Parkside Manor Associates v. Bowen

A-6667-96T2 (N.J. Super. App. Div. l998) (Unpublished)
  • Opinion Date: June 24, 1998

LEASES; SECURITY DEPOSITS—The residential security deposit law requires that the notice to tenant recite the amount of deposit. Consequently, when the security is paid in installments, a separate notice must be given each time.

Residential leasing security deposit law requires landlords to “notify in writing each of the persons making such security deposit or advance, give the name and address of the ... bank ... in which the deposit ... of security money is made, and the amount of such deposit ... .” In this case, the landlord and tenant agreed that the tenant could pay the security deposit in six equal monthly installments. An executed copy of the lease provided to the tenant stated that the security deposit was the amount of the first installment and gave the address of the bank in which the security deposit had been deposited. Subsequently, the tenant made two additional payments toward the security deposit, but received no notice regarding the investment of those additional funds. The tenant, believing this to be a violation of the statute, exercised its right to require the landlord to apply the security deposit in its possession towards rent. Although the lower court held that the landlord was not required to give a new notice each time it received an installment of security deposit, the Appellate Division was persuaded otherwise. Even though the lease identified the bank, the law requires that the notice received by the tenant recite “the amount of such deposit.” The lease only described the initial deposit payment. Although, that description was correct at the time it was made, it became incorrect with each installment payment. Consequently, the landlord was found to have violated the statute, though inadvertently. The landlord was entitled to retain the initial deposit as security but was required to apply the later installments against the tenant’s rent.