Legal Question in Real Estate Law in New Jersey

Taxable interest on security deposit: mine or theirs?

Hello! I am the owner of a 3 family bldg. I occupy one of the apartments and rent the other two. When my tenents moved in I put their security deposits in one bank account which is separate from my personal bank account but is under my name. One of my tenents has requested the 1099-INT for her security for the year.... I have it but its in my name and its combined with the deposit and interest of the other tenent. What is the law here..... I think I am entitled to admin fees of 1% of her $800 which would be about $1.20 less than her total share of interest. How do I handle this?

Thanking you in advance,

Allison


Asked on 2/22/02, 12:22 pm

1 Answer from Attorneys
Savyon Grant Law Office of Savy Grant

Re: Taxable interest on security deposit: mine or theirs?

You must have in the contract for the apartment a clause allowing the administrative fee. Without the clause in the contract, you must give the tenant all the interest. The law is very strict, if a landlord violated, the court may order you to pay up to two times the amount.

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Answered on 2/22/02, 3:41 pm


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