What Is A Eviction Hold Off Agreement?
An eviction hold off agreement is defined as an "agreement between the tenant and landlord to defer the eviction" or postpone a lockout attempt initiated against a tenant. While it may sound similar to an eviction agreement, an eviction hold off agreement differs from a typical agreement to vacate in that it does not address the terms of a tenant’s departure from a rental unit or provide a permanent solution. Eviction hold off agreements serve as temporary reprieves for tenants facing eviction . In fact, even if the eviction hold off agreement is not ultimately honored, the landlord is still obligated to provide the tenant with three days’ notice before attempting to lock them out of the rental unit. In other words, an eviction hold off agreement temporarily "freezes" the eviction process, but preserves the notice and lockout requirements put in place by the Provincial and/or Municipal Policy Statements.
Legal Basics of Eviction Hold Off Agreements
The legal framework for eviction hold off agreements is informed by eviction laws, landlord-tenant statutes, and the courts’ interpretation of these laws. Key governing laws include the Residential Construction and Property Improvement Act (RCPIA), the New Jersey Anti-Eviction Act ("Anti-Eviction Act"), and local Rules of Court.
In addition to the RCPIA, the landlord-tenant statutory scheme in New Jersey is provided primarily by N.J.S.A. 30:4C-1, et. seq. and N.J.S.A. 2A:18-53, et. seq., the Anti-Eviction Act. The Anti-Eviction Act was originally enacted to protect residential tenants from unlawful removal from premises. In particular, the statute was enacted to protect tenants who (1) were part of a reduced-income housing project financed pursuant to federal statutes; (2) were elderly or handicapped; (3) had been residing in the same unit for more than five years and (4) had been residing in the same unit since 1977. The Anti-Eviction Act is now broadly applicable to commercial properties and agricultural land as well. N.J.S.A. 2A:18-61.1.
New Jersey’s eminent domain statute also provides tenants in condemned properties with certain rights. Under the statute, a tenant that has resided on the property for at least one year prior to the filing of a condemnation action may be awarded both reasonable relocation assistance and compensation for moving expenses. The type of compensation available is based on the type of tenancy, the length of the lease, and the length of residency. The statute also requires landlords to compensate a tenant that has resided in the "same dwelling" for six months or more if the condemnation action does not have final judgment and non-appealable confirmation within two years. N.J.S.A. 20:3-26. The statute further requires the condemning authority to determine whether any displaced tenants are eligible for benefits under regulations promulgated pursuant to the statute. Each tenant shall be notified at least 30 days prior to the vesting of title in the acquisition and/or demolition of the property and shall be provided copies of such regulations. N.J.S.A. 20:3-23.
As eviction hold off agreements can impact the substantive rights of the landlord and tenant, the Rules of Court contain important rules regarding their enforcement. Specifically, the rules require a default of a minimum of 5 days for residential tenants and 14 days for commercial tenants to cure default and avoid eviction. See R. 6:3-4(b). Courts have the discretion to enforce or void eviction hold off agreements. However, this discretion is limited to the property at issue and does not extend to any subsequent properties.
Advantages of Eviction Hold Off Agreements
The negotiation process of an eviction hold off agreement typically results in a settlement that is quicker and more satisfactory to both the tenant and the landlord than any other type of eviction agreement. A core aspect of this strength of an eviction hold off agreement is its ability to prevent third party eviction through the rent payment deposit system, discussed above.
Further, eviction hold off agreements are flexible in their formulation. Although negotiations for these types of agreements often involve a great deal of back and forth, tenants and landlords generally want similar outcomes in terms of returning the rents to normal over a set period of time. With the provisions of an eviction hold off agreement, the parties usually seek to have the rents returned to normal over the course of several months, with no future default more than two months old. An eviction hold off agreement can also address the matter of whether late fees will be assessed.
