On April 24, 2020, Governor Murphy signed Executive Order 128-2020, which allows tenants to|
direct their landlords to use a portion or all of the previously paid security deposit to satisfy rent.
“Upon written request from a tenant, including electronic communication, a security deposit
governed by the provisions of N.J.S.A. 46:8-19 et seq., as well as the tenant’s portion of the
interest and/or earning accumulated thereon, shall be applied to or credited towards rent
payments due or to become due from the tenant[.]” Executive Order 128-2020. Tenants who
choose to direct their landlords to use the security deposit for rent will not be required to
replenish any or all the security deposit. “The tenant shall otherwise be without obligation to
make any further security deposit relating to the current contract, lease, or
license agreement[.]” Executive Order 128-2020.
Prior to Executive Order 128-2020, security deposits were held by landlords as a security
for performance of the lease agreement. Security deposits for dwelling rental units,
could not exceed one and one half time one month’s rent. Traditionally, at the end
of a lease term, security deposits were either used by landlords to pay for items
detailed in the original lease (i.e. damage to the property) or returned to the tenant.
Executive Order 128-2020 has the potential to create numerous pitfalls on an already
rocky and steep path. CLDDS attorneys are available to help you navigate the scope
and impacts of Executive Orders 106 and 128 as well as any other legal issues or
questions you may have has a landlord or tenant.
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