## Facts

- A landlord owned a large multifamily apartment complex in Newark, New Jersey, with parking facilities; a tenant occupied a ninth-floor apartment and rented a parking space.
- There was no written lease; the tenant and the landlord’s superintendent orally agreed that apartment rent would be $135 per month.
- The landlord sought rent at $156.17 per month (plus $7 parking), asserting the higher figure was the FHA-approved rent for the unit.
- The landlord filed a summary dispossess (eviction) action for nonpayment of rent under N.J.S.A. 2A:18-53(b), claiming unpaid rent for December 1969 through March 1970 and an additional November balance.
- The tenant intentionally withheld several months’ rent, alleging the landlord failed to provide essential services, including heat, hot water, adequate garbage disposal, repair of water leakage, and reliable elevator service.
- The tenant also argued that alleged noncompliance with a Newark ordinance requiring parking-lot illumination made the parking-fee agreement illegal and unenforceable.
- The court found four months of rent were unpaid and found no additional balance due for November 1969.
- The court took judicial notice of a serious housing shortage in the county when considering whether the tenant had to vacate to claim rent relief.

## Issues

1. Whether the applicable apartment rent was the orally agreed $135 or the FHA-approved maximum of $156.17.
2. Whether alleged noncompliance with a municipal parking-lot lighting requirement rendered the parking-fee agreement illegal and unenforceable.
3. Whether a residential tenant in a multifamily building may assert rent abatement for diminished habitability as a defense to a summary dispossess action for nonpayment.
4. Whether a tenant must vacate the premises to obtain rent abatement for the landlord’s failure to supply essential services, and how any abatement should be measured.

## Decision

- The court held the binding apartment rent was $135 per month; the FHA-approved figure was a maximum ceiling and did not control absent agreement.
- The court rejected the tenant’s illegality defense to the parking fee, finding no proof of ordinance violation and, in any event, treating any alleged illegality as collateral to the parking agreement rather than voiding it.
- The court held that a tenant in a multifamily building may claim a habitability-based rent abatement defensively in a summary dispossess action when essential services are not provided after notice.
- The court held the tenant was not required to vacate to seek abatement, particularly given the local housing shortage.
- The court recognized rent arrears but reduced the amount due by a partial abatement reflecting the diminished rental value during periods of service failure, resulting in a modified monetary outcome rather than the full amount claimed by the landlord.

## Legal Principles

- An FHA-approved rent may operate as a regulatory ceiling, but it does not substitute for the parties’ actual rental agreement.
- A contract term is not automatically unenforceable on illegality grounds where the alleged statutory or ordinance violation, if any, is incidental to performance and not the object of the bargain.
- In residential leasing, a landlord’s failure to provide essential services can reduce the fair rental value of the premises and justify a proportionate rent abatement.
- Rent abatement for reduced habitability may be asserted as a defense to nonpayment in a summary dispossess proceeding, reducing the rent “due” for purposes of eviction.
- Continued occupancy does not bar abatement; vacating is not a prerequisite where the breach is partial and housing alternatives are limited.

## Conclusion

The court treated the oral rent agreement—not the FHA maximum—as controlling, rejected an ordinance-based illegality defense to the parking fee, and permitted a tenant in a large multifamily building to offset rent with a partial, fair-value abatement for failures in essential services without requiring the tenant to move out.


Academy Spires, Inc. v. Brown, 111 N.J. Super. 477, 268 A.2d 556 (Essex Cnty. Dist. Ct. 1970)