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APPELLATE DIVISION AFFIRMS TRIAL COURT’S GRANT OF SECURITY DEPOSIT TO VACATING TENANT

May 10, 2018

ROBERT B. SPAWN reports on a recent unpublished decision from the Superior Court of New Jersey, Appellate Division.

A recent New Jersey case involved a Plaintiff-Tenant who filed a complaint against a Defendant-Landlord for the return of her security deposit. The Landlord, a real estate company, had leased a commercial property to the Tenant in April 2016, but, after the Tenant experienced numerous break-ins due to an improperly secured window, she asked to terminate her lease early. The Landlord agreed, and the two parties executed a lease surrender agreement on September 30, 2016.

 

Under the lease surrender agreement, the Tenant released the Landlord from any liability or responsibilities under the original lease and forfeited any claims or damages she may have had against the Landlord in connection with her occupation of the premises. The Landlord, in turn, released the Tenant from her responsibilities under the original lease. Importantly, the lease surrender agreement did not mention the Tenant’s security deposit.

 

The Tenant then vacated the premises and requested the return of her $6,200 security deposit. Unfortunately for the Tenant, the Landlord indicated that it would not return the security deposit because it did not know how long it would take to re-lease the space. The Landlord also argued that it was keeping the $6,200 security deposit in exchange for relinquishing its right to $10,000 of unpaid rent owed under the original lease. Additionally, the Landlord asserted that the Tenant’s release of any “claims or damages” against the Landlord in the lease surrender agreement meant that the Tenant was relinquishing her right to the security deposit.

 

The trial court rejected the Landlord’s argument, finding that the lease surrender agreement contained no terms that indicated that the Tenant was forfeiting her right to her security deposit. The judge explained that, had the Landlord wished to retain the security deposit, it would have put a provision to that effect in the lease surrender agreement. The judge also noted that any ambiguities in the lease surrender agreement were construed against the Landlord as drafter of the document. 

 

In affirming the trial court’s decision, the Appellate Division stated that New Jersey courts have shown an increasing tendency to analogize landlord-tenant law to contract law. Accordingly, the Court could not unilaterally insert terms into an agreement between a landlord and a tenant that contradicted what was clearly expressed (or not expressed) in the document. Indeed, there was no specific reference to a security deposit or unpaid rent in the lease surrender agreement, and the absence of any controlling language meant that the Tenant was entitled to her money back.

 

Please contact Robert B. Spawn if you have any questions or need assistance in connection with this subject.