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Brown v. Mosaid

A-5954-06T3 (N.J. Super. App. Div. 2008) (Unpublished)

LEASES; SECURITY DEPOSITS — Where a prospective lease requires a landlord to comply with the New Jersey Rent Tenant Security Deposit Act, and a landlord places the security deposit in his personal account, rather than a designated account, the prospective tenant may repudiate the lease.

A residential landlord negotiated a lease with a husband and wife. The couple believed that the lease would begin by a date certain to accommodate their needs. In actuality, the landlord had to bring eviction proceedings against the existing tenant. The couple posted a security deposit with the understanding that it would be placed in an escrow account. Instead, actually the landlord deposited it in his own personal account because of his fear that if the check bounced it would return to the couple’s old address and the landlord would not find out. The couple never gained entry to the apartment, and sued to recover the security deposit.

The lower court found that neither party acted with malice. There was never a meeting of the minds concerning the importance of placing money in an escrow account. Thus, it held that the lease was null and void. It ruled that the tenants were entitled to the return of the rent, security deposit, and costs.

The Appellate Division affirmed the lower court result, but added that the prospective lease required the landlord to comply with the New Jersey Rent Tenant Security Deposit Act. Posting the security deposit in his personal account, rather than a designated account, justified the couple’s repudiation of the lease.


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