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Jersey City Housing Authority v. Jackson

A-6406-01T5 (N.J. Super. App. Div. 2003) (Unpublished)

LANDLORD-TENANT; SECURITY DEPOSITS—Even though a bank mistakenly allows a tenant to withdraw funds from the segregated security deposit account maintained for the tenant by its landlord, failure to replenish that account is grounds for eviction.

A public housing tenant maintained a bank account at the same bank in which the housing authority maintained its security deposit account. One day, the tenant appeared at the bank to make a withdrawal from her checking account. Because of a bank mix up, the teller mistakenly allowed a withdrawal from the housing authority’s security deposit savings account that was held in the name of the tenant. The tenant made three more withdrawals from the account and did not have sufficient funds in her own account to cover the withdrawals. The lower court concluded that the tenant knew what she was doing. When the bank discovered the error, it entered into an agreement with the tenant to repay the money. The tenant did not repay the money and, as a result, the housing authority sent the tenant a “Notice to Cease,” alleging a violation of the lease between them because the tenant had withdrawn “the security deposit from the landlord’s bank account.” The tenant was given thirty days to restore all of the money, but the money was not restored. A Notice Terminating the Lease was sent and a judgment in possession was eventually entered against the tenant. The Appellate Division thought the result to be appropriate.

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