Settlement Conferences Mandatory in New Jersey Landlord-Tenant Cases

Settlement conferences will be mandatory in landlord-tenant cases under a New Jersey Supreme Court Order issued on July 2, 2021…

Settlement conferences will be mandatory in landlord-tenant cases under a New Jersey Supreme Court Order issued on July 2, 2021 (Order). The requirement comes as the New Jersey Court system is expecting an influx of evictions complaints to exacerbate an existing backlog of pending cases.

NJ Courts Dealing With Backlog of Landlord-Tenant Cases

New Jersey Supreme Court Chief Justice Stuart Rabner addressed the backlog of landlord-tenant cases in recent remarks before the New Jersey Association of Justice. “There are more than 55,000 pending landlord-tenant cases, more than four times the level before the pandemic,” Rabner said. “And more than 13,000 of those cases have been pending for more than one year.” He added: “When the governor’s moratorium on evictions is lifted, we expect an additional nearly 200,000 eviction complaints will be filed. That impending crisis will likewise command the court system’s attention.”

In response to the COVID-19 public health emergency, the New Jersey Supreme Court authorized the temporary suspension of landlord-tenant trials on March 16, 2020. The moratorium continued throughout the pandemic, subject to narrow exceptions as set forth in the court’s July 14, 2020 and February 5, 2021 orders. On June 2, 2021, the New Jersey Supreme Court authorized the resumption of commercial landlord-tenant trials.

Separate from the Court’s action, Executive Order 106 (issued March 19, 2020) suspended residential evictions for two months after the conclusion of the COVID-19 public health emergency or state of emergency, subject to narrow exceptions “in the interest of justice.” The moratorium on residential evictions is still in place. Pursuant to Executive Order 244, which was issued June 4, 2021, the state of the emergency continues, and the provisions of EO 106 may continue through December 31, 2021.

NJ Supreme Court Order Requiring Settlement Conferences

While voluntary settlement conferences have been conducted since July 2020, the New Jersey Supreme Court’s July 2, 2021 Order notes that participation has been limited. As a result, almost 14,000 landlord tenant cases have been pending for more than one year. Tens of thousands of additional cases also involve prolonged periods of nonpayment of rent.

Accordingly, the New Jersey Supreme Court’s Order states: “It is ordered that effective immediately and until further order: Courts statewide will schedule mandatory settlement conferences in landlord tenant cases.”

The settlement conferences will be held primarily in a remote format, and courts will provide on-site technology resources to participants who need them. Judges will have the discretion to schedule mandatory in-person conferences based on the individual circumstances of a case. Court staff will have information available for the parties regarding rental assistance programs in each county.

Parties will be required to appear at the mandatory settlement conference. In accordance with the Order, the landlord must submit the lease and registration statement (if applicable) five days before the settlement conference. The Order further provides:

• Courts will provide notice of the consequences for failure to appear at the mandatory settlement conference.
• If the landlord does not appear, the case will be dismissed.
• If the tenant does not appear, default will be entered by the clerk.  If the landlord is prepared to proceed, the court will hold a proof hearing. If the landlord is not prepared, a proof hearing will be held within 10 days of the mandatory settlement conference date. If the landlord establishes entitlement to relief, the court will enter default judgment. Pursuant to the Governor’s Executive Order 106 as continued via statute, an eviction after default judgment cannot proceed until the end of the moratorium on residential evictions.
• If both parties appear, the settlor will assist the parties in working out an agreement, which will be reduced to writing, placed on the record, and distributed to the parties. If no settlement is reached, the matter will be scheduled for trial. Those trials will begin September 1, 2021.
• The Judiciary will continue to collaborate with the Department of Community Affairs regarding available rental assistance programs.

According to a press statement issued by the New Jersey Courts, conferences are expected to begin sometime in July. Priority will go to the oldest pending cases with the most unpaid rent and any newly filed cases where more than 12 months’ rent is owed.

Key Takeaway

New Jersey continues to take steps to address the influx of landlord-tenant cases, with mandatory settlement conferences becoming the latest (but likely not the last) initiative. We encourage lenders and landlords to stay up to date on legal developments at both the state and local level. We also advise working with experienced counsel to determine what legal strategies may be available to move matters through the legal process more quickly.

If you have questions, please contact us

If you have any questions or if you would like to discuss the matter further, please contact Matt Kane, Christopher Dzwilewski, or the Scarinci Hollenbeck attorney with whom you work, at 201-896-4100.