Most residential leases and rental agreements in New Jersey require a security deposit. This is a dollar amount, usually one month's rent, that's intended to cover damage to the premises beyond normal wear and tear, and to cushion the financial blow if a tenant skips out early on the lease without paying. Here's a summary of New Jersey landlord-tenant laws that cover the use and return of security deposits.
Yes. Under New Jersey landlord-tenant law, landlords may charge the equivalent of one and one-half months' rent for the security deposit. Any additional security deposit, collected annually, may be no greater than 10% of the current security deposit.
To learn more about steps that tenants can take to protect their security deposit after they've paid it, check out Nolo's article Protect Your Security Deposit When You Move In.
Under New Jersey law, a landlord must return the tenant's security deposit within 30 days after the tenant has surrendered the rental property to the landlord (that is, returned the keys and vacated the property), but within five days in case of fire, flood, condemnation, or evacuation.
Learn more about tenants' rights and landlords' obligations when it comes to the return of the security deposit in Nolo's chart Cleaning and Repairs a Landlord Can Deduct from a Security Deposit and Nolo's article Get Your Security Deposit Back.
Yes. Landlords must keep security deposits in a separate account. Within 30 days of receiving the deposit (and every time the landlord pays the tenant interest), the landlord must disclose the name and address of the financial institution where the deposit is being held, the type of account, current rate of interest, and the amount of the deposit.
Landlords with 10 or more units must invest deposits as specified by statute or place deposit in an insured money market fund. Landlords with fewer than 10 units may place deposit in an interest-bearing account in any New Jersey financial institution insured by the FDIC. All landlords may pay tenants interest earned on account annually, or credit interest earned toward payment of rent due.
Yes. State security deposit laws do not apply to owner-occupied buildings with three or fewer units unless the tenant gives 30 days' written notice to the landlord of the tenant's wish to invoke the law.
If you want to go right to the source and look up New Jersey law on security deposits—or if you're writing a letter to your landlord or tenant and want to cite the applicable law—the relevant statute(s) can be found at New Jersey Statutes Annotated sections 46:8-19, 44:8-21.1, 44:8-21.2, 44:8-26 (2020). To access New Jersey statutes, visit the New Jersey Department of State's website, check out the Library of Congress's legal research site.