Real estate litigation can become complex and drawn out, involving multiple parties. That was certainly true when two disgruntled tenants of a New Jersey gated community sued their homeowner associations, the landlords, a holding company and its owner-manager for fraud and collusion.
After a long legal battle, the Law Office of Rajeh A. Saadeh, L.L.C., helped two landlord clients fend off the unfounded lawsuits. In fact, the case was so successful that our clients can pursue an award of attorney fees from the plaintiffs.
Dispute with homeowner association led to civil litigation
The lawsuits were initiated by tenants of a gated community that is governed by condominium association and homeowner association rules. The tenants frequently clashed with the associations and flouted the covenants, conditions and restrictions (CCRs). The ongoing conflicts led the associations to restrict the tenants’ access to the shared amenities (such as the pool and tennis courts) and eventually access to their residences.
Upset by a situation that arose from their own unruly behavior, the tenants sued, seeking substantial monetary damages. Their lawsuit named several parties: the condo and homeowner associations, the landlords, the company that owned the LLC landlords, and the owner-manager personally. The tenants contended that the parties conspired to violate the association bylaws, New Jersey landlord-tenant laws, rules governing corporations, and other laws including the Consumer Fraud Act.
The allegations unravel at trial
Attorney Rajeh A. Saadeh defended the two LLC landlords that owned the tenants’ units. After approximately two years of litigation and three weeks of trial – before the case got to the jury – the lawsuits largely fell apart. The judge dismissed all charges against the owner-manager and the company that owned the landlord LLCs, and dismissed the Consumer Fraud Act claims against our clients.
Ultimately, based on evidence and testimony of numerous witnesses, the jury awarded nothing to one tenant (who is the president of the Jersey City Board of Education) and a nominal amount to the other tenant. Ironically, due to the success of the case, the LLC landlords and the owner-manager can now seek to have the tenants reimburse their attorney fees.
They did everything right to protect their investment
Some landlords place their property in an LLC (limited liability company) as an extra layer of protection from exactly these nightmare scenarios. In a lawsuit, the assets of the LLC are kept at arms-length from other business assets and from the personal assets of the members (owners).
While an LLC limits the personal liability of the members, it does not confer any immunity to the entity itself. As our clients learned, an LLC can be sued the same as an individual, and that business entity needs skilled and vigorous representation.
Our experience in real estate litigation includes HOA disputes, landlord-tenant litigation, foreclosure and eviction, breach of contract, and the “corporate veil” of real estate ownership entities. We represent landlords, homeowner associations or unit owners.