N.J. DCA Landlord/Tenant Information Series — (English)

Citation
N.J. DCA Landlord/Tenant Information Series — (English)
Jurisdiction
New Jersey (state)
Source
Official source
Original Source
https://www.nj.gov/dca/codes/publications/pdf_lti/t_i_r.pdf ↗

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(1972), and Reilly v. Weiss, 406 N.J. Super. 71 (2009), the courts determined that advanced rents
in excess of one and one-half times the monthly rental payment violate the Security Deposit Law.
Therefore, any prepaid funds held to secure future rents are considered to be a part of the security
deposit. This includes the last month’s rent. It does not matter how the prepaid funds are labeled.
The landlord may only require one and one-half times the tenant’s monthly rent as security and
the first month’s rent at the inception of the lease. That means the landlord may not require more
than two and one-half times the monthly rent at the inception of the lease, this includes the security
deposit and the first month’s rent. There is no time limitation within the statute for making the
request for a deposit.
The security deposit money continues to be the property of the person making the deposit
and must be held in trust by the person receiving the money. This means that the person who
receives the money must not use the money in any way not permitted by law. The security deposit
shall not be comingled with the personal property or become an asset of the landlord.
A landlord or designee who receives security deposit money for ten or less units must
deposit that money in an insured bank or savings and loan association located in New Jersey in an
interest-bearing account at the current interest rate at the time of deposit. A landlord or designee
who receives security deposit money for 10 or more units has the option of investing the money in
an insured money market fund of a New Jersey-based investment company where the investments
mature in one year or less, or deposit that money in a State or federally charted bank, or savings,
and loan association located in New Jersey