An occasional review of fascinating matters in New Jersey law – by Justin Marcus Smith

“I’m not fixing that!”

Sunday 29 May 2016 - Filed under Contracts + Insurance + Landlord / Tenant - Common areas liability + Leases

A recent unpublished (therefore, non-precedential) Appellate Division decision, Herz v. 141 Bloomfield Ave. Corp. (App. Div. 2015), illustrates a typical flashpoint between landlord and tenant, especially commercial landlords and tenants: Who is responsible for what kind of maintenance to the property?

The tenant sued the landlord for “lost profits,” alleging that the landlord had permitted three discrete maintenance problems to harm the tenant’s restaurant business. The alleged problems included: burst pipes for landlord’s failure to maintain the furnace; water shut-off for landlord’s failure to pay the water bill; and municipal shut-down of the restaurant for a discharge of a poorly maintained septic tank.

Maintenance and repair of the roof membrane is especially likely to lead to litigation if the roof leaks into the tenant’s business. The lease should make the landlord and tenant’s respective responsibilities as clear and definite as possible.

As in this case, HVAC (heating, ventilation, and air conditioning) issues are another flashpoint. If your tenant is responsible for heat, have you briefed your tenant that turning the heat off can result in burst water pipes? Some confused tenants, especially those accustomed to warm climates, intentionally turn the heat off as “money-saving” measure. Situations where the tenant has caused thousands of dollars of property damage are usually difficult to resolve. The tenant may not have enough money to compensate the landlord, in which case, a good insurance policy will be the landlord’s only recourse.

2016-05-29  »  admin