Initial Rent & Deposit?

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Initial Rent & Deposit?

Joe P.
Philadelphia, PA · Member since 2017 · 824 posts · 1k+ votes

Hi all,

I just purchased a property in Gloucester City; its a duplex with one unit rented, and another vacant. I've been trying to get tenants in with not much luck so far, and I had one prospective tenant say that my deposit requirements may be illegal.

The rent is $950 per month, and the security deposit is $1,250. I was telling folks that the initial deposit is first month's rent, last month's rent, and security deposit - a total of $3,150. This particular prospect indicated that I could only charge first month's rent and security.


I scoured the web and forums to see if there is anything preventing me charging first and last, but I don't see it. I'm concerned about being burned on that last month, which is why I want to charge it.

Would love some input from our local investors, and if anyone has a lawyer they want to recommend, I'm all ears as well! Was going to use the Rocket Lawyer landlord document for NJ and add an addendum for rules.

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Natalie Schanne
Real Estate Agent · Princeton, NJ · Member since 2016 · 1k+ posts · 1k+ votes
8y

@Joe P. - In New Jersey, the maximum security deposit (including any refundable pet fees) is 1.5x monthly rent. So for a $1000/mo rental, you can ask for $2500 = 1000 first month's rent + 1500 security deposit. You cannot hold last month's rent. If they don't pay you the last month, start the eviction process asap. Nobody wants that on his/her record so they'll pay if they're able. 

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  • Jonathan Herron
    Attorney · NJ · Member since 2018 · 120 posts · 58 votes
    8y

    @Joe P.You cannot charge the last month rent when the lease is signed.  New Jersey allows for an eviction on non-payment of rent to be filed pretty much as soon as rent not paid.  The deposit can be up to 1.5x the monthly rent.  

    Camden County processes evictions quickly and filing is usually enough to get a tenant to pay that last month's rent.  If you have any other questions feel free to pm me.

    1Reply
  • Debbie W.Pro Member
    Lindenhurst, NY · Member since 2017 · 75 posts · 35 votes
    8y

    In NY, I use a realtor. They do the background & credit checks. THe applicant pays the fees for checks and 1 month rent to the realtor when they are approved. Avoids headaches when they are checked out.

    0Reply
  • Michele Cosenza
    Member since 2024 · 2 posts · 0 votes
    2y

    In New Jersey is it legal for a landlord to ask you for first months rent ,a month and a half security and last months rent

    0Reply
  • Michele Cosenza
    Member since 2024 · 2 posts · 0 votes
    2y
    Quote from @Michele Cosenza:

    In New Jersey is it legal for a landlord to ask you for first months rent ,a month and a half security and last months rent


    0Reply
  • Frank Martielli
    Middlesex, NJ · Member since 2014 · 34 posts · 23 votes
    2y
    Quote from @Kevin Hill:

    You can't charge another deposit on top of the security deposit. For example, if you were charging 1.5 months security and wanted to charge say a $300 pet deposit on top of it, that would be illegal.


     The good news is "fees" don't count against the 1.5x deposit requirement. So you can charge, to use your example, an initial $300 pet "fee." A fee is not refundable, and therefore not part of the deposit.

    0Reply
  • Kevin P.
    Investor · NJ · Member since 2017 · 45 posts · 24 votes
    2y
    Quote from @Michele Cosenza:

    In New Jersey is it legal for a landlord to ask you for first months rent ,a month and a half security and last months rent

    In New Jersey you can only ask for the first month plus 1.5 months for security. Sometimes I have prospective tenants offer me 6 months of rent just to enhance their application. Do not ever accept this. It might be a trick or it might be innocent but it opens you up to lots of legal trouble.

    1Reply
  • Joe P.
    OP
    Philadelphia, PA · Member since 2017 · 824 posts · 1k+ votes
    2y
    Quote from @Michele Cosenza:

    In New Jersey is it legal for a landlord to ask you for first months rent ,a month and a half security and last months rent


    It is. Initial deposit can be only be 1.5x rent and you can only collect first month. Example below:

    Rent - $1000

    Security - $1500

    Max you can charge a tenant for move-in is $2500 at lease signing.

    Someone said you can charge fees in addition to the deposit - perhaps this is a gray area. I would consult a NJ lawyer for confirmation on this. My brain sometimes goes to "what happens if I'm in front of a judge and they ask me why I did something." It's sometimes better to play by the book than write your own script.

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