3 landlord questions in NJ

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3 landlord questions in NJ

John Palatzo
Member since 2019 · 4 posts · 0 votes

Hi folks,

Just curious if anyone can answer these 3 questions about renting a house in New Jersey.  I’m still kind of new to being a landlord and I want to make sure I'm "following the right laws", etc.

1. I currently have a security deposit from my tenants, which is 1.5 month's rent. From what I've read, that's the maximum you're allowed to have for a security deposit in NJ. Now the tenant will be bringing in a dog and I'm trying to figure out the best path forward. I've heard of a "pet deposit" where the landlord collects a little more money in case the dog damages something. I've also heard where people collect extra money each month for the same reason. I've also read that no matter what you call the money you collect, you can't collect more than 1.5 month's rent. Regardless if you call it a “security deposit”, “pet deposit”, etc. When you combine them all together, it can't go higher than 1.5 month's rent. What's strange to me is that even if I were to ask for $200, that doesn't seem like it would cover much if the dog did something like barf on the carpet. Looking for suggestions here.

2. The second question deals with when I'm supposed to ask the tenant if they're going to stay for another term, and when they have to let me know by. I was using 60 days and 30 days from the anniversary date, respectively. Is there something in NJ law that dictates these dates?

3. Going back to the security deposit, let's say the tenant stays for 3 years. Am I just supposed to let the interest accrue over those 3 years and don't touch it? Or does the law saw that I'm supposed to give them the interest each anniversary?

Any references to the actual NJ law would be awesome!

Thanks so much!

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Christopher Gerena
Hudson County · Member since 2018 · 21 posts · 7 votes
7y

In the area that I work in, Hudson County, most landlords will charge a non-refundable pet fee (one time only) up front, it can vary from 250-500, and/or additional rent because of the pet. But the "security deposit" cannot be more than 1.5 months rent.

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  • Peter TverdovBusiness Member
    Developer · New Brunswick, NJ · Member since 2015 · 1k+ posts · 2k+ votes
    7y

    I have a property management company in Central NJ so we have some familiarity here:

    Use petscreening.com to screen pets, that's what our management company uses. It quickly filters out the jokers from people who actually have a trained pet that's not a liability.

    We charge pet rent up front in one lump sum and write into the Lease that the tenant is responsible for the pet, yada, yada, yada. They don't like it, don't rent here. Again, filters out the jokers.

    You're supposed to give the tenant the interest accrued after each year or let them deduct it from the rental payment on each 12 month anniversary.

    [email protected]732-289-3823
    1Reply
  • John Palatzo
    OP
    Member since 2019 · 4 posts · 0 votes
    7y

    Thanks Peter. 


    How much do you charge for the “pet rent” and is it considered non-refundable?

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  • Kevin Blanchard
    Rental Property Investor · NJ · Member since 2019 · 66 posts · 44 votes
    7y

    @John Palatzo why not charge on ongoing pet rental fee? I have done that in the past almost as a hedge against any damage they may cause. We charged $25 extra per month per pet. 

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  • John Palatzo
    OP
    Member since 2019 · 4 posts · 0 votes
    7y
    Originally posted by @Kevin Blanchard:

    @John Palatzo why not charge on ongoing pet rental fee? I have done that in the past almost as a hedge against any damage they may cause. We charged $25 extra per month per pet. 

    Thanks Kevin.  Was that a refundable fee?  Not sure if they would go for that since I just raised the rent (slightly).  But then again, if I collect that “fee” and say it’s refundable, then it’s kind of like a security deposit (of which I’m already maxed out).

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  • Kevin Blanchard
    Rental Property Investor · NJ · Member since 2019 · 66 posts · 44 votes
    7y

    @John Palatzo No it is not refundable. It is rent. You can also charge a security deposit for the pet as well. I did a $250 pet security deposit. 

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  • Angelo Mart
    Professional · Parsippany, NJ · Member since 2013 · 384 posts · 262 votes
    7y

    I think it is a separate "pet deposit" aside from Security deposit. Sometimes it may be easier to ask for a higher rent which is what one landlord I knew did in NJ.

    Yes you are supposed to send them the interest every year, however, i tend to forget as it is peanuts

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  • Patrick LiskaPro Member
    Investor · Verona, NJ · Member since 2014 · 1k+ posts · 832 votes
    7y

    I have a property in PA that I allow certain dogs, I charge a nonrefundable fee of $25/month. here is the state law on deposits: 

    https://www.state.nj.us/dca/divisions/codes/publications/pdf_lti/sdepsit_law.pdf

    lease ending must be 30 days in advance of lease anniversary : 

    https://www.lsnjlaw.org/Housing/Landlord-Tenant/Leases/Pages/Ending-Leases.aspx

    1Reply
  • Peter TverdovBusiness Member
    Developer · New Brunswick, NJ · Member since 2015 · 1k+ posts · 2k+ votes
    7y

    We charge $30 for cats $40 for small dogs and $50 for larger dogs up to a certain weight (I forget the amount off the top of my head but it's written in our pet policy. There are breed restrictions as well. No thank you on renting to the guy with a 100 pound bull mastiff. 

