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Old 05-03-2011, 07:46 PM
 
57 posts, read 118,979 times
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Default Security Deposit in New Jersey

I rented a house in NJ and I paid a security deposit = 1.5x the rent. It's not a owner occupied house containing 3 rental units. My lease agreement states that the security deposit has been placed in a bank account. However, it doesn't have the bank name or address. So, as per NJ state law, I have the right to use the security deposit as rent.
I sent a notice to the landlord stating that I will use the security deposit as the next month's rent. He said he will provide me the bank information now within another 30 days and wants me to pay the rent for the next month. Is that acceptable?
Also, as per the law, he is supposed to give me the interest on security deposit. However, he said he has placed the security deposit in a checking account which doesn't yield any interest. So, he told me that he can't pay any interest. What should I do now?
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Old 05-03-2011, 09:25 PM
 
Location: NJ
17,580 posts, read 19,955,756 times
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I think the rules are pretty clear on this. Don't let the LL off the hook on this.

http://www.state.nj.us/dca/divisions...depsit_law.pdf
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Old 05-04-2011, 06:17 AM
 
Location: St Thomas, US Virgin Islands
21,636 posts, read 25,212,126 times
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Quote:
Originally Posted by manderly6 View Post
I think the rules are pretty clear on this. Don't let the LL off the hook on this.

http://www.state.nj.us/dca/divisions...depsit_law.pdf
Note the second paragraph, however, which says, "This subsection shall not apply to persons receiving money for less than 10 rental units except where required by the Commissioner of Banking and Insurance by rule or regulation. The commissioner shall apply the provisions of this subsection to some or all persons receiving money for less than 10 rental units where the commissioner finds that it is practicable to deposit or invest the money received with an investment company or State or federally chartered bank, savings bank or savings and loan association in accordance with this subsection."
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Old 05-04-2011, 08:03 AM
 
Location: The Triad (nc)
17,195 posts, read 21,839,868 times
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I'll assume you are an exemplary tenant who has done no damage whatsoever and subjected the unit to no more than "ordinary wear and tear" during the term of your tenancy. Would you agree?

On that basis... start by inviting the LL in for a preliminary inspection of the unit for condition, damages, etc. to see if there is anything that the LL might believe is not up to snuff and by that would affect his willingness (otherwise) to return the SD to you in full upon vacating the unit and within the time allowed to do so by NJ law (with any accounting for expenses etc).

Then give the LL notice of your intention to vacate IN WRITING with a date certain and continue to pay your rent in full and on time for your whole tenancy as you agreed to do when you moved in .
---

After all this and assuming all is still good between you two...
ASK him nicely if and how he might agree to suspend his contract rights as described in the lease to hold the SD and receive full rent payments while you are still in possession of his property.

Be sure to report back with what he tells you.
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Old 05-04-2011, 11:13 AM
 
Location: NJ
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Quote:
Originally Posted by STT Resident View Post
Note the second paragraph, however, which says, "This subsection shall not apply to persons receiving money for less than 10 rental units except where required by the Commissioner of Banking and Insurance by rule or regulation. The commissioner shall apply the provisions of this subsection to some or all persons receiving money for less than 10 rental units where the commissioner finds that it is practicable to deposit or invest the money received with an investment company or State or federally chartered bank, savings bank or savings and loan association in accordance with this subsection."
Nothing is straight forward. It also says this:

[LEFT]Persons not required to invest or deposit money in accordance with subsection a. of this
section shall deposit such money in a State or federally chartered bank, savings bank or savings
and loan association in this State insured by an agency of the federal government in an account
bearing interest at the rate currently paid by such institutions and associations on time or savings[/LEFT]
deposits.
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Old 05-04-2011, 12:46 PM
 
Location: The Triad (nc)
17,195 posts, read 21,839,868 times
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er guys... if the (small time) LL stuffed the money in a coffee can and buried it in his garden doesn't matter a whit until and unless he is shown to be unable to produce it AFTER the tenant has vacated the premises and otherwise subject to the basic scummy tenant repairs that I suspect will be needed.
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Old 05-04-2011, 12:47 PM
 
