Jerry each state sets a limit of what can be collected. Here in NH you can only collect the forst months rent and 1 months security. You can not collect last months rent or additional security for pets or smokers. In NJ of it it 1.5 times than no matter what it is called after 1.5 times is collected it may not be legal.
I am both a realtor and a landlord. I have researched these issues for my own edification as a landlord. As far as I know NJ law caps a security deposit at 1.5 months, period. It specifies there can be no additional 'pet deposit' so I can't imagine a 'rent default' deposit is permitted. Is it your listing? I would be hesitant to get involved. At the very least you should consult a landlord/tenant attorney to be sure the landlord is within his rights.