New Jersey Governor Phil Murphy signed an executive order on Friday that allows renters to direct their landlords to use their security deposits to offset rent or back rent.
“We recognize the anxiety that so many are feeling about looming rent payments, and during this emergency, renters should have the ability to utilize their security deposit to help them stay in their place of residence,” Murphy said. “While this action does not resolve the broader financial concerns of New Jerseyans, this will provide critical short-term support as the first of the month approaches. My administration will continue working with the housing community and federal government to develop long-term solutions to this crisis.”
Murphy’s executive order waives provisions of statutory law in New Jersey that prohibit the use of security deposits for rental payments, enabling tenants to instruct landlords to use their security deposits to offset rent or back rent. Tenants will not be obligated to make any further security deposit relating to their current lease agreement, but would still be responsible for any costs landlords face that would have been reimbursable via the security deposit such as property damages. If the tenant and landlord extend or renew the lease, then the tenant would be obligated to replenish the security deposit in full either six months following the end of the public health emergency or on the date on which the current lease agreement is extended or renewed, whichever is later.
The order took effect on Friday and will be in place until 60 days after the public health emergency ends.
Murphy also announced that the Department of Community Affairs has established a rental housing information page for tenants and landlords seeking information about their rights during the public health emergency.
An information page also has been added to the State’s COVID-19 website for homeowners interested in taking advantage of the previously announced mortgage forbearance agreement with private lenders. Homeowners with questions or concerns related to conditions of an agreement with their mortgage lender will be directed to the New Jersey Department of Banking and Insurance’s intake form for further assistance.
Murphy also made it clear that mortgage lenders must add the 90-day forbearance payments to the end of the mortgage term, and extend the term for three months.
“Landlords can’t evict tenants, and no one should fear losing a home, period,” Murphy said in his press briefing on Saturday.
The rental housing information page and question form can be found at: https://covid19.nj.gov/renter.
For more information on COVID-19-related mortgage forbearance, visit covid19.nj.gov/mortgage.