CONVEYANCE OF (RENTAL) PROPERTY
If the property is sold, foreclosed or conveyed for reasons of bankruptcy or insolvency, the
former owner within five (5) days of the date of delivery of the deed, instrument of assignment
or court order, must turnover to the new owner all securities plus the tenant’s portion of interest
earned and notify the tenant by registered or certified mail of the name and address of the new
person holding the tenant’s security deposit. Once transfer and notification is made, the former
owner is relieved of responsibility for the security deposit. The person receiving the security
deposit along with the tenant’s portion of the interest becomes responsible for the return of the
money to the tenant.
It is the duty of the new owner to obtain the security deposit, plus accrued interest on the
tenant’s deposit, that was collected by the former owner. Therefore, whether or not the
deposit and interest are transferred to the new owner by the former owner, the new owner
is responsible for the investment of the security deposit, giving all notices and paying
interest, and for the return of the security deposit, plus any accrued earnings or interest. A
security deposit notice must be given by the landlord within 30 days of acquiring the property.
RETURN OF SECURITY DEPOSIT
Within 30 days after the termination of a tenant’s lease the landlord must return the tenant’s
security deposit plus the tenant’s portion of interest, less any allowable fees, by personal
delivery, certified or registered mail. In addition, an itemized list of interest, earnings and
deductions from the security deposit must be sent to the tenant within 30 days by personal
delivery, registered or certified mail.
If the landlord fails to return the tenant’s security deposit within 30 days, then the tenant is
entitled to sue the landlord for the return of the security deposit. If the tenant sues successfully
for the return of the security deposit, the Court shall award recovery of double the amount of
money, along with full costs of any action and, in the Court’s discretion, reasonable attorney’s
fees.
However, the landlord may deduct from the security deposit money for property damage that is
more than ordinary wear and tear and any money due the landlord under the lease or agreement.
If the amount of money owed to the landlord exceeds the amount of the security deposit, the
landlord may sue for the difference. No deductions shall be made from a security deposit of a
tenant who remains in possession of the rental premises.
Termination of Lease Due to Domestic Violence
If a tenant terminates the lease agreement prior to the expiration of the lease pursuant to
the Safe Housing Act, N.J.S.A. 46:8-9.6, because by continuing to live at the rental unit,
the tenant or the tenant’s child faces an imminent threat of serious physical harm from
another named person, the tenant is entitled to the return of his or her security deposit.
Within 15 business days after the lease is terminated, the landlord shall make available
the return of the tenant’s security deposit, plus any interest earned, to the tenant or the
tenant’s agent. In addition within three business days after the lease is terminated, the
landlord must notify the tenant in writing of when and where the tenant can pick up the
security deposit. If the last known address for the tenant is at the property where the
tenant no longer resides, the landlord shall post notices at each exterior entrance of the
property. If the tenant does not collect the security deposit within 30 days, it shall be
redeposited or reinvested by the landlord in the same bank from which it was withdrawn.