New Jersey Security Deposit Law

Maximum deposit

Landlords may not collect a security deposit above one and one-half months' rent, and any yearly increase may not exceed 10% of the current deposit (N.J.S.A. 46:8-21.2). (N.J.S.A. 46:8-21.2, NJ DCA, Truth in Renting (rev. Aug. 2025), p. 12, citing N.J.S.A. 46:8-21.2 and 46:8-26, N.J.S.A. 46:8-26)

One and one-half months' rent; any annual increase limited to 10% of the current deposit

Return deadline

Landlords must return the deposit plus interest, less itemized deductions, by personal delivery or registered or certified mail within 30 days after the tenancy ends (N.J.S.A. 46:8-21.1). (N.J.S.A. 46:8-21.1, NJ DCA, Truth in Renting (rev. Aug. 2025), pp. 13–14, citing N.J.S.A. 46:8-21.1)

Itemized statement of deductions

Landlords who make deductions must send an itemized list of them by registered or certified mail within 30 days after the tenancy ends (N.J.S.A. 46:8-21.1). (N.J.S.A. 46:8-21.1, NJ DCA, Truth in Renting (rev. Aug. 2025), p. 14)

Interest on the deposit

Landlords must keep deposits in an interest-bearing New Jersey account and pay or credit the interest to the tenant every year (N.J.S.A. 46:8-19). (N.J.S.A. 46:8-19, NJ DCA, Truth in Renting (rev. Aug. 2025), p. 13, citing N.J.S.A. 46:8-19 and 46:8-19.1)

Deposit must be held in an interest-bearing account at an insured bank, savings bank or S&L located in New Jersey (landlords with 10 or more rental units must use an insured NJ money market fund or a bank account paying a comparable variable money-market rate); interest belongs to the tenant and is paid or credited annually on the lease anniversary or Jan. 31; written notice of the institution, account type, rate and amount within 30 days of receipt and at each annual payment. Seasonal rentals (125 days or less) excepted.

Penalty for wrongful withholding

A court that finds for the tenant in a deposit-return action must award double the amount due plus full costs, and may also award reasonable attorney fees (N.J.S.A. 46:8-21.1). (N.J.S.A. 46:8-21.1, NJ DCA, Truth in Renting (rev. Aug. 2025), p. 14)

Where the deposit is held

New Jersey deposits are trust funds that may not be commingled with the landlord's property and must sit in an insured, interest-bearing account at a bank or savings institution in New Jersey, or for larger landlords an insured New Jersey money market fund (N.J.S.A. 46:8-19(a)-(b)). (N.J.S.A. 46:8-19, NJ DCA, Truth in Renting)

Landlords with 10 or more units use the variable-rate money market or bank option in 46:8-19(a); smaller landlords use a regular interest-bearing New Jersey bank account under 46:8-19(b). Unlawfully diverting deposit funds is a disorderly persons offense (46:8-25).

Receipt or written notice of the deposit

Within 30 days of receiving a deposit, a New Jersey landlord must tell the tenant in writing the name and address of the bank or fund, the account type, the current interest rate and the amount deposited (N.J.S.A. 46:8-19(c)). (N.J.S.A. 46:8-19, NJ DCA, Truth in Renting)

The same notice is due at each annual interest payment, within 30 days of moving the deposit or a sale of the property. If the landlord fails to give it, the tenant may notify the landlord and apply the deposit plus 7% annual interest to rent, and no further deposit can be demanded.

Move-in condition checklist

New Jersey's Security Deposit Law does not require a move-in inspection or condition checklist (N.J.S.A. 46:8-19 to -26). (N.J.S.A. 46:8-19 to 46:8-26)

Pet deposits

A New Jersey pet deposit counts toward the deposit cap, so the regular and pet deposits together may not exceed one and one-half months' rent, and a disabled tenant cannot be charged extra for a service or guide dog (N.J.S.A. 46:8-21.2; 10:5-29.2). (N.J.S.A. 46:8-21.2, N.J.S.A. 10:5-29.2, NJ DCA, Truth in Renting)

The tenant with a service or guide dog (including a retired one kept as a pet) remains liable for damage it causes. Pet rules for senior-citizen housing projects appear separately in N.J.S.A. 2A:42-103 et seq.

Nonrefundable fees

Since May 1, 2026, a New Jersey landlord or agent may not charge more than $50 to apply for a residential lease, except for units in one- or two-family homes, and any prepaid sum held as security counts toward the deposit cap no matter what it is called (N.J.S.A. 46:8-18.1; 46:8-21.2). (N.J.S.A. 46:8-18.1, P.L.2025, c.405 (A4899), NJ DCA, Truth in Renting)

Overcharges carry penalties of up to $500, $750 and $1,000 for first, second and later offenses, with the excess refunded to the applicant; the $50 cap is CPI-adjusted from Jan. 1, 2027. Real-estate licensees who are not the landlord are also exempt.

Small-landlord exemptions

Owner-occupied New Jersey buildings with no more than two rental units are exempt from the Security Deposit Law unless the tenant sends the landlord 30 days' written notice invoking it (N.J.S.A. 46:8-26). (N.J.S.A. 46:8-26, N.J.S.A. 46:8-19)

Separately, landlords holding deposits for fewer than 10 units may use an ordinary interest-bearing New Jersey bank account rather than the money-market-rate account (46:8-19(a)-(b)), and the new $50 application-fee cap does not apply to one- and two-family dwellings (46:8-18.1(c)).

Deposit alternatives and installments

New Jersey has no statute regulating deposit-alternative products, surety bonds or installment payment of a security deposit (N.J.S.A. 46:8-19 to -26). (N.J.S.A. 46:8-19 to 46:8-26)