Location: St Thomas, US Virgin Islands
21,636 posts, read 25,212,126 times
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Quote:
Originally Posted by manderly6 View Post
Nothing is straight forward. It also says this:

[LEFT]Persons not required to invest or deposit money in accordance with subsection a. of this
section shall deposit such money in a State or federally chartered bank, savings bank or savings
and loan association in this State insured by an agency of the federal government in an account
bearing interest at the rate currently paid by such institutions and associations on time or savings[/LEFT]
deposits.
Nothing is ever straightforward where legalese is concerned and which I dealt with for many years. I did go back on the NJ laws you cited and to which I responded but this last post of yours in response has me a little flummoxed as your quote doesn't compute as a link.

I went back to the link you quoted and scrolled down but couldn't find anything akin to the substantiation you quoted. However, what I simply pointed out was that the NJ law where the landlord's handling of security deposits in general applies is right at the top of the list, even withstanding the if ands and buts which follow.

The LL in this case seems to be renting out a single family home, doesn't own or rent out multiple units and thus isn't required under NJ law to deposit the security in an interest-bearing account.

I do believe the OP is misinformed in expecting to receive interest on his security deposit and is definitely wrong in assuming he can use his security deposit as a last month's rent.

Under state law, the LL must return to the tenant within 30-60 days of quit (google "your state" landlord tenant laws for clarification as each state is different) the full security deposit less receipted documentation pertaining to the fix of any alleged damages to the property. The security deposit can also be deducted from for unpaid utility bills in the tenant's name and unpaid rent. Good luck!
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Old 05-04-2011, 01:00 PM
 
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STT it's right after what you quoted. You cited 1(a), manderly cited the next section 1(b).
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Old 05-04-2011, 01:14 PM
 
13,569 posts, read 16,411,735 times
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As per the interest and bank account information, regardless of the size of the entity, the funds need to be deposited into a bank in an interest bearing account and the name of the bank and account number as well as the interest rate paid provided to the tenant.

Per NJ law the OP is within their rights to demand that the security deposit be immediately considered as rent paid for the landlord failing to meet their obligation as well as adding interest at the rate of 7% per annum to the deposit amount. You must provide the landlord written notice of your intent to do this and they must comply to the statute within 30 days, or you can withold the next 1.5 (plus whatever interest is equal to 7% per annum for the time period and amount in question) rent payments.

HOWEVER, if there are no issues and you like the place and the landlord is otherwise a decent person, is it really worth starting a fight over? If it were me, I would remind them of my rights under the law and ask that the money be immediately transferred to an interest bearing account and the information be provided to me. You can choose whether or not you want to be a prick over the 30 or so days of the current .5% annual rate.

Last edited by NJGOAT; 05-04-2011 at 01:23 PM..
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Old 05-04-2011, 01:57 PM
 
Location: St Thomas, US Virgin Islands
21,636 posts, read 25,212,126 times
Reputation: 22321
Quote:
Originally Posted by NJGOAT View Post
As per the interest and bank account information, regardless of the size of the entity, the funds need to be deposited into a bank in an interest bearing account and the name of the bank and account number as well as the interest rate paid provided to the tenant.

Per NJ law the OP is within their rights to demand that the security deposit be immediately considered as rent paid for the landlord failing to meet their obligation as well as adding interest at the rate of 7% per annum to the deposit amount. You must provide the landlord written notice of your intent to do this and they must comply to the statute within 30 days, or you can withold the next 1.5 (plus whatever interest is equal to 7% per annum for the time period and amount in question) rent payments.

HOWEVER, if there are no issues and you like the place and the landlord is otherwise a decent person, is it really worth starting a fight over? If it were me, I would remind them of my rights under the law and ask that the money be immediately transferred to an interest bearing account and the information be provided to me. You can choose whether or not you want to be a prick over the 30 or so days of the current .5% annual rate.
Please do read up on LL Tenant Laws in NJ before disseminating information which is not entirely correct.
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