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A tenant in an illegal apartment may be entitled to relocation expenses if the landlord attempts to evict the tenant due to the illegal occupancy.

N.J.S.A 2A:18-61.1g(3) permits a landlord to evict a tenant where the landlord “seeks to correct an illegal occupancy because he has been cited by local or State housing inspectors or zoning officers and it is unfeasible to correct such illegal occupancy without removing the tenant.” This situation is most common where an owner of a home zoned as a one or two-family home rents out the basement or attic of the home to a tenant as a separate dwelling unit from the first and second-floor apartments. If a landlord attempts to evict a tenant because the landlord has been cited by local or State housing inspectors for renting out an illegal apartment, the landlord must file a complaint for possession of the illegal unit in the Superior Court landlord-tenant division in order to remove the tenant. The landlord cannot simply lock out the tenant himself without going to court. However, before evicting the tenant the landlord must pay the tenant the equivalent of six months’ rent as relocation expenses. This sum must be paid at least five days before a court-ordered lockout removing the tenant.

In addition, in the case of Miah v. Ahmed, 179 N.J. 511 (2004), the New Jersey Supreme Court held that the relocation reimbursement could not be offset by any amounts which the landlord alleges that the tenant owes in rent. Therefore, even if the landlord files the complaint for possession on the ground of an alleged non-payment of rent, rather than under N.J.S.A. 2A:18-61.1g(3), and the tenant thereafter discovers that the apartment is illegal under local zoning regulations, the tenant can still raise the defense of an illegal occupancy and, so long as the tenant can prove that the apartment is illegal, the tenant will still be entitled to relocation expenses before being locked out. As noted above, the relocation reimbursement cannot be offset by any amounts which the landlord alleges the tenant owes in rent. The landlord must sue the tenant, in a separate civil action, for any rent which the landlord claims is due from the tenant.

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