New Jersey recognizes an implied warranty of habitability in every residential lease under Marini v. Ireland, 56 N.J. 130 (1970), regardless of lease language. If a landlord fails to repair vital facilities after notice, the tenant may use repair-and-deduct or, under Berzito v. Gambino, withhold rent and obtain a rent abatement.
In Marini v. Ireland, 56 N.J. 130 (1970), the New Jersey Supreme Court held that a residential lease carries an implied covenant that the premises are fit for habitation, with "no latent defects in facilities vital to the use of the premises" and that those facilities "will remain in usable condition." Where a landlord fails to make a vital repair after the tenant gives notice and a reasonable chance to fix it, the tenant may make the repair and deduct the reasonable cost from rent. Berzito v. Gambino extended this, holding the duties to pay rent and to maintain habitable premises mutually dependent and letting the tenant withhold rent and receive a rent abatement reflecting the property's reduced value while defective.
No specific statutory penalty. A tenant may deduct repair costs, withhold rent, or assert breach of habitability as a defense and counterclaim in an eviction case, with the court setting a rent abatement; serious code violations can also trigger rent receivership under N.J.S.A. 2A:42-85 et seq.
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