This article was posted on Monday, Mar 11, 2013

[Editor’s Note:  Landlord Law & Multi-Housing Report includes expert analysis of the latest legal developments in the rental housing sector as well as news about the multi-housing market, landlord-tenant relations and successful management strategies.  Rental housing laws vary from state to state and some may not be applicable to California; however, most cases contain valuable lessons for housing providers.]

New Jersey.  The landlord owes his tenant double the amount of the security deposit he improperly retained plus attorneys’ fees but does not have to return the full deposit says the appellate court.

The tenant sued his landlord for failing to return his security deposit at the end of his lease.  He asked the trial court to award him double the amount of his $3,000 security deposit plus interest, court costs, and attorneys’ fees.

The trial court agreed he was entitled to have a portion of his security deposit returned to him.  The court said the landlord was entitled to deduct one month’s unpaid rent from the deposit and awarded the tenant a judgment for the balance — $950.

The trial court refused to double the amount of the unreturned security deposit and did not award the tenant attorneys’ fees and he appealed.  The court said the tenant was not entitled to double damages or attorneys’ fees because the landlord’s conduct was “not contumacious” (meaning sufficiently disobedient in this case) even though the landlord failed to return any of the deposit.

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The appellate court reverses the trial court’s decision and says the court should have awarded the tenant double damages after deducting the unpaid rent.

The appellate court says the “doubling of the unreturned security deposit was not a discretionary matter but was required” under the state’s security deposit statute.

The tenant is not entitled to double the amount of his entire security deposit but is entitled to double the amount of the deposit which was wrongfully withheld plus his attorneys’ fees. The matter is remanded back to the trial court and the lower court is ordered to enter judgment for the tenant in the amount of $1,900 and determine an amount of attorney’s fees to award as well.

Lesson: Landlords must comply with the security deposit statutes or face double and sometimes treble damages plus attorneys’ fees in most cases.  Document any deductions taken from the deposit and provide the tenant with notice of the deductions and promptly return the balance to avoid these types of lawsuits.

Info:   Sun Do Chun, Plaintiff-Appellant, v. Seung Oh Suh, Defendant-Respondent.  2010 N.J. Super. Unpub. 

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