Inherited tenants and lease violation- NEW JERSEY

[Weronika Jedrak]

Hello, my husband and I closed on our first rental property in Woodbury, New Jersey. We unfortunately inherited the tenants, but the property was a good deal, so we went for it.  It is a duplex, both tenants pay $700 & &760/month (yes, in New Jersey!!), one has a current lease until January 31,2025, the other is month-to-month. The market rents are between 1200-1500/month. We ideally hoped we can have at least one tenant move out so we can renovate, but that doesn't seem to be the case. We are negotiating with the month-to-month tenant as they don't want to leave and hopefully, we will come to some agreement there. 

However, the problem we have is with the tenant on the lease. Once we closed on the property, we got the documents from state about his section 8 voucher. We were confused as the previous landlord said he wasn't on state benefits and paid the rent directly in the last 10 years ( we have texts to confirm that). So we had a conversation with the tenant and turned out, he just got approved for it, like a week ago. We weren't thrilled as the unit won't pass easily the section 8 inspections in the current condition, and it's also extra work for us. We knew we couldn't do anything until his lease expired but once we had a conversation with him, he kind of suggested he wanted to move out sooner, which was great news for us, and we said we wouldn't charge him fees if he broke the lease earlier. He even said, don't worry about filling the paperwork for state, I will just give it to a new landlord. 

Well, a week has passed, and we wanted to check in on that. He then turns around and says, he didn't find anything he likes so he's staying. We read over the lease again and when we came to his apartment, we noticed a cat. The lease says, absolutely NO PETS allowed. He also changed the locks few months ago, which is also not allowed. We didn't want to make a big deal and serve him Notice to Cease since he said he wanted to move. But now he is staying so we decided to play the cat card, and told him that per his lease pets not allowed and if he would like to keep it we will need to amend his lease to include additional $100 pet rent plus collect additional security deposit. My husband is also very allergic to cats and will cost us a lot of money to deep clean the apartment once he moves out which is what we explained. Again, lease said no pets, so we were pleased about that. We tried to be cordial but now he started showing his true colors. He said this is way too much money, the other landlord verbally agreed to a cat (there are no documents, no notice and he filled estoppel agreement and did not mention anything about it), he said he had this cat for the last 10 years and he won't pay that much, and he can take us to court because he has tenants' rights. 

Well technically he breached the lease twice (having a cat in the property and changing locks- we don't even have a key). So what are our options? We honestly want him out as he is already problematic and threating us plus now, we would have to deal with section 8 paperwork, and additional inspections. Can we just not fill the paperwork since we just learned about this, and he also violated the lease? Should we let the housing authority (section 8) know that he violated the lease and unless it is amended, which we gave him an option to, we will not fill in the paperwork? Should we serve him Notice to Cease and then pursue the eviction?

I know it is a long post, but any help and guidance are much appreciated! This is our first rental. I know NJ is tough on landlord laws but looks like in this case we may have actually some grounds to fight it. Thank you in advance.