Background
This case represents the second time the Appellate Division was called upon to scrutinize plaintiff 76 Berlin Road, LLC’s attempts to evict defendant Colleen Gormley from a residential property in Cherry Hill. Gormley had lived in the second-floor unit of the home since 2012. After plaintiff purchased the residence in August 2021, the parties entered into a one-year lease that converted to a month-to-month tenancy. New Jersey’s Anti-Eviction Act (AEA), N.J.S.A. 2A:18-61.1 to -61.12, prohibits the removal of residential tenants covered by the Act except upon proof of statutorily enumerated good cause — effectively creating what the courts have described as a “perpetual tenancy” for blameless tenants who continue to pay rent.
In the first round of litigation, the Appellate Division reversed the trial court’s entry of a possession judgment, finding that the AEA invalidates any lease provision allowing termination of a covered residential tenancy without good cause and that mere expiration of a month-to-month lease is not a recognized ground for eviction under the Act. Following that reversal, plaintiff sent Gormley a December 2024 notice to quit, this time invoking a purported sale of the property to a new buyer, Finest Address, LLC, an entity planning to demolish and reconstruct the premises. A new eviction complaint was filed in February 2025 raising four grounds: (1) plaintiff had contracted to sell the property to a buyer requiring vacant possession at closing; (2) timely notice to vacate had been given; (3) the buyer intended to demolish the building and personally occupy after reconstruction; and (4) the month-to-month tenancy had expired.
The Special Civil Part granted plaintiff a judgment of possession in April 2025, remarking that Gormley was “calculating” in maintaining below-market rent and was “on notice for two-and-a-half years” that the plaintiff wanted the property back. The court characterized her conduct as “squatter-like” when denying reconsideration. Gormley appealed, and the Appellate Division granted a stay pending appeal.
The Court’s Holding
The Appellate Division reversed unanimously, holding that plaintiff failed to establish good cause for eviction under any of the four grounds asserted. The court’s analysis focused on N.J.S.A. 2A:18-61.1(l)(3), which permits eviction when “[t]he owner of a building of three residential units or less . . . has contracted to sell the residential unit to a buyer who wishes to personally occupy it” and the contract calls for a vacant unit at closing. The panel found this provision inapplicable because the purported buyer, Finest Address, is an LLC — a legal entity that cannot “personally occupy” a residential property within the meaning of the statute.
Relying directly on its 2009 precedent in 3519-3513 Realty, LLC v. Law, 406 N.J. Super. 423 (App. Div. 2009), the court reaffirmed that expanding the universe of parties entitled to dispossess blameless tenants would contradict the AEA’s core purpose. The fact that a co-managing member of Finest Address intended to eventually use the unit was irrelevant because the member, not the LLC, would hold title. The court pointedly noted that property owners who choose to organize as LLCs for liability protection must accept the concomitant limitation that the LLC cannot assert personal-occupancy rights under the AEA. Because plaintiff failed to satisfy any statutory ground for removal under N.J.S.A. 2A:18-61.1, the trial court erred in granting possession and its characterization of Gormley as a bad-faith holdover was legally irrelevant to the statutory analysis.
The court declined to address Gormley’s remaining arguments — including the notice timing defects (notice sent before the agreement of sale was signed) and the claim that demolition-plus-reconstruction invoked the eighteen-month notice requirement of N.J.S.A. 2A:18-61.1(h) — having already found the reversal warranted on the LLC-occupancy issue alone. The panel reversed outright and did not retain jurisdiction.
Key Takeaways
- An LLC buyer cannot satisfy the “personally occupy” requirement of N.J.S.A. 2A:18-61.1(l)(3), even if a managing member of that LLC intends to reside in the unit — the title holder controls, not the human behind it.
- New Jersey’s Anti-Eviction Act creates a near-absolute bar against displacing covered residential tenants absent statutory good cause; a trial court’s moral assessment of a tenant’s motives for staying is not a recognized basis for eviction under the Act.
- Landlords relying on N.J.S.A. 2A:18-61.1(l)(3) must ensure the sales contract is executed before the notice to quit is delivered and that the named buyer is an individual capable of personal occupancy — procedural and substantive defects are independently fatal.
Why It Matters
This decision reinforces the breadth of tenant protection under New Jersey’s Anti-Eviction Act and closes what might otherwise have become a significant workaround: routing title to a residential property through an LLC while having a human member claim personal-occupancy rights to justify eviction. NJ practitioners advising landlords who sell to investor entities must now counsel clients that structuring a sale through an LLC will foreclose the “owner-moving-in” eviction ground entirely. Counsel representing tenants can cite this case for the proposition that the LLC form is not merely a technicality the courts will look past when the AEA’s protective purposes are at stake.
The case also illustrates the Appellate Division’s consistent willingness to correct trial courts that substitute equitable judgments about tenant “blameworthiness” for strict application of the AEA’s statutory requirements. The Act’s protections are not contingent on a judge’s view of whether a tenant deserves to stay; the legislature has already made that policy choice, and courts must follow it.