New Executive Order Provides New Jersey Tenants Right to Use Security Deposit to Pay Rent

April 27, 2020 – Governor Phil Murphy says renters in New Jersey, who are struggling as a result of the COVID-19 pandemic, can now direct their landlords to apply their security deposits as payment for their unpaid or future rents.

Signed on April 24, 2020, Executive Order No. 128 aims to provide additional options to tenants until after 60 days following the termination of the public health emergency.

According to EO No, 128, upon written or electronic request from a tenant, the security deposit, including its interest or earning, shall be credited to rent payments due or about to be due during the current public health emergency or 60 days after the termination of the public health emergency.

Once the tenant applies to deposit, they will be liable for all expenses which would have been paid out of the deposit.

The tenant will no longer be required to replenish the security deposit during the period of the rent contract.

The tenant, however, shall pay a security deposit anew if the tenant and landlord decide to renew or extend their subsisting rent contract.

“We recognize the anxiety that so many are feeling about looming rent payments, and during this emergency, renters should have the ability to utilize their security deposit to help them stay in their place of residence,” Governor Murphy said.

The Governor clarifies that the move is meant to be a critical short-term support while the housing community and the federal government is still figuring out long-term solutions to the Coronavirus crisis.

Security deposits are normally paid prior to move in and are meant to cover for damages to the buildings caused by tenants, as well as unpaid rents and utility bills.

Many, however, question the seemingly one-sided EO that could save tenants at the expense of landlords. Some questions raised include ‘when will tenants be required to pay back the security deposit’ and ‘can tenants getting their unemployment still be made to pay.’

The New Jersey Department of Community Affairs has set up an online FAQ for tenants and landlords as to their respective rights and responsibilities.

“Everyone will have access to the same information, so there can be no more misunderstandings,” Governor Murphy said through a Facebook post.

On March 19, 2020, Governor Murphy issued Executive Order No. 106, which protects any homeowner or tenant against eviction for the entirety of the current health emergency.