NJ Security Deposit - Can tenant demand on day of move-out?

Question

Just received notice that my tenant will be moving out of a rental property. Its been almost 10 years since I’ve had a tenant move, so need a bit of a refresher/guidance.

Is a move-out inspection is necessary to do with the tenant there? Or is an inspection typically done after the tenant has moved out?

I offered to do a move-out inspection with the tenant present, but now they are coming back and saying that they are expecting the full security deposit as contingency to a move-out inspection on the day they leave. They cite there is no reason to withhold the deposit.

I do believe in this tenant's care of the property (I visited a few months ago when we were doing general repairs), and I don't doubt that I will give them all their security deposit back. However, NJ law states that the landlord has up to 30 days to refund the amount, so I should be able to exercise that right. I don't think the tenant should be entitled to their thinking, correct? What would you do?

John M Chludzinski · Answer

In NJ there are frequently tenant security accounts that are interest bearing, and it is difficult to get to the bank, have them close the account with up to the day interest calculation, and get the proceeds transferred to an account that you can write a check from on the same day.  What happens if you have the bank make a cashier's check out to the tenant directly, and then the movers accidentally break something on the day of move-out??  How do you then adjust the security to reflect even a small charge? You can't so you are out of luck.  You have 30 days.  Take 10 days and do it right.

Joe P. · Answer

I am not a lawyer, so...take that with a grain of salt.

But my understanding is you have 30 days from the lease end-date to return the security deposit for the state of NJ.

Now, I also recognize people need access to those funds for the next spot, and not everyone has 1000+ dollars lying around at all times.

If your tenant is "demanding" anything (other then required fixes if something is broken, they have a right to a functioning and safe house) then I'm not sure how willing I'd be to work with them. But maybe you can use this as an incentive. I do walkthroughs a few weeks before they're set to move out and point out the document I'm using and what I see based on it.

Doing that might give you a good opportunity to point out issues at that time, they can start working on it, and perhaps on move-out day they're finished with those and its mostly rent-ready.

If they've been a good tenant and are willing to work with you, its a good opportunity for everyone to get what they want. But formalize it -- be explicit and document what needs to happen to return the security deposit that day. And if something isn't done (i.e. the fridge needs to be cleaned and the cleaning fee is $50 per hour) you can itemize it based on what you see to give them an idea what wouldn't go back to them.

I'd be curious to hear other suggestions, but good tenants who have done everything they should could potentially use some help, and you could help yourself in unit turnover as well.

Theresa Harris · Answer

@Sandy S.  They don't have the option of you doing the move-out inspection or not, you do a move out inspection period and after they have moved out.  The option is whether they are present or not.  They need to return their keys to you at the end of the lease, not after you've done the inspection (unless they move out on the last day of their lease and everything is cleaned).

Peter Tverdov · Answer

Schedule the move out inspection with them the day the Lease expires. If they move out early, do it early. If they no show, just do your thing. You have 30 days from the day the Lease expires to send the deposit back. Make sure they know this so they don't ask you 3 times.

Anthony Wick · Answer

@Sandy S.

I do not return deposits back early. Why? Because it could take 2-3 weeks for you or the new tenant to find out what is broken, needs repairing, etc. Until you live there, or rehab a unit, you cannot know what is wrong in a short period of time.

Simply recite the law and state you will return their deposit within 30 days, with an explanation and receipts if any of their deposit was used. They don’t have to have a move out inspection either. That’s for their protection.

Sandy S. · Answer

All well thought out responses here, and appreciate the insights.  The only thing that makes me slightly uncomfortable is going by 'feel' (relationship) rather than 'fact' (law).  As @John M Chludzinski mentioned, there's always a risk of something happening right up to the day of move-out.  @Theresa Harris good thoughts on doing a thorough inspection without being rushed.

If the tenant insists on receiving the deposit as a condition for agreeing to a move-out inspection, I might as well tell them to move-out as originally planned and do the inspection after they leave.  Would that be reasonable?  I don't want to be in the uncomfortable position to have to meet up, go through the unit, and them expecting to get their deposit right then and there.

This article also seems to strengthen the argument of not giving a security deposit at time of move-out, for anyone else considering a similar situation:

https://www.rentprep.com/landl...

Theresa Harris · Answer

@Sandy S.  Take your time going through the unit.  It is often easier to do this without the tenant there as it takes time to look through everything and you don't want someone asking 'are you done yet?'.  Take photos.

you can probably find a list online, but things to check: plumbing (toilet flushes, sinks and tubs drain, faucets work, no leaks), appliances: fridge and stove clean and all stove elements (and oven) work and are clean-especially the oven, cupboards (everything cleaned out and doors open and close), unit is clean (carpets have been professionally cleaned, not just vacuumed), all keys are returned.  All utilities have been paid in full and transferred to your name.

Jason D. · Answer

@Sandy S. In NJ, you have 30 days.... take the 30 days. Not only do you want to do a thorough walk through after the place is empty, you also want to make sure that all utilities are paid in full.

Debbie W. · Answer

I had 2 tenants that left the apt in such beautiful condition so the next tenant could move in the following day. I gave them the check upon them moving out. On the other hand, my cousin had a tenant that hadn't paid the utilities. He got stuck with their past due bills because the utilities would not turn them on again for the property. Follow the law and send as soon as you are sure everything is kosher.

Vaughn Smith · Answer

@Sandy S. you should consult with an attorney, but here is what the state has to say about security deposits

https://www.state.nj.us/dca/di...

NJ Security Deposit - Can tenant demand on day of move-out?

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