Security deposit refund : Lawsuit
Member since 2019 · 9 posts · 2 votes
Security deposit refund : Lawsuit
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Investor · San Diego · Member since 2020 · 92 posts · 60 votes
1mo@Mike Savage @Bill B. and @Richard F. are right that a local attorney is the first move, @Drew Sygit posted the NJ statute links, and @Shawn Mcenteer is right that the dollar amount changes the calculus. All of that is worth sitting with before you do anything else. I want to take the two tactical questions you actually asked, because I think both of your instincts are working against you here.
On counter suing for damage you found later. The problem is not only that it likely fails, it is that it damages the case you already have. Your defense is that your deductions were legitimate and documented at the time. The moment you introduce damages you discovered after you sent the itemization, you have told the judge your original accounting was incomplete, which is the plaintiff's exact argument. You would be corroborating him. Whatever those extra items are worth is almost certainly less than the credibility it costs.
On the online post about relatives staying there. Unauthorized occupants is a lease enforcement issue and the moment to raise it was while it was happening. Introducing it now reads as searching for a justification after the fact, and judges in deposit cases are already primed to watch for that. It also does not attach to any particular deduction. If a specific item of damage is plausibly caused by extra occupancy, then the damage is the argument and the occupancy is just context.
What is worth your energy instead: you are facing two different challenges and they have different defenses. Grouping the deductions is a form problem. Inflated estimates is a substance problem. Some jurisdictions treat a defective itemization as forfeiting the deduction regardless of whether the damage was real, and that is the part that should worry you most, and the part a NJ attorney can answer in one phone call. The inflated estimates piece you can win on paper if what you charged matches what you paid. Bill put that exactly right. Pull every invoice and lay the amount charged next to the amount actually paid, line by line, on a single page. If those two columns match, that charge collapses on its own.
I would also separate out the wear and tear items yourself before the hearing rather than defending the entire list. Conceding two items you privately know are marginal makes the remaining list read as disciplined rather than padded, and it costs you almost nothing.
For counsel, the NJ State Bar runs a lawyer referral service by county, and a Hudson County landlord tenant attorney will have seen this fact pattern many times over. I am not a lawyer and NJ deposit penalties are unforgiving, so please treat none of the above as a substitute for that call.
How much is actually in dispute, and did you do a documented move in walkthrough with photos? The amount decides whether this is worth fighting at all, but the move in documentation is what decides whether you have a defense.
8 Replies
- Investor · Las Vegas, NV · Member since 2013 · 8k+ posts · 10k+ votes1mo
You need a local lawyer. You probably can’t add anything to the security deposit deductions. It might be illegal, it might cause you to lose instantly, or it just might not be allowed. Don’t sue the idiot that didn’t know you couldn’t group deductions. They are either out of state or inexperienced.
If you gave real estimates and paid the actual amounts in the estimates you will win the inflated estimates charge. If you paid less than you’re pretty much guilty of that charge.
Go with your lawyer and bring EVERY piece of paperwork/proof you have. You might want to find out if you’re only going to lose the entire security deposit or if in your jurisdiction you have to pay double or triple the security deposit.
You might also want to find out if Tennants get free legal representation in your market. If so you’re probably in trouble and want to switch PMs. This is a self-inflicted loss. Good luck.
- Honolulu, HI · Member since 2008 · 3k+ posts · 2k+ votes1mo
It's just not that difficult to look up the critical landlord/tenant laws for your locale before you ever rent a place out so you know what rules need to be followed. You can be liable for up to double the actual deposit. Failing to properly document move in AND move out, and not having proper, itemized actual invoices from a third party, in addition to charging for what courts consider "normal wear and tear" are simple procedures, but you must start at the beginning... I doubt you have ANY "recourse" at this point. Trying to "find" additional damages after the fact will not go over well with any Judge. It does not matter if there were additional occupants staying in the unit, that is a separate issue that needed to be addressed at the time. It has no bearing on the SD.
- 1moShawn McenteerBusiness MemberRealtor · Boonton Township, NJ · Member since 2013 · 2k+ posts · 1k+ votes
@Mike Savage how much money are we talking about? Might not be worth the fight if small amount. If you have it well documented with 3rd party contractor giving itemized breakdown of work being done and this work is clearly cause by tenants outside of normal wear and tear you might have a case to defend yourself. Your lease terms play big part in this.
