Security Deposits
N.J.S. 46:8-21.2: Limitation on amount of deposit;
N.J.S. 46:8-20: Procedure on conveyance of property;
N.J.S. 46:8-21.1: Return of deposit; displaced tenant
A security deposit is an amount charged by a landlord at the beginning of a lease arrangement, in addition to rent, that is deposited in a bank account until the lease ends. A landlord may generally use this money to pay for any damage or repairs to the rental unit by the tenant during the lease. Any remaining money must be returned to the tenant at the end of the lease.
In New Jersey, a landlord cannot charge more than 1½ months rent as a security deposit for a residential lease.
Effect of change of ownership on security deposit
When a landlord sells or transfers rental property to someone else, the landlord must transfer all security deposits to the new owner within five days of the sale or transfer. The landlord must advise the tenants in writing of the name and address of the new owner.
Return of security deposit at end of lease
Within thirty days after a lease ends, the landlord must return the security deposit (plus all accumulated interest).
- The landlord can only deduct money from the deposit according to the terms of the lease.
- Deductions may include the costs of repairing damage, but cannot include unpaid rent unless agreed to in the lease.
- Any deductions must be explained in detail.
- The security deposit must be returned to the tenant personally or by registered or certified mail.
The deposit must be returned within five business days if a tenant is forced out because a building inspector or other official has:
- Prohibited occupancy due to fire, flood, condemnation or others reasons, or
- Determined that the tenant must stay out of the unit for more than seven days.
If a landlord does not return a tenant’s security deposit within the required time, the tenant can sue the landlord. The landlord may have to pay double the amount of deposit withheld plus court costs and attorneys fees.
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