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New Executive Order Allows Renters to Use Security Deposit as Rent

TRENTON, NJ – There’s good news for renters during Governor Phil Murphy’s COVID-19 shutdown,  renters can work with their landlords to use their security deposit as a rent payment while the state is essentially out of business.

 To provide additional options to tenants who are struggling financially as result of COVID-19, Governor Phil Murphy today signed Executive Order No. 128, allowing tenants to direct their landlords to use their security deposits to offset rent or back rent.

“We recognize the anxiety that so many are feeling about looming rent payments, and during this emergency renters should have the ability to utilize their security deposit to help them stay in their place of residence,” said Governor Murphy. “While this action does not resolve the broader financial concerns of New Jerseyans, this will provide critical short-term support as the first of the month approaches. My Administration will continue working with the housing community and federal government to develop long-term solutions to this crisis.”

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Governor Murphy’s executive order waives provisions of statutory law that prohibit the use of security deposits for rental payments, enabling tenants to instruct landlords to use their security deposits to offset rent or back rent. Tenants will not be obligated to make any further security deposit relating to their current lease agreement but would still be responsible for any monies landlords expend that would have been reimbursable via the security deposit as outlined in the original contract (i.e. damage to the property).  However, should the tenant and landlord extend or renew their lease, then the tenant would be obligated to replenish the security deposit in full either six months following the end of the Public Health Emergency established by Executive Order No. 103 (2020), or on the date on which the current lease agreement is extended or renewed, whichever is later.

The order will take effect immediately and will be in place until 60 days after the public health emergency is terminated.

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Governor Murphy also announced that the Department of Community Affairs has established a rental housing information page and question portal as a single point of reference for tenants and landlords seeking information about their rights during the public health emergency.

In addition, a standing information page has been added to the State’s COVID-19 website for homeowners interested in taking advantage of the previously announced mortgage forbearance agreement with private lenders. Homeowners with questions or concerns related to conditions of an agreement with their mortgage lender will be directed to the Department of Banking and Insurance’s intake form for further assistance.

Photo by David Hellmann on Unsplash

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