House Hacking New Jersey563 Reviews - 1moDrew SygitBusiness MemberProperty Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes
Quote from @Mike Savage:
I made the deductions from a security deposit recently and got sued.
Reason being cited: failed to itemize deductions by grouping deductions, including wear and tear items, using inflated estimates.
I have the receipts.
what should be my recourse?
I can think of counter suing for more items i found damaged(offense is the best defense strategy), OR
i have some weird online post by my tenant that says they had few long term relatives staying with them - can i use it OR
simply being on courtLocation: Hudson county, NJ
Thanks for the help as always.Can only base this upon our experience in Michigan:
Were you sued in Small Claims Court?
- If so, you can represent yourself IF property deed in your name, otherwise check with an attorney.If you followed state & local laws, it just a matter of judge interpretation of whatever documentation you both submit.
- If you didn't follow all legal requirements, you may be subject to double or treble damages.You mentioned "wear & tear".
- Most states do NOT allow SD deductions for this.A quick Google search turned up the following, which hopefully you were aware of already:
https://www.nj.gov/dca/codes/publications/pdf_lti/secty_depo...
https://www.njcourts.gov/faq/what-happens-residential-securi...
Logical Property Management4.9451 Reviews - Investor · San Diego · Member since 2020 · 92 posts · 60 votes1mo
@Mike Savage @Bill B. and @Richard F. are right that a local attorney is the first move, @Drew Sygit posted the NJ statute links, and @Shawn Mcenteer is right that the dollar amount changes the calculus. All of that is worth sitting with before you do anything else. I want to take the two tactical questions you actually asked, because I think both of your instincts are working against you here.
On counter suing for damage you found later. The problem is not only that it likely fails, it is that it damages the case you already have. Your defense is that your deductions were legitimate and documented at the time. The moment you introduce damages you discovered after you sent the itemization, you have told the judge your original accounting was incomplete, which is the plaintiff's exact argument. You would be corroborating him. Whatever those extra items are worth is almost certainly less than the credibility it costs.
On the online post about relatives staying there. Unauthorized occupants is a lease enforcement issue and the moment to raise it was while it was happening. Introducing it now reads as searching for a justification after the fact, and judges in deposit cases are already primed to watch for that. It also does not attach to any particular deduction. If a specific item of damage is plausibly caused by extra occupancy, then the damage is the argument and the occupancy is just context.
What is worth your energy instead: you are facing two different challenges and they have different defenses. Grouping the deductions is a form problem. Inflated estimates is a substance problem. Some jurisdictions treat a defective itemization as forfeiting the deduction regardless of whether the damage was real, and that is the part that should worry you most, and the part a NJ attorney can answer in one phone call. The inflated estimates piece you can win on paper if what you charged matches what you paid. Bill put that exactly right. Pull every invoice and lay the amount charged next to the amount actually paid, line by line, on a single page. If those two columns match, that charge collapses on its own.
I would also separate out the wear and tear items yourself before the hearing rather than defending the entire list. Conceding two items you privately know are marginal makes the remaining list read as disciplined rather than padded, and it costs you almost nothing.
For counsel, the NJ State Bar runs a lawyer referral service by county, and a Hudson County landlord tenant attorney will have seen this fact pattern many times over. I am not a lawyer and NJ deposit penalties are unforgiving, so please treat none of the above as a substitute for that call.
How much is actually in dispute, and did you do a documented move in walkthrough with photos? The amount decides whether this is worth fighting at all, but the move in documentation is what decides whether you have a defense.
- 1moJimmy LieuBusiness MemberReal Estate Agent · Columbus, OH · Member since 2019 · 3k+ posts · 2k+ votesIf you have the receipts and can show the deductions were for actual damage beyond normal wear and tear, I'd focus on defending the deductions you already made rather than trying to "counterattack." In court, judges generally care more about whether you followed your state's security deposit rules than whether you later found additional damage. If you didn't provide the required itemized list or missed a statutory deadline, even legitimate damages can become harder to recover. As for the tenant's social media posts about long-term guests, that may only be relevant if it ties directly to lease violations or the damages you're claiming. I'd organize your timeline, move-in/move-out photos, inspection notes, receipts, invoices, and a copy of the itemized deductions you sent. If the amount is significant, it's probably worth talking with a local landlord-tenant attorney before the hearing since New Jersey tends to have fairly strict tenant protections.
