Practically every landlord of residential real property in New Jersey, including single-family detached houses, is covered by the state’s Rent Security Deposit Act. Under that statute, a security deposit is not an additional payment made by a tenant to a landlord, but a sum held in trust by the landlord for the tenant’s benefit except when the landlord is entitled to apply some or all of the deposit to cover unpaid rent or damage caused by the tenant.
The Rent Security Deposit Act imposes stiff penalties for a landlord’s failure to satisfy its terms. If you need advice about the best ways to stay compliant with the statute, discuss your options with a knowledgeable attorney at Accisano Law Offices in Freehold.
Double Damages for Untimely Return of Security Deposits
New Jersey law requires landlords to return the security deposit to a tenant (less unpaid rent or covered repair expenses) within 30 days after the tenant vacates the premises. Any deductions for rent or damage repair must be detailed in a list provided to the tenant. Landlords who do not make timely payment of damage deposits to tenants are exposed to double damages, that is, twice the amount unlawfully withheld, as a statutory penalty.
Property owners and managers need to have a clear idea of what can be properly withheld from the refund, with damage repair and cleaning expenses the most common points of confusion. While the landlord is entitled to recover repair costs for damage caused by the tenant that goes beyond normal wear and tear, the landlord should not charge for routine painting, maintenance or replacement costs. For example, replacing a worn carpet is not an allowable damage expense, but replacing one that was badly stained or burnt by the tenant can usually be charged against the damage deposit.
Similarly, tenants are responsible for leaving the premises “broom clean” at the end of the lease, but should not be charged for such cleaning expenses as window washing, carpet cleaning or refinishing woodwork. If you have any questions about allowable deductions from tenants’ deposits, a lawyer’s advice can give you a specific understanding of your rights and responsibilities.
Maintaining Damages Deposits in Interest-Bearing Accounts
Experienced landlords and property managers understand the importance of keeping security deposit funds in separate interest-bearing accounts. If you have 10 or more rental units, you are required to maintain such deposits in qualified accounts, and any failure to do so can result in the tenant’s right to request that the deposit be applied to past-due or future rent. The landlord has no right to request an additional deposit in this circumstance.
Landlords who operate at a smaller scale can also be required to maintain security deposits in an interest-bearing account at the tenant’s request. Interest on deposits needs to be paid annually to the tenant in the form of cash or a credit against rent due.
Call 732-462-5770 in South Jersey for Advice About Security Deposits
With more than 35 years of experience in landlord-tenant law, Accisano Law Offices has an established reputation for dependability and prompt service on behalf of residential and commercial landlords throughout southern New Jersey. To learn more about our state’s Rent Security Deposit Act and the ways it affects your business, contact us in Freehold for an experienced lawyer’s advice. You can also visit our website at http://www.acclegal.com.