New Jersey Security Deposit Law for Landlords and Tenants

The New Jersey security deposit laws apply to all landlords, including single family homes and renters in an owner-occupied building.

Tenants can send their landlord in an owner-occupied unit a 30 day written notice that they'd like to be covered by these statutes and it must be enforced. Here are the key points of the law you'll want to know.

1. There Is a Limit On The Amount Of The Security Deposit.

Landlords are prohibited from collecting more than 1.5x the monthly rent as a security deposit.

This means a rental unit that is $800 per month can have a maximum security deposit of $1,200.

The most a landlord can collect for an additional security deposit if the rent increases is 10% of the current deposit. If the $800 rent goes to $1,200 in the second year of a lease, a landlord could only collect $120 for an additional security deposit instead of $200.

2. A Security Deposit Must Earn Interest.

The security deposit laws in New Jersey state that a security deposit must be placed in an interest-bearing account.

Tenants must be notified within 30 days in writing where this account happens to be. Interest must be paid out every year and this same notice must be given at that time.

If the notice is not given, then tenants have the right to have the landlord use their security deposit to pay any past or future rent that is due. This notice can be placed in the lease.

3. Some Landlords May Not Be Able To Ask For a Security Deposit.

If a landlord has not placed a security deposit into an interest bearing account or notified a tenant as to where their funds are being held, then after a tenant requests that these funds be used for rent, another security deposit cannot be requested.

This does not mean that a tenant is no longer liable for damage to the rental unit, but it does mean that a landlord must sue to get these claims if a tenant is unwilling to pay them.

4. A Security Deposit Must Be Returned Within 30 Days.

Claims to a security deposit can only be made for damage that is beyond ordinary wear and tear.

How that is defined is often based on the household that rented the unit in the first place.

Cleaning fees cannot be charged to tenants who leave a rental unit broom clean. Painting fees are rarely something that can be deducted from a security deposit.

An itemized list of deductions and the remainder of a deposit must be given to the tenant within 30 days of moving out.

The security deposit laws of New Jersey are designed to protect the best interests of both parties. For more answers, look at the NJSA codes or speak with a legal professional about what options may be available to you.

Posted on Apr 06, 2016


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