State Specific Question About: NEW JERSEY (NJ)

I am a landlord in NJ. When my tenant moved in I asked them verbally for a W-9 and copy of DL for open of security deposit account. They never gave to me and I forgot to follow up. Now six month in to the lease they claimed I didn't open the back account so they want to use security deposit toward the rent. I read NJ law and there seemed to be a 30 day time period within which I should be allowed to rectify the mistake when agreed to pay a 7% interest on the deposit. Is this true and how to handle the situation? Thanks.

Yes you have 30 days to correct or face major problems.

You need to send them certified envelope with W9 in it with letter to comply you need to receive W9 back in XX days ( you do not need drivers lic to open landlord/ tenant account. like 7 days don't let them string you along.

If they do not comply then you have proof certified letter request.

If they do not comply proceed with getting them out - security is NOTHING TO FOOL with in the eyes of any court - you need to quickly cover your but on this one.

They sound like what I call a professional tenant who has pulled this before. If they want to use security to pay rent and they are moving I would get everything in writing hopefully you got a month & 1/2 security so you hve the 1/2 if there is damage. If they want to use the security to pay rent and they are going to continue to keep living there FORGET IT.

IF they are moving do a walk thru before you agree to using money get EVERYTHING IN WRITING - they are leaving completely by midnight XX date. Last months rent will be paid via security - if they do not comply / move then the agreement is null and void ETC.

The applicable statute: NJSA 46:8-19.c(5)

There is an unpublished 2005 Appellate Division case; Dira management/ Anna reality v. Dawn Banks

Within the decision the court states “However, where the annual notice has not been timely provided, the landlord is given the opportunity to "cure" the deficiency before the tenant's security deposit may be applied against her current rent:” so the thirty day to cure, is very fact specific to annual notices, notice of change of account, or institution

The court does note: “By the same token, while the Act's intent is to alleviate certain practices employed by unscrupulous landlords, it is not to punish those landlords who act in good faith. Burstein v. Liberty Bell Village, Inc.”

And in Princeton Hill Assoc. v. Lynch, “Instead of directing automatic application of the statutory remedy, we held that the landlord was to be afforded the "opportunity to present any evidence concerning any acceptable excuses for the late deposit, as a basis for an equitable relaxation of the seemingly mandatory language of the statute”

So in your fact pattern, you cannot rely on the 30 days to cure, but can try under the Princeton Hill assoc. case, using the fact the tenant refused to provide the info, to try and present “any acceptable excuses” but that is an uphill battle since the court also states “seemingly mandatory language of the statute”

One question where did you park the security deposit? Did you mingle the funds in a personal account? If the case might be hard to defend, also do not forget if the court rules in favor of the tenant, you cannot request additional SD for as long as they stay in the rental