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Rehnborg v. Queen Anne, Inc.

A-4320-03T5 (N.J. Super. App. Div. 2004) (Unpublished)

LANDLORD-TENANT; SECURITY DEPOSITS—It is mandatory that a court double any part of a residential security deposit that a landlord is not allowed to keep to the extent the landlord does not return that money within thirty days.

A landlord returned a residential tenant’s security deposit about ninety days after the tenant’s lease ended. From the original deposit, it made deductions for damages, but failed to include interest that had been earned on the security deposit. The tenant sued, challenging its landlord’s calculation of the returned security deposit, seeking double damages and the cost of suit. The lower court upheld part of the landlord’s deduction and then calculated that the only amounts wrongfully withheld were the forgotten interest, an invalid damage deduction, and a small calculation error. The lower court then “doubled only [the] amounts it found to have been wrongfully withheld,” awarding the tenant that amount plus interest. The tenant appealed and the Appellate Division held that the lower court did not understand the consequences of a landlord’s failure to return a security deposit within the statutory thirty-day period. “Once any portion of the owed security deposit is not returned within a thirty-day period, it is ‘wrongfully withheld.’” The Legislature provided a “mandatory remedy for default,” i.e., a doubling of any part of the security deposit that a landlord is not allowed to keep to the extent the landlord does not return that money within thirty days. The remedy “is to encourage landlords to return tenants’ security deposits promptly and to discourage landlords from overreaching and defrauding tenants ‘by diverting rent security deposits to their own use.’”


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