Landlords Need to Know the Risk in Retaining a Security Deposit
Whether you’re a new landlord or a seasoned one, it’s something you need to know. Retaining a security deposit comes with its share of risks. In the end, it’s something that could cause more problems than its worth.
Without question, renting property to tenants comes with its share of challenges. In some cases, problems arise because of a landlord’s personal pride in the rental property.
A quick survey of residential properties in Elizabeth alone shows nearly two hundred available for rent on a daily basis. They range from single family homes to large apartment complexes.
In some cases, the large corporations own the leased premises. However, a great number of tenants pay rent to individuals who purchased multi-family houses for investment purposes.
Unfamiliarity with the laws regarding refunding security deposits causes many problems. As a landlord, you may be easily frustrated. After all, you offered the premises for rent in pristine condition. What you find when a lease ends could shock you.
According to NJSA 46:8-21.1, New Jersey law requires you to return the security deposit within 30 days after the tenant’s lease end. And, Meanwhile, your decision to hold on to a security deposit calls for justification.
Consider consultation with an experienced landlord-tenant lawyer as far as the validity of holding on to a security deposit. Problems arise when the court disagrees with your decision to hold on to security deposit. The judge could order you to pay back double to security amount.
Security Deposit at Issue
Last month, the New Jersey Appellate Division considered a matter regarding a security deposit. In the case of Pezeshki v. Rowell, the landlord sued his former tenants for damages to the rental property he owned.
Hadi Pezeshki offered the court twenty examples of the damages done to his premises. Additionally, he provided the judge with photographs to back up his claims.
Meanwhile, the tenants Corey C. Rowell and Shamara Miller disputed their former landlord’s assertions. They presented a video and photographs taken during the final “walk-through” when they vacated the property.
After considering the evidence, the court awarded the landlord only twenty-five percent of his damage claim. The balance of the allegations appeared related to normal wear and tear. Landlords may not collect money or hold on to security deposits for wear and tear.
Here’s the part that likely surprised the landlord, who represented himself in court. It turns out he held off on refunding the tenant’s security deposit beyond the requisite thirty days.
In deciding the case, the judge first looked at the amount the landlord retained. From that number, she subtracted the damages she awarded to the property owner.
According to the court’s calculations, this left a remainder of $810.84 of money due back to the tenants. However, the security wasn’t returned within time. Therefore, the judge ordered the landlord to pay the tenants $1621.68.
As you can see, the landlord took a risk by holding onto the security deposit. The judgment entered against him was more than he had from the tenants in the first place.
The appeal of the case questioned procedural issues that the Appellate Division found without sufficient merit.
As a landlord, you need to know when it’s proper to hold onto a security deposit. Contact the Law Offices of Lawrence Centanni to learn more. We are happy to assist you.