    [email protected]732-289-3823
    1Reply
  • Orlando Jurado
    Member since 2019 · 19 posts · 10 votes
    7y

    @John Palatzo

    https://www.nj.gov/dca/divisions/codes/publications/pdf_lti/t_i_r.pdf

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  • John Palatzo
    OP
    Member since 2019 · 4 posts · 0 votes
    7y

    Thanks everybody. From what I’m reading, both in this post and in the law, the concept of collecting a “Pet deposit“ sounds kind of odd to me. I say that because if part of the deposit is considered for the pet, and the other part of the deposit is just security deposit, then you can only use the pet deposit for damages caused by the pet. But if you just collect one security deposit, then you can use it for anything (pet related or not).

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  • Christopher Gerena
    Hudson County · Member since 2018 · 21 posts · 7 votes
    7y

    In the area that I work in, Hudson County, most landlords will charge a non-refundable pet fee (one time only) up front, it can vary from 250-500, and/or additional rent because of the pet. But the "security deposit" cannot be more than 1.5 months rent.

    1Reply
  • Patrick LiskaPro Member
    Investor · Verona, NJ · Member since 2014 · 1k+ posts · 832 votes
    7y

    John,

    Based on the New Jersey law, what I posted and @Orlando Jurado posted, you can collect a "Pet Deposit" but it counts towards your 1 1/2 rent. I would keep your 1 1/2 rent deposit and charge a monthly fee, say you charge 700/month rent, 1 1/2 times is 1050 for security deposit. now charge 25 per month additional fee option for anyone wanting a pet, now your monthly rent is 725 - 1 1/2 month security is now 1087.50. so now there is an additional 37.50 in the security deposit and you are collecting 25/month, at the end of the year you have an additional 300 non refundable income and any damage come out of their security deposit. if it was part of the security in the beginning you would have to return that 300. New Jersey does not say you can not collect an additional fee for having pets.

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  • Domenick T.
    Investor · Springfield , NJ · Member since 2017 · 192 posts · 93 votes
    7y

    Do not earmark any portion of the SD for “pet deposit”! If you do, you will only be allowed to deduct pet damages from that portion of the SD. 

    If the tenant destroys the place but the pet didn’t you can only keep the non pet SD portion. 

    Charge a higher rent if you allow the pet. 

    Write to your tenant with the balance in their SD account annually and ask if they want the interest to remain in the account. 

    Look to your lease as to when notice is due.  If silent, then 30 days is required  I use 60 days in my lease and I send a letter with the new rent amount around 2 weeks before that.

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  • Sami Gren
    Rental Property Investor · NJ · Member since 2019 · 442 posts · 40 votes
    9mo

    @Peter Tverdov  i would like to hear how you go about the accounts, do you have individual accounts for each tenant? also which bank do you use that gives you a min. of 3% ?

    0Reply
  • Peter TverdovBusiness Member
    Developer · New Brunswick, NJ · Member since 2015 · 1k+ posts · 2k+ votes
    9mo

    @Sami Gren if you are speaking of security deposit accounts, the answer varies based on who you speak to. Technically I believe you need to have a different escrow account for each tenant (if you're a large landlord with 50 tenants that must be awful). Our property management company here in New Jersey always has the owners hold the deposits so we don't need to deal with that headache of opening and closing the accounts. The rates are pretty minimal. 

    [email protected]732-289-3823
    1Reply
  • Earl WhitePro Member
    Attorney · Rutherford, NJ · Member since 2020 · 60 posts · 37 votes
    9mo

    See below:

    Question 1:

    The primary legislative authority governing security deposits in New Jersey is the Security Deposit Act N.J.S. § 46:8-21.2. This statute provides that a landlord may not require a security deposit greater than one and one-half times the monthly rent for residential properties. It does not distinguish between general security deposits and those designated for specific purposes, such as pet-related damages.

    New Jersey courts have interpreted the Security Deposit Act to prohibit landlords from requiring security deposits in excess of 1.5 times the monthly rent, regardless of how the deposit is characterized. In Minster v. Volovnik, DOCKET NO. A-3149-18T1 (N.J. Super. App. Div. May 21, 2020), the Appellate Division directly held that a landlord cannot evade the statutory cap by labeling part of the security deposit as a “pet security.”

    Question 2:

    I assume your tenant is subject to the Anti-Eviction Act (i.e. that it is not an owner occupied 1-2 family property). If that is not the case, all bets are off if the tenant becomes month-to-month.

    The notice periods of renewal are generally governed by the lease itself. If there are no notice time periods set forth in the lease, or they are not enforced, the tenant then is converted to a month-to-month tenant. If you wish to change the rent or present new lease terms without a lease provision laying out the times you must give one month’s notice prior to instituting an eviction. This is one full month - not 30-days. I don’t have a citation for that off the top of my head.

    I would also note that tenants cannot waive their rights in New Jersey. As such, a lease provision that “shortened” the one month notice would not be valid in my opinion.

    Question 3:

    “The interest or earnings paid thereon by the investment company, State or federally chartered bank, savings bank or savings and loan association, shall belong to the person making the deposit or advance and shall be paid to the tenant in cash, or be credited toward the payment of rent due on the renewal or anniversary of said tenant's lease or on January 31, if the tenant has been given written notice after the effective date of P.L. 2003, c. 188 and before the next anniversary of the tenant's lease, that subsequent interest payments will be made on January 31 of each year.” https://law.justia.com/codes/new-jersey/title-46/section-46-8-19/

    [email protected]201-627-2457
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