New Jersey's Appellate Division holds that a landlord may not wrongfully withhold security deposits exceeding the statutory amount even where tenant has pets

In Reilly, et al. v. Weiss, (decided March 24, 2009) the Appellate Division considered the application of New Jersey’s Security Deposit Act where a landlord collected a security deposit of two and a half months’ rent because the tenant intended to keep cats in the leased premises. The Appellate Division concluded that the landlord could not justify collecting a greater security deposit amount than the one and one-half month’s rent, the maximum permitted by the Act, even if the tenant is maintaining a pet on the premises. The Appellate Division concluded that although the Security Deposit Act does not contain an express penalty for violating the maximum collectible amount, any monies that exceeded the maximum that were held by the landlord and not returned at the termination of the lease are monies that are subject to the punitive remedy of doubling the amount that is returned to the tenant pursuant to NJSA 46:8-21.1.

One of the many issues that can be learned by landlords is the importance of conducting a thorough due diligence and vetting of any potential tenants within the scope permitted under the Fair Housing Act and other applicable laws and regulations. Landlords should be particularly careful where the tenants smoke or have pets, both of which applied to the plaintiffs in this case. While a landlord must not be discouraged from renting to such prospective tenants, the lease should reflect or demonstrate the landlord's reasonable restrictions upon the use and occupancy of the leased premises. You can view a copy of the decision here.