A common provision of an eviction hold off agreement requires that all repairs that are needed be made, along with describing those needed repairs in specific terms. Although this may seem like a simple provision, it can be critical because most lease agreements specifically require that the tenants must report problems to the landlord. If the tenant fails to do so, it is possible that the landlord will use the failure to so report as a basis for a claim of damages and possibly even early termination of the lease.
Eviction hold off agreements offer many other potential advantages for both landlords and tenants, which will now be discussed.
How to Draft a Eviction Hold Off Agreement
Negotiating an Eviction Hold Off Agreement is ideally a process of discussion in which both a tenant and a landlord can agree to terms of a lease or a lease extension which will last long enough for the tenant to come into compliance with the lease and for avoid another eviction. However, tenants sometimes believe that if they agree to the terms of the agreement without full understanding, they can later correct these misunderstanding which will save them from the eviction in the future. This is a tremendous misunderstanding that will cost the tenant a lot of money. Therefore, it is vital that tenants understand all aspects of the agreement.
The agreement should at least include the following terms: duration of the lease, the monthly rent, any amounts which need to be paid up front, and the procedure if the tenant wants to extend this agreement. Many landlords also believe that a hold off agreement will be binding upon the landlord. This is not true. Hold off agreements are non-binding in North Carolina. As such, many landlords believe that a judge will not enforce the agreement even if the tenant breaks the terms of the agreement.
It is also vital for the tenant to not give up rights under the existing lease to which the hold off is pursuant. Many tenants think that the hold off agreement takes the place of the old lease and its terms, but that may not be true. As such, it is sometimes better for a tenant to ask for an amendment to the lease which includes the same eviction terms as in the hold off. It is also important that the tenant have documentation of the full agreement in writing and signed by both parties as well as documentation of the payment history. This will make it easier to enforce the agreement especially since evidence must be provided to the judge in an action of summary ejectment. Finally, tenants should never put cash in the drop box if they pay by cash nor should they provide cash to the office manager.
Common Provisions in Eviction Hold Off Agreements
As a general rule, either side to any written agreement can draft the document. The party who chooses to draft the document will typically insert clauses that will most benefit them. With this said, there are frequent themes that every hold off agreement must contain if it is to be taken seriously.
The Typical Eviction Hold Off Agreement
Basic Scheduling. A statement by the Defendant that they should vacate the premises on a specific day and that they will leave the home or "subject premises" in basically the same condition that it was received.
Rent Payments. A listing of the rent payments that the tenant has not paid, and their subsequent additions (i.e., rent from previous months, rent for the current month, possible rent for the next month, and late fees).
Conditions. A stating of what the Defendant has specifically breached in their lease – as well as what conditions they must follow in order to bring their lease into compliance (i.e., if the tenants have a dog, they agree not to keep a dog in the premises again).
Extensions/Renewals. A clause that provides for both extensions and renewals of the agreement. This clause will be necessary if you need an extension for extra time , or if your attorney and the Defendant request an extension for the purpose of obtaining new information – the Directory Judgment will always specify that the lease has ended at the expiration of its term unless a renewal is requested (or agreed upon) by both parties.
Filing a Judgment. A statement that the Plaintiff agrees to file a Judgment solely if the Defendant fails to perform in adherence to the agreement. It will also provide for specific procedures (i.e., providing 48 hours notice) before the Plaintiff can file their Judgment.
Future Defaults. A clause that adds the requirement of a new cause of action to all future defaults by the Defendant. Thus, if the Defendant fails to comply with the agreement, it cannot be said that their eviction turned into a "de facto eviction" scenario where a Judgment is entered – as they had waived all defenses by signing the "without prejudice" clause.
Waiver of Future Defenses A statement that provides for an agreement on the part of the Plaintiff that they will only proceed to judgment on the specific breaches that they have listed, and not ones that arise in the future.
Frequently, any disputes that arise between Apartment Supervisors and their tenants regarding tenancies and evictions will be confused and ill-defined. A clearly written and detailed Eviction Hold Off Agreement and Schedule is essential for everyone’s understanding — and solely understanding it will give you the vantage point you need.
