm is reviewing the matter. Keystone Asset Management did not return calls for comment. Dan Peoples, a spokesperson for Burgdorff ERA Realtors, denied the letter from his firm was an eviction notice, citing a sentence -- written in extremely small type -- at the bottom of the letter stating such.

Chen's office dismissed those arguments as excuses and said the letters were illegal.

Even though they are protected under the law, tenants often do not know their rights and police and municipalities do not know their responsibilities, Shapiro said.

In Aiken's case, for example, Englewood should have helped him and other tenants remain in the building.

Englewood officials did not respond to requests for comment.

Chen said the Attorney General's office is developing a training guide for local police and is working with the state Board of Public Utilities to help tenants when landlords discontinue heat and electricity.

Urban areas like Newark, Paterson and Jersey City and minorities -- who make up the bulk of the rental population -- are disproportionately affected by foreclosure-related evictions, said Donald A. Baldyga, Jr. director of real estate development for Episcopal Community Development Inc. in Newark. The empty homes often lead to broader neighborhood problems.

"They don't understand that the buildings will be empty and people will come and steal the copper and the plumbing," he said. "The key is that tenants should reach out for help."

Aiken is glad he did.

"I'm responsible for my family so I want a place of our own. We just need a little help," he said.

Yep what the landlord did was illegal because they are not allowed to shut off utility services. The utility company can for non payment but the landlord is not allowed to. I hope they take him to court.

It's not only shutting off the utilities. In NJ the landlord is allowed to evict only for one of 16 specific reasons. Foreclosure is not one of those reasons.

Lisa,
Thanks for sharing this. But the article seems to focus on commercial property. All the buildings mentioned appear to be multi-unit buildings.

What about people renting a single family home? In that case, its my understanding that the lease ends with foreclosure (unlike with commercial property). Does NJ's Anti-Eviction law address those?

NJ's Anti-Eviction law applies to all residential tenancies except owner-occupied 2 or 3 family dwellings. So yes, it would also apply to a single family home.