NJ Security Deposit question: which tenant gets the interest?

[Nicholas Jose]

Good evening, BP.

Simple question: Let's say I have Duplex #1 with a checking and a savings account. The checking account will collect tenant #1's rent, whereas the savings account will hold tenant #1's Security Deposit + interest.

Fast forward a year and I decide to house-hack into Duplex #2 via FHA. I move into Duplex #2 and tenant #2 occupies the unit I used to live in in Duplex #1. Now the checking account collects rent from tenants #1 and #2 and the savings account holds the Security Deposits from both tenants #1 and #2 + interest.

Suddenly, tenant #1 wants to vacate from Duplex #1, so now I have to send the Security Deposit to him/her. The problem is: should tenant #1 receive all of the interest? Can I split the interest down the middle between tenant #1 and tenant #2? Should I open another savings account dedicated to tenant #2?