Senate Approves Compromise on Tenant Recovery of Attorney's Fees; NJAA-Secured Key Amendments

On January 9th the State Senate voted 27-11 to approve Assembly changes to S-2018, and send the bill on to the Governor’s desk for finalconsideration. The bill would allow residential tenants to seek attorney’s fees when they prevail in a legal action against the owner.

The bill, sponsored by Asm. Craig Coughlin (D-Middlesex) and Senator Brian Stack (D-Hudson), would allow residential tenants to seek attorney’s fees when they prevail in a legal action against the owner. Assembly amendments made on Dec 19 contained an NJAA-authorized compromise to allow the Courts appropriate discretion over determining awards of attorney's fees to tenants.  Under current law, each party to an action pays her own attorney's fees; however, contractual lease agreements or statutory laws can shift those fees in certain circumstances. Most residential lease agreements require tenants to pay attorney’s fees when the owner prevails in order to safeguard the community against incurring unnecessary legal costs. S-2018 would allow tenants to seek recovery of attorney's fees and expenses when they prevail in court and where a lease agreement provides owners the right to seek such fees.

NJAA worked closely with bill sponsors and secured a number of amendments throughout the legislative process, including (1) clarification that a tenant will not be deemed to have prevailed by satisfying a past due balance prior to entry of a judgment for possession; (2) adding definition as to what expenses a tenant may recover; (3) clarification that tenant’s right to recovery is to the same extent as a landlord's ability to recover such fees should the landlord had prevailed. Most recent amendments reinsert a provision providing the courts with discretion and modify a required lease notice provision to better fit with the lease document.

S-2018, as amended, passed the Senate 27-11 after passing the General Assembly 71-9 with wide bi-partisan support on Dec 19, 2013. The amended bill preserves language negotiated by the NJAA that ensures the judiciary retains discretion over such awards. Click here for a copy. S-2018 now moves to the Governor’s desk for final consideration.