Also known as: net rents · net rental
Written by attorneys — see sources below.
Rental income derived from property after subtraction of expenses including taxes, maintenance, and repairs.
Noreen Nguyen, holding a junior mortgage on an office building, obtains appointment of a receiver. The receiver collects fifty thousand dollars after paying taxes and reasonable maintenance costs. When the senior mortgagee later appoints its own receiver, the first receiver retains the collected amount for Noreen Nguyen's benefit.
Nyah Ndlovu leases adjacent land to an urban redevelopment authority for use as a parking lot. The lease requires an annual payment of nineteen thousand eight hundred dollars after the tenant covers all operating expenses. The authority records the lease and later subleases the property to a supermarket operator.
Prior to September 1980 plaintiff Davidson Bros., Inc., along with Irisondra, Inc., a related corporation, owned certain premises located at 263-271 George Street and 30 Morris Street in New Brunswick. Plaintiff operated a supermarket on that property for approximately seven to eight months. The store operated at a loss allegedly because of competing business from plaintiff's other store, located two miles away at the Elizabeth Street property. Consequently plaintiff and Irisondra conveyed the George Street property to defendant D. Katz & Sons, Inc., by separate deeds containing a restrictive covenant that the lands shall not be used as a supermarket or grocery store for a period of forty years from the date of the deed. The deeds were duly recorded in the Middlesex County Clerk's office on September 10, 1980. After the closure plaintiff's Elizabeth Street store sales increased by twenty percent and became profitable. Plaintiff held a leasehold interest in the Elizabeth Street property that commenced in 1978 for twenty years plus two renewal terms of five years. According to defendants New Brunswick Housing Authority and City of New Brunswick the closure did not benefit downtown residents. Residents who lived two blocks away from the George Street store in multi-family and senior-citizen housing units were forced to take public transportation and taxis to the Elizabeth Street store. There were no other markets in downtown New Brunswick, save for two high-priced convenience stores. The residents requested the aid of the City and the Authority in attracting a new food retailer to this urban-renewal area. For six years those efforts were unsuccessful. Finally in 1986 an executive of C-Town approached representatives of New Brunswick about securing financial help from the City to build a supermarket. On October 23, 1986 the Authority purchased the George Street property from Katz for $450,000 with actual notice of the covenant. The Authority agreed to lease from Katz at an annual net rent of $19,800 the adjacent land at 263-265 George Street for use as a parking lot. The Authority invited proposals for the lease of the property to use as a supermarket. C-Town was the only party to submit a proposal at a public auction. The proposal provided for an aggregate rent of one dollar per year during the five-year lease term with an agreement to make $10,000 in improvements to the exterior of the building and land. The Authority accepted the proposal in 1987. All the defendants in this case had actual notice of the restrictions contained in the deed and of plaintiff's intent to enforce the same. Not only were the deeds recorded but the contract of sale between Katz and the Housing Authority specifically referred to the restrictive covenant and the pending action. Plaintiff filed this action in the Chancery Division against defendants D. Katz & Sons, Inc., the City of New Brunswick, and C-Town. The first count of the complaint requested a declaratory judgment that the noncompetition covenant was binding on all subsequent owners of the George Street property. The second count requested an injunction against defendant City of New Brunswick from leasing the George Street property on any basis that would constitute a gift to a private party in violation of the state constitution. Both counts sought compensatory and punitive damages. That complaint was then amended to include defendant the New Brunswick Housing Authority. Plaintiff moved for summary judgment, to which defendants responded by submitting three affidavits alleging the need for a supermarket in the area of George Street. The trial court denied plaintiff's motion and granted defendants' subsequent summary judgment motion. The Appellate Division affirmed and the Supreme Court granted certification. The record contains no evidence of the purchase price paid by Katz to Davidson. Plaintiff alleges that the purchase price negotiated between it and Katz took into account the value of the restrictive covenant and that Katz paid less for the property because of the restriction. The evidence on whether the supermarket lease serves a public purpose consists solely of three conclusory and vague affidavits. The affidavits state in very general terms that there is need for a supermarket for some unspecified number of low and middle-income residents. Those residents presumably do not drive and must take taxicabs or public transportation to the Elizabeth Street store two miles away, or shop at nearer but more expensive convenience stores. There is a need for more documentation of these assertions. The lease between C-Town and the Authority contains none of the detailed restrictions evident in Roe that made that private agency an arm of the government for purposes of carrying out a traditional government purpose.
View caseNet rent is the amount remaining after the receiver pays taxes and reasonable maintenance expenditures. A junior mortgagee's receiver may retain net rents collected before a senior receiver takes possession. The junior receiver must apply collected amounts first to those expenses.
Modern servitude law enforces such a covenant when it is properly created, recorded, and the successor takes with notice. The obligation need not touch and concern the land under contemporary doctrine. Public policy limits such as illegality or unreasonable restraint on alienation still apply.
Net rents from property acquired during marriage with marital earnings are marital property. Each spouse holds a present undivided one-half interest in both the equity and the income stream. Title in one spouse's name alone does not change the classification.
The court must consider the financial resources of the child, which include net rental income from inherited property. This factor is weighed along with parental resources and the child's needs. The income does not automatically eliminate the parental support obligation.
…on October 23, 1986, purchased the George Street property from Katz for $450,000, and agreed to lease from Katz at an annual net rent of $19,800.00, the adjacent land at 263-265 George Street for use as a parking lot. The Authority invited proposals for the lease of the property to use as a supermarket. C-Town was the…