security deposit accounts in new jersey (leases, tenants, landlords)

[dslawinski]

My landlord did not put our security deposit into a bank account. Now when asking for the security he is coming up with all kinds of damages just to keep the security plus more. It is my understanding from reading that he is not even entitled to the security deposit because he did not following the law, but he is also has to pay 7% interest per yr. Anyone have any information on this.

[brookdaleresident]

Landlords are required to deposit the security into an interesting bearing account. Landlords are required to state the name of the bank where the money is deposited in the lease.They can keep part of the interest as an administrative fee. I've never heard of 7%. If a tenant causes damage to the property, a landlord is entitled to keep the security, plus collect additional money to cover damages, assuming they are legit.
Check these sites for more info:

LSNJLAW - D: Chapter 3: Security Deposits

Landlord/Tenant Section Frequently Asked Questions

[java addict]

Realize that it's been a while since original post, but wanted to clarify info provided by brookdaleresident. ALSO, under current NJ law, landlords CANNOT withhold 1% admin fee!

Under NJ law, landlords have very specific obligations concerning tenant's security deposit. Here's a link which provides all info in pretty understandable terms: http://www.ohiolandlordtenant.com/njsample.pdf

AMENDMENT TO LAW EFFECTIVE JAN 2004! CHECK YOUR FORM LEASES TO MAKE SURE THAT LANDLORD IS NOT USING OLD FORM WITH ILLEGAL PROVISIONS. Now, landlords must provide tenant with written notice within 30 days of receiving security deposit. This notice MUST contain all 5 items required under law (see link for specifics) and MUST be sent to tenant properly (ie, as required under lease). If not, then tenant can send written notice to landlord to apply entire deposit (plus applicable accrued interest) against rent. Landlord CANNOT contest this if cannot prove required notice sent properly.

Also, landlord MUST give similar written notice every year and pay accrued interest to tenant. If annual notice NOT given, then tenant can send written notice and landlord has 30 days to comply. SEE LINK FOR SPECIFICS.

Trust me, I recently dealt with this very issue and on principle, ended up taking it to court because the landlord kept trying to railroad me (I won and entire building benefited from it). Sadly, I'm sure that tenants will continue to have problems or be taken advantage of by landlords.
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Also, see http://www.state.nj.us/dca/codes/lt/pdf/t_i_r.pdf (NJ Truth in Renting - see p9-11)