How To Put A Eviction Hold Off Agreement Into Effect
Once an eviction hold off agreement is reached with the tenant, it is essential that both the landlord and tenant understand the necessary steps in order to successfully implement the agreement. These steps include:
- The landlord should draft the resolution and include the terms of the agreement in writing for both parties to sign.
- The terms of the agreement should be in clear, concise language. Any legal lease provisions that are relevant to the dispute should be referenced.
- The terms of the agreement should include the payments the tenant is required to make, the frequency of payments, when the payments are due, the specific date the tenant will vacate the property, and the organization that will be responsible for vacating the tenant.
- It is always best practice to have a designated escrowee to hold the payments. However, if no third party can be agreed upon, the landlord is well-advised to require certified checks or money orders for payment of monthly rent, and hold the funds in a secure location.
- If a tenant fails to comply with the terms of the agreement, does not vacate the property by the specified date, or refuses to move forward and pay any additional agreed upon amount, the landlord must take the tenant back to Court to seek enforcement of the agreement.
- Before the landlord returns to Court, all statutory notices must be served on the tenant to obtain a new Court date to seek possession of the rental unit. It is important to serve proper notice on the tenant in case the Court grants possession. Failure to serve the appropriate notices could result in a delay of the return of possession.
- Another eviction hearing will be scheduled, unless waived by the tenant, to enforce the agreement and obtain an order for possession. If the Court finds in favor of the landlord, the tenant will be ordered to remove themselves from the property.
- If the tenant refuses to leave after the Court order, the landlord will be instructed to contact the County Sheriff’s Office and schedule an execution of possession.
The eviction hold off agreement is a tool that can be used by landlords to settle their eviction cases. However, it is important that both landlord and tenant are aware of the steps they need to take, should they be required to enforce the agreement at a later date.
Potential Roadblocks to Eviction Hold Off Agreements
One of the challenges with Eviction Hold Off Agreements is that a tenant may not pay rent during the term of the agreement, which could result in a new default if the agreement is not carefully drafted. In fact, a tenant may not have the ability to pay if they are unable to work. A solution to this problem is to require that a rental account be kept by the landlord’s bookkeeper. This account would show an exact record of rental payments. Any new arrears should not accrue until the tenant has exhausted the credit resulting from the rental account. This protects the landlord against new arrears accruing prior to the tenant’s reinstatement. Perhaps a more common solution would be for the landlord to agree to a new repayment plan for unpaid rent as part of the Eviction Hold Off Agreement. This approach is appropriate where there are only a few months of rent arrears and the tenant is almost able to catch up. The repayment plan could be for the short term, but it would be a separate plan from the Eviction Hold Off Agreement and would allow for subsequent defaults occurring under the payment plan if the tenant could not honour the amounts due. If there are more significant rent arrears, it is probably best not to identify the arrears in the Eviction Hold Off Agreement. For example, the agreement could simply say that the tenant is current with rent but there is an outstanding arrear from prior months with a distinct agreement for repayment of those arrears.
When A Eviction Hold Off Agreement Does Not Work
There are some cases where an eviction hold off agreement is not in the best interests of the tenant. This could be due to the ability of the landlord to prove the basis for the eviction in a court or if the prior judgment was already paid. With the good faith defenses discussed below , it may be that the court will simply refuse to allow the landlord to evict when the tenant has paid off the prior judgments.
Another situation when an eviction hold off agreement may not be ideal is if the landlord has no intention on following through with enforcing the hold off agreement. An example of this scenario could occur when a hold off agreement exists and the tenant attempts to pay the resulting rental payment after the deadline but does not get a receipt. If the tenant believed that he had the right to pay the back rent and the landlord refused to accept the payment, the tenant would have a valid claim against the landlord for breach of contract. The costs to defend against this claim would likely exceed the cost of the judgment and so many landlords will refuse to let the tenant back into possession if the deadline is missed.