NJ Security Deposit Act rules at N.J.S.A. 46:8-19 to 46:8-26 treat your deposit as your money, held in trust. If your letter cites the NJ Security Deposit Act, remember 30 days: the return deadline after your lease ends.
What NJ Security Deposit Act Actually Says
Most letters cite just one piece of the law. For example, 46:8-21.1 is the return rule. Section 46:8-21.2 is the cap. Here is what the whole NJ Security Deposit Act says, in plain English. You can read the full text in the official Security Deposit Law from the NJ Department of Community Affairs.
First, your deposit stays your property. The landlord holds it in trust for you. Under 46:8-19, it cannot be mixed with the landlord’s own money. The interest belongs to you, too. In addition, the state’s Security Deposit Bulletin (revised July 2025) says landlords can no longer take administrative fees from the deposit.
Second, you cannot sign these rights away. Under 46:8-24, any lease clause that waives the NJ Security Deposit Act is void. So a lease that says “no interest” or “deposit is non-refundable” does not erase the law.
| Provision | Exact rule | Section |
|---|---|---|
| Deposit cap | No more than 1.5 times one month’s rent | 46:8-21.2 |
| Deposit increases | No more than 10% of the current deposit per year | 46:8-21.2 |
| Where it is held | Interest-bearing account at an insured NJ bank or savings institution; landlords with 10 or more units must use an insured NJ money market fund or a variable-rate account | 46:8-19(a), (b) |
| Written bank notice | Within 30 days of receiving your deposit | 46:8-19(c) |
| Return after lease ends | 30 days, with interest and itemized deductions | 46:8-21.1 |
| Fire, flood, condemnation, or evacuation | Available within 5 business days, on your demand | 46:8-21.1 |
| Domestic violence lease ending | Available within 15 business days | 46:8-21.1 |
| Penalty if you win in court | Double the amount owed, plus full costs; attorney’s fees at the court’s discretion | 46:8-21.1 |
| Small claims limit | Up to $5,000, including penalties, not counting costs | 46:8-21.4 |
| Diverting deposit money | Disorderly person; fine of at least $200, up to 30 days in jail, or both | 46:8-25 |
Who NJ Security Deposit Act Covers (and Who It Does Not)
Under 46:8-26, the NJ Security Deposit Act covers all rental premises or units used as homes. In most cases, that means your apartment or rented house is covered.
There is one main exception: an owner-occupied building with two or fewer rental units. For example, you might rent the top floor of a two-family home where the owner lives downstairs. However, you can still get the law’s protection. Just give your landlord 30 days’ written notice that you want it. The state bulletin says you can send this notice at any time during your tenancy. After that, the NJ Security Deposit Act applies to you.
Seasonal rentals are treated a little differently. A seasonal rental is 125 consecutive days or less, rented by someone with a permanent home elsewhere. For these, the bank-account rules do not apply. However, the landlord must prove the rental is seasonal. Housing for seasonal, temporary, or migrant farm workers does not count as seasonal. Local rules vary by town, so ask your municipal office or legal aid about local ordinances.
What Your Landlord Must Do Under This Law
The NJ Security Deposit Act gives your landlord a clear to-do list. First, the money goes into an interest-bearing account at an insured New Jersey bank or savings institution. Next, within 30 days, the landlord must tell you in writing:
- The name and address of the bank or fund
- The type of account
- The current interest rate
- The amount deposited
The bulletin says this notice can be in your lease. A new notice is due with each yearly interest payment. Another is due within 30 days after the deposit moves or the building changes owners. Interest is paid in cash or credited to your rent. That happens on your lease anniversary, or on January 31 if you were told in writing.
Deductions have limits. The bulletin says landlords may deduct for damage beyond ordinary wear and tear. They may also deduct money you owe under the lease. However, nothing can be deducted while you still live there. If the building is sold, the old owner must turn over your deposit within 5 days. The old owner must also tell you by registered or certified mail. Either way, the new owner must return it under the NJ Security Deposit Act.
What You Can Do When It Is Broken
Did your landlord skip the 30-day bank notice? Under the NJ Security Deposit Act, you can then act. Tell the landlord in writing to apply your deposit, plus 7% interest per year, toward rent. After that, the landlord cannot demand another deposit while you live there. The bulletin says to send it certified or registered mail, return receipt requested. If only the yearly interest or notice was missed, you must first give the landlord 30 days to fix it.
Typically, it is smart to talk with legal aid before using this remedy.
If your deposit is not returned within 30 days, you can sue. If the court rules for you, it must award double the amount owed. It must also award full court costs. It may add reasonable attorney’s fees. As a result, the NJ Security Deposit Act gives landlords a strong reason to settle fairly.
Claims up to $5,000, including penalties but not costs, go to Small Claims in the Superior Court, Special Civil Part. File in the county where the rental is, or where the landlord lives. The bulletin says larger claims go to the Special Civil Part. Confirm current filing limits and fees with the New Jersey Courts. If you get rental assistance, 46:8-21.5 says you do not have to sue to keep your benefits.
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The state can also fine a landlord $500 to $2,000 per offense for willfully keeping those deposits. Facing eviction too? Contact a local legal-aid office or a tenant attorney right away.
Frequently Asked Questions
My landlord kept part of my deposit. Is that allowed?
Sometimes. Under the NJ Security Deposit Act, deductions must follow your lease and be itemized in writing. The state bulletin says ordinary wear and tear cannot be charged, so ask for proof of any damage claim.
Can my landlord raise my deposit when I renew?
Yes, but only a little. The NJ Security Deposit Act limits yearly increases to 10% of the current deposit. The total still cannot go above 1.5 times one month’s rent.
What interest rate will I get?
The law does not set one fixed rate. You get whatever the account earns, and your landlord must list the current rate in your written notice. Check that notice, or ask the landlord for it in writing.
Protect your stuff while you sort this out
A landlord’s insurance does not cover your belongings — renters insurance does, often for a few dollars a month. Compare options before your next move.
Find Your State’s Exact Rules
Notice periods, deposit caps, and the eviction timeline all change from state to state. Pick your state to see the exact days, dollar limits, and steps that apply where you live.
See Tenant Rights in All 50 States →
Sources & How to Verify
The rules on this page are drawn from official government and legal-aid sources. Tenant law changes, so always confirm the exact rule with your state’s statute or a local legal-aid office.
- HUD: hud.gov — federal renter protections and fair housing
- Legal Services Corporation: lsc.gov — find free legal aid in your state
- Cornell Legal Information Institute: law.cornell.edu/wex — plain-English legal definitions
- Your state statute & court self-help portal: search “[your state] landlord tenant act” and “[your state] court self-help eviction” for the exact law and forms
Content last reviewed September 2026. If you notice outdated information, please contact us.
New Jersey Renter Guides
- New Jersey Eviction Process
- New Jersey Tenant Rights
- New Jersey Security Deposit Law
- New Jersey Rent Increase Laws
- New Jersey Repairs and Habitability
- Breaking a Lease in New Jersey
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Informational only — not legal advice. Tenant Rights Info is an independent educational resource, not a law firm, and this page does not provide legal advice. Landlord-tenant law varies by state and city and changes over time, so always verify the exact rule with your state’s statute, your local court’s self-help portal, or a legal-aid office. For urgent situations like an active eviction, contact a local legal-aid office or a licensed tenant attorney in your state right away.