Financing in 07111>Question Details

Michelle Kit…, Home Buyer in 20772

in NJ. does interest on rental security deposits have to be addressed in lease for tenant to get the interest?

Asked by Michelle Kitchens, 20772 Wed Oct 12, 2011

i lived in apt for 7yrs. landlord held $2175. for the 7yrs but now that i am leaving he says he owes me no interest because it isnt written into lease? i think he is trying to rip me off?

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NJJoany’s answer
No, it is written into the Law. Here is the section to link to. We, too, are fighting to get back my deceased daughter's deposit back with 10 yrs interest. We will go to Small Claims Court with our demands (Law is on our side) & if we win, we get back double the deposit and double the interest. download a copy of the Secion on Security Deposits, highlighting the part on interest. Not only that, but the interest cannot be used for any repairs that are more than usual wear and tear and before the Landlord can deduct for repairs, they must show receipts. Double check it. Joan
0 votes Thank Flag Link Sun Oct 16, 2011
I too believe it to be the law and have never seen it mentioned in lease. I wouldnt be shocked if not only are you entitled to the interest but triple damages if landlord with holds. (get his position in writing, also take pictures of every room when you leave to be able to document condition. hopefully you took pictures when you moved in. he can hold money for damages beyond normal wear and tear)
0 votes Thank Flag Link Wed Oct 12, 2011
SECURITY DEPOSIT NOTICE

Under the Rent Security Deposit Act the landlord has to put your security deposit in a separate bank account that pays interest. The landlord must tell you in writing the name and address of the bank where the deposit is being kept, the amount of the deposit, the type of account, and the current interest rate for that account. NOTE: The Landlord may put this directly in the lease.

The security deposit law says that this notice has to be given to the tenant in writing within 30 days after the tenant gives the deposit to the landlord. The law says that the landlord must also give the notice not just within 30 days of getting it from the tenant, but each year at the time the landlord pays the interest to the tenant.
A new landlord must also give the notice within 30 days of buying the property. The notice must be given to the tenant within 30 days after the landlord has moved the deposit from one bank to another, or from one bank account to another (unless the change in the bank or account takes place less than two months before the annual interest payment)

Your security deposit as rent : The law also says that if the landlord does not put the security money in a proper bank account, or does not give a proper written notice to the tenant every time the law provides for, then the tenant can give a written notice to the landlord telling the landlord to use the whole deposit interest per year to pay the tenant's rent.

All notices should be sent to the landlord by certified mail, return receipt requested, and you should keep a copy.
The money can be used to pay future rent or any back rent the tenant owes. Once a tenant legally tells the landlord to use the security deposit as rent, the landlord can't ask the tenant for another deposit as long as the tenant lives in the apartment or house.

Note: There are two exceptions to the rights described in the paragraph above.

* If a landlord does not obey the law that says he or she must pay the interest on the security deposit every year (or if the landlord does not use the interest to pay part of the tenant’s rent), or
* If the landlord does not give a notice about the deposit to the tenant every year, then

the tenant can use the deposit to pay past or future rent due.
But before the tenant can do this, the tenant must give or send the landlord a letter giving the landlord 30 days to pay the interest or give the annual notice.

http://www.rentlaw.com/dep/njdeposit.htm
0 votes Thank Flag Link Wed Oct 12, 2011
RESIDENTIAL SECURITY

The security deposit generally must be deposited in an interest-bearing account in a bank or saving and loan association in New Jersey at the time the lease is signed. The landlord must give written notice of where the money has been deposited within 30 days of receipt by the landlord.

If the landlord does not return the security deposit within 30 days from the date the tenant moves out of the premises, the tenant may sue to recover double the amount due, plus court costs. If the amount sought is $3,000.00 or less, the tenant may sue in the Small Claims Section. If the amount sought does not exceed $15,000.00, the tenant may sue in the Special Civil Part. If the amount sought exceeds $15,000.00, the tenant must sue in the Law Division.

The landlord must notify the tenant of the amount of the security deposit being retained and the nature and cost of the repairs.

If the amount of any damage caused by a tenant plus any unpaid rent is more than the security deposit, the landlord may sue for the additional money.

If a residential building is sold, the seller must turn over each security deposit plus any interest to the buyer and notify each tenant by registered or certified mail.

http://www.judiciary.state.nj.us/civil/civ-04.htm
0 votes Thank Flag Link Wed Oct 12, 2011
He is. See link and here:

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.
A person who receives security money for ten or less units must deposit that
money in a bank or savings and loan association in New Jersey in an account bearing
interest at the current rate. A person 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 chartered bank, or
savings and loan association in New Jersey in an account bearing a variable rate of
interest.
0 votes Thank Flag Link Wed Oct 12, 2011
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