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Chen v. Greenway Village Apartments

A-4886-03T2 (N.J. Super. App. Div. 2005) (Unpublished)

LANDLORD-TENANT; SECURITY DEPOSITS—The revision to New Jersey’s residential security deposit law that took effect on January 1, 2004 making a successor landlord liable for security deposits paid to its predecessor is not to be applied retroactively to transfers before 2004.

Originally, N.J.S.A. 46:A-21 made a successor apartment owner liable for an existing tenant’s security deposit only if the money had been turned over by the prior landlord. In 2003, with an effective date of January 1, 2004, the Legislature amended that statute to “impose upon the new landlord the obligation to obtain the security deposits from the prior landlord or seller.” In this case, the tenant signed a lease on October 20, 2000 and paid a security deposit to the then owner. The property was sold in June 2002 and no security deposit was transferred to the new owner. The tenant signed a new lease on October 1, 2002. The new lease did not call for a security deposit. When the tenant moved at the expiration of the second lease, it sought return of its original security deposit. The new owner refused to make the payment.

The lower court ruled that the new owner was liable for return of the original security deposit. The Appellate Division disagreed, holding that the amendment was not to be applied retroactively. It held that the Legislature neither expressly nor impliedly authorized its retroactive application. It also held that the statute was neither ameliorative or curative because it reflected a new policy, not an attempt to clarify current law. Further, it held that the tenant could not have had the expectation that its landlord and prior landlord expected that the amended statute would have retroactive application.


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