Be Sure to Include all Claims in Landlord-Tenant Settlement Negotiations

Parties often negotiate settlements of landlord-tenant disputes, Be sure to include all claims in your settlement negotiations or you may be prevented from bringing those claims in a subsequent legal action.

In the matter of RAJI v. SAUCEDO, a New Jersey Appellate Court held that claims made by the tenant in a lawsuit for money damages against the former landlord should have been included in the original landlord-tenant action consent judgment.

The doctrine of accord and satisfaction is a “mutual exchange of interest that fully discharges all claims, replacing them with the judgment’s express terms”. The Court held that when the parties entered into a consent judgment in landlord-tenant court, the tenant should have included its claim for reimbursement for improvements made to the rented premises as a set-off against the landlord’s claim for unpaid rent. The tenant’s later civil action for damages for the cost of the improvements was therefore barred because the tenant could have raised it in the landlord-tenant action, but did not.