Case Law Summaries

Yi v. Re/Max Fortune Properties, Inc.

• Opinion Date: April 11, 2001
• Real Property Law
• E-Mail

LEASES; SECURITY DEPOSITS—There is no de minimis exception to the requirement that a residential landlord return its tenant’s unused security deposit within 30 days.

A New Jersey statute requires that a landlord, within thirty days after the termination of a residential tenancy, return its tenant’s deposit, including the tenant’s portion of the interest accrued thereon, less valid charges. The law also provides that upon failure to do so, the unpaid amount be doubled and the tenant be awarded litigation costs together with reasonable attorney’s fees. The lower court found that a tenant was not entitled to the prescribed doubling, but awarded attorney’s fees and costs of suit to the tenant. In this particular case, it was undisputed that the landlord failed to return a small sum of money to which the tenant was entitled. What happened, however, that was before the suit was instituted, the landlord paid the disputed sum to its tenant only five days after the deadline for returning the balance. The lower court reasoned that the five day delay was de minimis, but because the payment had not been made until the tenant’s attorney had sent a demand letter, attorney’s fees were justified. In fact, the parties themselves had engaged in some negotiations before the tenant’s attorney became involved. The Appellate Division noted that courts are empowered to apply equitable considerations and decide disputes before them, but also noted that such equities may not trump the law. According to the Court, the statute that establishes a landlord’s obligations is written “in unmistakable and definite terms, and clearly provides a mandatory remedy for default.” Consequently, the Appellate Division held that the lower court should have ordered a doubling of the deficiency, even though it was paid to the tenant within only a short period of time after the mandatory 30-day period. Further, in its remand to the lower court to calculate the revised damages, it also directed the lower court to determine what counsel fees, if any, should be awarded to the tenant for prosecution of the appeal.

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