New Jersey Appeals Court Rules in Favor of Gov. Murphy Regarding Tenants Using Security Deposit to Make Rent Payments

By: Kaitlyn Kudriavetz, Follow South Jersey Child Welfare Intern

Photo: Jon Bradley | Follow South Jersey

TRENTON, N.J. — A New Jersey appeals court has officially approved Governor Phil Murphy’s April 2020 executive order in which he allowed tenants to have their landlords use their security deposit to cover rent payments.

Though some New Jersey landlords argued that this order was unconstitutional, the state court ultimately decided that Gov. Murphy was able to push the order under the Disaster Control Act.

“We recognize the anxiety that so many are feeling about looming rent payments, and during this emergency renters should have the ability to utilize their security deposit to help them stay in their place of residence,” Gov. Murphy said when he first signed the executive order earlier this year. “While this action does not resolve the broader financial concerns of New Jerseyans, this will provide critical short-term support as the first of the month approaches. My administration will continue working with the housing community and federal government to develop long-term solutions to this crisis.”

The now-approved executive order waives the law that prohibits use of security deposits for rent payments. Tenants won’t be further obligated to make any sort of security deposit under their current lease, but they would be expected to make a new security deposit payment in full within six months in the event that they renew or extend their lease.

Acting Attorney General Andrew Bruck hailed this ruling as a win for New Jersey residents struggling financially because of the circumstances brought on by the pandemic.

“In the worst of COVID-19, [Gov. Murphy] protected individuals from public health and economic harms. One Exec Order supported renters and helped keep them in their homes,” Bruck said in a Tweet. “Today NJ won big in court: the Gov’s Order protecting renters is valid.”

The court’s decision signals a victory for tenants throughout the state who are behind on their rent payments. However, the group of landlords who brought the matter to a New Jersey appeals court argued that Gov. Murphy extended beyond his executive power in authorizing the use of security deposits for rent payments.

“Emergencies don’t create power, and we depend on our courts to enforce the law in the face of an emergency,” Jared McClain, who represented the plaintiffs in the case, said. “Today’s decision failed to do so. Now, no law or contract in New Jersey is safe anytime the state faces an economic downturn.”  

This article was produced by a Follow South Jersey news intern thanks to a grant provided by the Robert Wood Johnson Foundation through the New Jersey Health Initiatives program to create hyper-local news to meet the informational and health needs of the City of Bridgeton, N.J.