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Alba v. Sopher

296 N.J. Super. 501, 687 A.2d 309 (App. Div. 1997)

LEASES; SECURITY DEPOSITS; DAMAGES—A landlord learns that its failure to properly mitigate its damages in a residential lease termination requires it to return its tenant’s security deposit plus a multiple thereof and attorneys’ fees.

Plaintiff entered into a one year sublease of a cooperative apartment at $1,025.00 per month beginning December 1, 1994. As a result of losing her job three months later, subtenant notified her landlord that she was breaking the lease and would vacate the apartment by March 27, 1995. The landlord re-rented the apartment as of May 15, 1995 to a third party for $1,095.00 per month and refused to return the subtenant’s security deposit. The Special Civil Part awarded the subtenant $7,288.25, representing double the net security deposit plus costs and attorney’s fees. The landlord was unable to recoup the $512.50 lost as a result of the co-op’s vacancy from April 28 through May 15, 1995 and appealed.

The Superior Court determined that the landlord suffered no loss of rental, and the decision to raise the rent terminated the landlord’s obligations under the lease. The landlord attempted to demonstrate a conflict between two fee award statutes and claimed that the amount of the award to tenant should be lowered in accordance with N.J.S.A. 22A:2-42. It also cited Thomas v. Saijwani, 249 N.J. Super. 158 (App. Div. 1991), as precedent limiting the amount of fees that may be awarded. However, the Court held that when two statutes appear to conflict, the more specific will take precedence over the more general. In this case, the specific security deposit penalty statute, N.J.S.A. 46:8-21.1, controls.

By virtue of increasing the rent, and not because it attempted to mitigate by finding a new tenant, the landlord terminated the lease, absolved its subtenant of any obligations under the lease, and was unable to keep the security deposit. This case clearly demonstrates the costly consequences of failure to return a security deposit. In addition to double the amount of the deposit, the Court also allowed the subtenant to collect attorney’s fees and costs of over $4,000.00.


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