REAL ESTATE

NCLA Appeals NJ Security Deposit Ruling

New Jersey Governor Phil Murphy (Getty)

Garden State landlords aren’t giving in after a New Jersey court ruled that residents can use their security deposits to pay rent.

In July, an appeals court upheld an executive order from Gov. Phil Murphy that allowed struggling tenants to use their security deposits toward back rent during the pandemic. Now, the nonprofit group New Civil Liberties Alliance is petitioning the Supreme Court of New Jersey to reverse the appellate court’s decision.

The executive order, issued in April of last year, gives renters the option of instructing their landlords to use pre-paid security deposits to offset rent without needing to replenish the deposit until 60 days after the pandemic.

NCLA, which says it represents small landlords in the state, argues that the law violates property owners’ constitutional and contractual rights. As a result of the executive order, landlords have been left on the hook for thousands of dollars’ worth of damages left behind by tenants, the organization alleges.

Worse, NCLA warns that the appellate court ruling creates a precedent that could allow governors unchecked power to suspend or repeal any existing statutes under the guise of an economic emergency.

“The Appellate Division appeared to grant Governor Murphy the power to do literally anything he wants so long as he unilaterally decides that his executive actions are related to the pandemic and in the public’s interest,” NCLA counsel Jared McClain said in a statement. “But the Governor’s emergency powers do not include the authority to waive statutory law and rewrite private contracts”

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