E.O. Allows Tenants to Direct Use of Security Deposit to Offset Rent

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(Camden, NJ) – On Friday, April 24, Governor Phil Murphy signed Executive Order No. 128, allowing tenants to direct their landlords to use their security deposits to offset rent or back rent. The order waives provisions of statutory law that prohibit the use of security deposits for rental payments.

Under the order, 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). Should a tenant and landlord extend or renew their lease then the tenant would be obligated to replenish the security deposit within six months following the end of the Public Health Emergency established by the Governor’s orders, or on the date when the new agreement is extended or renewed, whichever occurs later.

“It is critical during this crisis for renters to understand their rights and to be aware of the tools at their disposal,” said Freeholder Director Louis Cappelli, Jr. “The governor’s latest executive order could be crucial in helping tenants in Camden County to make their rent payments on time or to offset back rent. With thousands of families wondering how they will pay their bills this month, this short-term support will help to keep many afloat and provides another form of assistance during this uncertain time.”

The state Department of Community Affairs has established a rental housing information page and question portal for tenants and landlords seeking information about their rights during the public health emergency. You can access the portal here.

A standing information page has also 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 state Department of Banking and Insurance’s intake form for further assistance. For more information on COVID-19-related mortgage forbearance, please visit covid19.nj.gov and search “Get Assistance.”

To read a full copy of Executive Order No. 128, visit here.