On this date in 1973, the Supreme Court decided Berzito v. Gambino, 63 N.J. 460 (1973). Berzito was the third in a series of Supreme Court decisions that modernized residential landlord-tenant law and gave more protections to tenants. In Reste Realty Corp. v. Cooper, 53 N.j. 444 (1969), the Court rejected caveat emptor in the residential landlord-tenant context, applied the doctrine of constructive eviction in favor of the tenant, and foreshadowed the adoption of an implied warranty of habitability. That implied warranty was then recognized in Marini v. Ireland, 56 N.J. 130 (1970). But Marini stated that where that implied warranty is breached, a tenant “has only the alternative remedies of making the repairs or removing from the premises upon a conostructive eviction.”
In Berzito, the Court took the next logical step. The premises in that case, located in Elizabeth, NJ, were in frightful condition, lacking heat, infested with roaches and rodents, and featuring a sewage backup in the cellar. The tenant, of very low income, neither repaired the defects nor claimed a constructive eviction. (Justice Mountain’s opinion for the Court noted that housing for low-income families was scarce in the Elizabeth area, meaning that the tenant did not have options if she claimed constructive eviction and moved out). Instead, she sued for the difference between the rent she paid and the reasonable value of the premises in their dismal condition. The landlord objected, based on the traditional rule of property law that the tenant’s obligation to pay rent was independent of the landlord’s duty to provide habitable premises.
The Court resoundingly rejected that argument. “It has been persuasively argued that while the doctrine of independent covenants, and the strict application of the rule of caveat emptor historically so typical of leasing arrangements, may have resulted in fulfilling the reasonable needs and expectations of landlords and tenants in the agrarian society of medieval England, this is no longer true in modern urban and suburban society. Today the tenant needs and expects more than mere land itself. He generally needs and expects adequate shelter, heat, light, water, sanitation and maintenance. It is obviously unsatisfactory to tell him that he may sue his landlord for any failure to supply these necessities, but that at the same time he must make recurring rental payments as they fall due.”
Justice Mountain announced that the tenant’s covenant to pay rent and the landlord’s covenant of habitability, whether implied or express, were now dependent. A tenant could thus defend an action for unpaid rent by pleading a breach of the covenant of habitability. Alternatively, the tenant could initiate an action against a landlord to recover all or part of rent paid that exceeds the reasonable value of the premises in their “imperfect condition.” The Marini limitation on tenant remedies was dismissed as “a casual dictum.”
The Court did not, however, leave landlords without protection. “As a prerequisite to maintaining such a suit, the tenant must give the landlord positive and seasonable notice of the alleged defect, must request its correction and must allow the landlord a reasonable period of time to effect the repair or replacement. Not every defect or inconvenience will be deemed to constitute a breach of the covenant of habitablity. The condition complained of must be such as truly to render the premises uninhabitable in the eyes of a reasonable person.” The Court cited a number of decisions from other states that had similarly abandoned the antiquated notion of independent covenants.
Berzito is one of many decisions of the Weintraub Court that placed the Supreme Court of New Jersey in the vanguard of the modernization of the common law in areas such as torts and property. The case has had lasting impact to this very day, and deservedly so.