Legal Question in Real Estate Law in New Jersey
Does the NJ Security Deposit ruling - about security having to be held in separate, interest bearing account - pertain to Assisted Living facilitys? My father lived in a facility nearly 4 years, and paid $4,000 as a security deposit. They claim the "contract" did not specificy it be in an interest-bearing account. But I wonder if this is a statutory requirement.
Kindly advise.
1 Answer from Attorneys
The New Jersey Rent Security Deposit Act, NJSA 46:8-19 et seq. applies "whenever money or other form of security shall be deposited or advanced on a contract, lease or license agreement for the use or rental of real property as security for performance of the contract, lease or agreement or to be applied to payments upon such contract, lease or agreement when due...." If the deposit is for any of those purposes, it comes under the Act regardless of what the contract says. You may also find it helpful to know that, if the facility has ten or more such units, the money must be invested rather than simply deposited in a bank account. Either way, the facility must account for the earnings on the money.
See also: http://info.corbettlaw.net/lawguru.htm
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