What Happens to the Residential Security Deposit?
The landlord must place security deposits in an interest-bearing account in a bank or saving and loan association in New Jersey at the time the lease is signed. The landlord must give the tenant written notice of where the money has been deposited within 30 days.
If the landlord does not return the security deposit within 30 days from the date the tenant moves out or vacates the property, the tenant can sue to recover double the amount due, plus court costs and reasonable attorney’s fees, if any. If the amount is $5000 or less, the tenant can sue in the Small Claims Section of the Special Civil Part Court. If the amount is more than $5,000, the tenant can sue in the Special Civil Part. If the amount is more than $15,000, the tenant must sue in the civil part section of the Law Division.
The landlord must notify the tenant, within those 30 days from the date that the tenant vacates the rental property, if the landlord intends to keep some or all of the security deposit to pay unpaid rent and/or to pay for the cost of the repairs, if any. If the amount of any damage caused by a tenant plus any unpaid rent is more than the security deposit, the landlord can sue for the additional money.
If a residential building is sold, the seller must turn over each security deposit plus any interest to the buyer and notify each tenant by registered or certified mail.
