46:8B-32. Unconscionability of leases; rebuttable presumption; elements of lease

There is hereby established a rebuttable presumption of unconscionability with respect to leases involving condominium property, including, but not limited to, leases concerning the use by condominium unit owners of parking, recreational or other common facilities or areas. Such presumption may be rebutted by a lessor by the presentation of evidence of the existence of facts and circumstances sufficient to justify and validate a lease which would otherwise appear to be unconscionable under the provisions of this section. A rebuttable presumption of unconscionability shall arise if one or more of the following elements exist, but the failure of a lease to contain any of the following elements shall neither preclude a determination of its unconscionability nor raise a presumption of its conscionability:

a. The lease was executed by persons none of whom at the time of the execution of the lease were elected by condominium unit owners other than the developer, to represent their interests;

b. The lease requires either the condominium association or the condominium unit owners to pay real estate taxes on the subject real property;

c. The lease requires either the condominium association or the condominium unit owners to insure buildings or other facilities on the subject real property against fire or any other hazard;

d. The lease requires either the condominium association or the condominium unit owners to perform some or all maintenance obligations pertaining to the subject real property or facilities located upon the subject real property;

e. The lease requires either the condominium association or the condominium unit owners to pay rents to the lessor for a period of 10 years or more;

f. The lease provides that failure of the lessee to make payments of rents due under the lease either creates, establishes, or permits establishment of, a lien upon individual condominium units of the condominium to secure claims for rent;

g. The lease requires an annual rental which exceeds 20% of the appraised value of the leased property as improved; provided that for purposes of this subsection "annual rental" means the amount due during the first 12 months of the lease for all units regardless of whether such units were in fact occupied or sold during that period and "appraised value" means the appraised value placed upon the leased property the first tax year after the sale of a unit in the condominium;

h. The lease provides for a periodic rental increase based upon reference to a price index;

i. The lease or other condominium documents require that every transferee of a condominium unit must assume obligations under the lease.

L.1979, c. 297, s. 2, eff. Jan. 17, 1980.