Quote from @Mike Savage:
I made the deductions from a security deposit recently and got sued.
Reason being cited: failed to itemize deductions by grouping deductions, including wear and tear items, using inflated estimates.
I have the receipts.
what should be my recourse?
I can think of counter suing for more items i found damaged(offense is the best defense strategy), OR
i have some weird online post by my tenant that says they had few long term relatives staying with them - can i use it OR
simply being on courtLocation: Hudson county, NJ
Thanks for the help as always.
Jimmy Lieu, Red 1 Realty4.9120 Reviews - Member since 2026 · 72 posts · 30 votes1mo
Quote from @Mike Savage:
I made the deductions from a security deposit recently and got sued.
Reason being cited: failed to itemize deductions by grouping deductions, including wear and tear items, using inflated estimates.
I have the receipts.
what should be my recourse?
I can think of counter suing for more items i found damaged(offense is the best defense strategy), OR
i have some weird online post by my tenant that says they had few long term relatives staying with them - can i use it OR
simply being on courtLocation: Hudson county, NJ
Thanks for the help as always.Security deposit disputes in Hudson County should be taken very seriously. The courts there are generally known for taking a tenant-friendly approach, so it's important to make sure your deductions are fully supported.
Items considered standard wear and tear—such as minor nail holes or other small imperfections are often not considered deductible. If you made deductions from the security deposit, you should have clear documentation to support them, including dated photos or videos, receipts for materials, invoices, and proof of payment.
Under New Jersey law, if you completed the repairs yourself, you generally cannot charge the tenant for your own labor. However, if you hired a licensed contractor or cleaning company, those costs may be deductible, provided you have invoices and proof of payment.
Keep in mind that even if you believe your deductions were justified, the legal costs of defending a security deposit lawsuit can quickly exceed the amount in dispute. If the documentation supporting your deductions is incomplete, it may be worth considering whether offering to return the full security deposit in exchange for the former tenant dismissing the case is a practical resolution.
If the court determines that a landlord wrongfully withheld a security deposit in violation of New Jersey law, there may be significant financial consequences, including the possibility of enhanced damages in certain circumstances. Because the outcome depends on the specific facts and the applicable law, it's wise to consult an attorney before deciding how to proceed.
Going forward, if you own rental property and are unfamiliar with New Jersey's landlord-tenant laws, you may want to consider hiring an experienced property manager. Proper documentation, compliance with the law, and consistent recordkeeping can help prevent costly disputes.
If you have thorough documentation, including photos, receipts, invoices, and proof that the deductions accurately reflect the actual repair costs; you may have a stronger position to defend your actions. Depending on the outcome of the case and the specific circumstances, you may also have other legal remedies available. An attorney who practices landlord-tenant law in New Jersey can advise you on whether pursuing those options would be worthwhile.
This version is firm without being confrontational and avoids making categorical legal claims where outcomes can depend on the specific facts and the court.
If you need a referral to a good landlord-tenant attorney, let me know. Happy to recommend a couple. - 1moVictor PatelBusiness MemberReal Estate Broker · Cincinnati, OH · Member since 2022 · 133 posts · 89 votes
If you have been sued, I would stop thinking about how to "counterattack" and start thinking about how to defend your original deductions.
A few thoughts:
- The fact that you have receipts is helpful, but the court will also look at whether you complied with New Jersey's security deposit laws, including providing a timely and properly itemized list of deductions.
- Normal wear and tear cannot be charged to the tenant. Even if you spent money fixing something, that doesn't automatically make it deductible.
- I wouldn't rely on an unrelated social media post about relatives staying there unless it directly proves a lease violation or explains the specific damage you're claiming. Otherwise, it's likely just a distraction.
- Filing a counterclaim simply because you found additional damage after being sued could backfire if it appears retaliatory. Only pursue additional damages if they're legitimate, documented, and allowed under the law.
At this point, your best approach is to organize your evidence:
- The lease.
- Move-in and move-out photos/videos.
- Your itemized deductions.
- Invoices and receipts.
- Any communication with the tenant regarding the condition of the property.
If the amount in dispute is significant, it may be worth spending an hour with a New Jersey landlord-tenant attorney. They can tell you whether the issue is the deductions themselves or whether the problem is that the statutory procedures weren't followed. In many security deposit cases, procedure is just as important as the actual damages.
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