On appeal from Morris County District Court.
Lora, Michels and Larner. The opinion of the court was delivered by Larner, J.A.D.
This appeal involves the construction and application of N.J.S.A. 46:8-21.1 which establishes the rights and duties of landlords and tenants with respect to the disposition of a security deposit at the expiration of a tenancy.
Plaintiff-tenant brought the action pursuant to the statute to recover double the amount of the security deposit plus costs and attorneys' fees. The landlord denied that any moneys were due to plaintiff and counterclaimed for unpaid rent and other charges due under the provisions of the lease.
The facts as stipulated by the parties consist of the following. The tenant rented an apartment for a period of one year, effective May 1, 1976, pursuant to a written lease at a rental of $235 a month, and posted a security deposit of $352.50. She vacated the apartment on March 4, 1977, admittedly knowing that she owed $559.10 for back rent and other charges. As of the time the tenant left the premises, the security deposit plus accrued interest amounted to $361.15, thereby leaving a net balance due to the landlord of $197.95.
The central issue herein arises out of the failure of the landlord to comply strictly with the statutory requirement that he notify the tenant by registered or certified mail of the itemization of the deductions made from the security deposit for charges due under the terms of the lease. Apparently the landlord did forward a letter containing this data by regular mail, and requesting payment of the net balance of $197.95, but the tenant denied having received the same.
The trial judge found that the landlord's failure to comply with the certified or registered mail notice required by the
statute subjected him to a penalty of double the amount of the security deposit plus interest and costs, less a set-off of the amount admittedly due to the landlord. In his discretion he also allowed a counsel fee of $125, plus $50 as trial expenses, resulting in a judgment for the tenant in the sum of $329.55 plus double the costs.
Under the stipulated facts the court erred in granting judgment to plaintiff. The applicable statute N.J.S.A. 46:8-21.1, provides:
Within 30 days after the expiration of the term of the tenant's lease or licensee's agreement, the owner or lessee shall return by personal delivery, registered or certified mail the sum so deposited plus the tenant's portion of the interest earned thereon, less any charges expended in accordance with the terms of a contract, lease, or agreement. Any such deductions shall be itemized and the tenant or licensee notified thereof by registered or certified mail. In any action by a tenant or licensee for the return of moneys due under this section, the court upon finding for the tenant or licensee shall award recovery of double the amount of said moneys, together with full costs of any action and, in the court's discretion, reasonable attorneys' fees.
This legislation was intended to protect tenants from overreaching landlords who seek to defraud tenants by diverting rent security deposits to their own use. Watson v. Jaffe , 121 N.J. Super. 213, 214 (App. Div. 1972). Nevertheless, the penalty provision of double recovery, costs and attorneys' fees can only be invoked as the Legislature mandated.
The statute provides in clear and unmistakable terms that in an action for "the return of moneys due under this section, the court upon finding for the tenant or licensee shall award recovery of double the amount of said moneys * * *." The "moneys" referred to represent the net amount due to the tenant for the security deposit and interest ...