Over one year ago, this firm’s client, a commercial landlord, was stuck in a worst-case scenario. Its commercial tenant—a semi-truck refurbishing business, which stored nearly 700 trucks on the leased premises—had not paid any rent for over five months. Settlement discussions came and went, and fell short. On behalf of the client, we filed a successful dispossession action in landlord-tenant court, and a Warrant of Removal was issued against the tenant shortly thereafter. Great … but what about the 700 trucks still on the premises? The tenant had no intention of moving them. With the client nearly out of options—and feeling the financial squeeze—we moved before a New Jersey Chancery Court on an order to show cause seeking a Warrant of Distraint under N.J.S.A. 2A:33-1 to -23 (the “Distraint Act”).
Under the Distraint Act, a commercial landlord may seize a commercial tenant’s goods and chattels located on the leased premises in a nonjudicial proceeding to satisfy up to one year of rental arrears. N.J.S.A. 2A:33-1 to -23; Callen v. Sherman’s Inc., 92 N.J. 114 (1983). Simply put, if a commercial tenant stops paying rent, the landlord may physically seize certain goods located on the property (here, semi-trucks) and sell them at auction to satisfy rental arrears. The concept of landlord distraint dates back to the 13th century, where feudal English common law recognized it “as an exception to the principle that ‘self-help is an enemy of the law, a contempt of the king and his court.’” Callen, 92 N.J. at 120. Here in New Jersey, landlord distraint is “a common law right, now regulated by statute.” Van Ness Indus. v. Claremont Painting & Decorating Co., 129 N.J. Super. 507, 510 (Ch. Div. 1974). New Jersey’s “statutes have provided for distraint since 1795” and the current Distraint Act “still exhibits its feudal origins.” Callen at 121.
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