A New Law Awards Attorney Fees to New Jersey Residential Tenants

In an effort to ensure parity between landlords and tenants in New Jersey, a significant law has been enacted that levels the playing field in lease disputes. The law requires that when a residential lease gives a landlord the right to recover attorney's fees and expenses from a tenant, a parallel, implied right is automatically granted to the tenant as well. This changes the dynamic of many landlord-tenant disputes.

If your lease allows your landlord to seek legal fees from you, this new law may give you the same power. Here’s what you need to know.

Key Provisions of the Tenant Fee Law

The law, which took effect on January 21, 2014, and applies to all residential leases signed on or after February 1, 2014, has several important conditions:

1. The Award is Discretionary and Requires Success

A judge can award legal fees or expenses (or both) to a tenant who is successful in a court action. Expenses are defined as court costs and witness expenses, but do not include travel, lost income, or child care costs.

2. No Fees if There is No Meritorious Defense

The reciprocal fee provision is designed for genuine disputes. A tenant who is sued for unpaid rent and simply pays the amount due before a judgment is entered, without asserting a valid, meritorious defense, cannot benefit from this law.

New Lease Notification Requirements

To ensure tenants are aware of this right, the law mandates that all new residential leases going forward must include a specific notification if they contain a clause for landlord fees. The lease must contain the following notice in boldface type that is at least 11-point font and one size larger than the surrounding text:

“If the tenant is successful in any action or summary proceeding arising out of this lease, the tenant shall recover attorney’s fees or expenses or both from the landlord to the same extent the landlord is entitled to recover attorney’s fees or expenses, or both as provided in this lease.”

This law represents a crucial shift in tenants' rights in New Jersey. Both landlords and tenants should carefully review their lease agreements to understand their rights and obligations regarding legal fees. An experienced attorney can provide clarity on how this law applies to your specific situation.