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Frontenac Associates v. Fauerbach

March 22, 1977


O'Halloran, J.d.c.


This is a summary action for recovery of possession of rented residential premises. The first count of the complaint, which sought possession on the ground that defendant tenant had refused to execute a lease proffered by plaintiff landlord, was dismissed without prejudice for reasons not germane to the second count, which seeks possession on the ground of nonpayment of rent.

Defendant is in possession of an apartment at 80 Prospect Avenue, Hackensack (a multi-family dwelling) as a month-to-month tenant holding over after an original written lease which expired on July 31, 1973. The present monthly rent is $232.10. Plaintiff holds a security deposit in the sum of $348.15, which is 1 1/2 times the monthly rent. Plaintiff claims defendant has failed to pay the rent for one-half of January and all of February 1977. Defendant contends that the rent should be deemed paid because the security deposit in the same amount is improperly held by the landlord.

This controversy involves an interpretation of a provision of the Rent Security Deposit Act, N.J.S.A. 46:8-19 to 26.

This act, which applies to residential rental premises other than owner-occupied two-family houses, permits the landlord to require a security deposit up to a sum equal to 1 1/2 times the monthly rent. The landlord holds the security in trust, must deposit it in a banking institution at interest, and within 30 days after expiration of the lease must return the deposit with accrued interest to the tenant and itemize in writing any deduction taken from the deposit. Effective July 3, 1973, N.J.S.A. 46:8-19 was amended to provide that if the landlord fails to notify the tenant of the name and address of the banking institution where the security is deposited, and the amount thereof, within 30 days after receipt of same, then the tenant may give written notice to the landlord that the security is to be applied on account of rent due or to become due, and

In August 1976 these same parties were before this court in an action seeking possession for failure to pay rent. It appeared then that plaintiff had failed to give defendant the required notice as to the place of deposit of her security. The court permitted defendant at the hearing to prepare and hand to plaintiff's attorney a written demand that her security be applied to the rent due, which was in the same amount as the security deposit, whereupon that action was dismissed.

Thereafter, sometime in October or November 1976, defendant's sister, acting on behalf of defendant but without her knowledge, paid a sum of money to plaintiff which included some outstanding rent as well as security deposit in the sum of $348.15. Defendant contends that in view of the statutory language quoted above, plaintiff was not entitled to again demand security from her. Plaintiff points to the provision in the statute which gives defendant the right not to make any further deposit during the term of her lease ,

and argues that since defendant is a holdover tenant each month is a separate lease term and after the expiration of any month plaintiff can demand a security deposit.

It is clear that the Rent Security Deposit Act is remedial legislation enacted to protect tenants from those overreaching landlords who diverted security deposits to their personal use. Watson v. Jaffe , 121 N.J. Super. 213 (App. Div. 1972). Initially it was held that a violation of the statute did not entitle the tenant to have the security applied to outstanding rent. Brownstone Arms v. Asher , 121 N.J. Super. 401 (Cty. D. Ct. 1972). The Legislature then enacted the amendment effective July 3, 1973 (L. 1973, c. 195, ยง 1) allowing the tenant in such circumstances to have the deposit applied to his rent and to be without further obligation to make any further security deposit "during the term of his lease."

In construing any legislation the following general principles set forth in Watt v. Franklin Mayor and Council , 21 N.J. 274 (1956), are most appropriate:

In every case involving the application of a statute, it is the function of the court to ascertain the intention of the Legislature from the plain meaning of the statute and to apply it to the facts as it finds them, [citations omitted]. A clear and unambiguous statute is not open to construction or interpretation, and to do so in a case where not required is to do violence to the doctrine of the separation of powers. Such a statute is clear in its meaning and no one need look beyond the literal dictates of the words and phrases used for the true intent and purpose in its creation. But few statutes can boast of such clarity or stand that test through every ...

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