Legal Question in Real Estate Law in New Jersey

Yes if the lease calls for the tenant to pay the water bill you can use the security for that purpose.

Does the lease require the tenant to pay the water bill? if so, then yes, pay it from security deposit. Do you have any other expenses from these tenants that they should pay?

And it seems that you could use an attorney available to answer your questions. Many attorneys will do that. If you are in northern New Jersey, please use me for that purpose.

Both of the answer above are good answers. However, I sense that your concern is that the tenant's may actually pay the bill as required and you will have then made a second payment and may not get the money back. If so, hold so much of the security deposit in escrow as is necessary to pay the final bill. Note that on your accounting for the security deposit and invite the tenants to send you proof of payment in order to get the money released.

See also: http://info.corbettlaw.net/lawguru.htm

I agree with John Corbett. However, I suggest you send a letter to the tenant (Certified Mail, Return Receipt Requested) stating that there is an open bill and the amount, and if not paid by its due date, with verification to you, it will be paid from the security funds. If not paid, or verified by the date specified, pay it.