Claims under the New Jersey Rent Security Deposit Act

New Jersey has one of the most stringent residential tenant security laws in the nation.  First, the landlord can charge no more than 1 ½ times the monthly rental amount as a security deposit.  Next, s/he must deposit the money in an interest bearing account for the benefit of the tenant, and notify the tenant of the name and address of the bank where the deposit is kept. Absent such notice, the tenant may elect on written notice to the landlord to apply the security deposit to the rent.  If the landlord raises the rent in the future, the most s/he can collect as additional security is 10% of the original security deposit.

When the tenant moves out, the landlord has 30 days to refund the security deposit, either in part or in full.  If the landlord gives a partial refund, s/he must also send a list of damages and costs of repair comprising the money retained by the landlord from the security, by certified mail.  If the landlord fails to refund the full security when a full refund is warranted, then the tenant may sue the landlord in small claims court for double the amount of the security plus costs, plus attorneys fees.  If the landlord makes a partial refund but does not provide the list of damages and costs of repair, the tenant may sue for double the withheld security plus costs, plus attorneys fees.  Please note that the landlord can only charge the tenant for property damage that is more than ordinary wear and tear.

If the building is sold, the new owner must get the tenants’ security deposits, plus interest, from the old owner. The law plainly states that the new owner is responsible to each tenant for the full amount of the tenant’s deposit, plus interest, whether or not the new owner actually got the deposit from the old owner.

Landlords need to familiarize themselves with the New Jersey Rent Security Deposit Act to avoid being sued for up to $5,000.00 in small claims court, and up to $15,000 in the Special Civil Part.

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