You cannot simply terminate the month to month lease. Perhaps my Chicago colleague should stick to Illinois law . Do not listen to that advice. It is simply wrong. Unless the premses is an owner occupied dwelling with no more than two rental units, you need good cause to terminate the lease. The failure to pay utilities may be a ground for eviction as it could consitute a fire hazard or other hazard. I strongly suggest that you consult with an experienced NJ landlord-tenant attorney.
Actually a month to month tenancy is easy to terminate. In New Jersey, landlords must have a just cause to terminate a tenancy (their nonpayment of rent/utilities seems like it would meet these requirements), and must provide at least one month’s notice and specify the date on which your tenancy will end.
The landlord may provide less notice if the tenants have not paid rent or if the tenants have violated other terms of your rental agreement (for example, bringing in an unauthorized tenant -- using the washer/dryer impermissibly, etc.), or if the tenants have violated basic responsibilities imposed by law (such as by dealing drugs on the rental property).
Considering the nature of these tenants, it would be worth it to you to consult a local attorney regarding this so that your "t's" are crossed and "i's" dotted in getting these tenants out.
DISCLAIMER: Brandy A. Peeples is licensed to practice law in the State of Maryland. This answer is being provided for informational purposes only and the laws of your jurisdiction may differ. This answer based on general legal principles and is not intended for the purpose of providing specific legal advice or opinions. Under no circumstances does this answer constitute the establishment of an attorney-client relationship. For legal advice relating to your specific situation, I strongly urge you to consult with an attorney in your area. NO COMMUNICATIONS WITH ME ARE TO BE CONSTRUED AS ARISING FROM AN ATTORNEY-CLIENT RELATIONSHIP AND NO ATTORNEY-CLIENT RELATIONSHIP WILL BE ESTABLISHED WITH ME UNLESS I HAVE EXPRESSLY AGREED TO UNDERTAKE YOUR REPRESENTATION, WHICH INCLUDES THE EXECUTION OF A WRITTEN AGREEMENT OF RETAINER.
First you must serve the Tenants a notice to quit that details the Tenants breach. If you do not serve the notice to quit any court case will be dismissed. One thought, you can raise the rent. You must serve the Notice to Quit that unless the rent increase is paid. However, this can backfire, if they move and you need the rent you will be in worse position