New Legislation Regarding Tenants Payments to Landlords in New Jersey
The new bill is titled S1493 Sca (1R) and it was signed into law by Gov. Phil Murphy on Monday, January 13, 2020. Generally, the new legislation aims at landlords who require renters to agree to automatic monthly debit payments as a condition of entering a new lease or renewing a lease. The new legislation prohibits landlords from requiring residential tenants to pay rent and other related charges through electronic funds transfer and it requires landlords to provide receipts for cash payments.
Specifically, this new legislation prohibits a landlord from requiring that a tenant or a prospective tenant pay any rent, security deposit, utilities, parking fees, or other lease-related payments owed to the landlord, by means of electronic funds transfer, including automatic debit payments that transfer funds from a tenant’s bank account on a regular, periodic and recurring basis. The term “electronic funds transfer” includes payment made through an automated debit or credit system, or through an automated clearing house.
Further, this new legislation requires a landlord to provide a written receipt to a tenant for each cash payment the tenant makes to the landlord in a residential lease. Pursuant to the new legislation, the receipt must include specific information including: 1) the name and address of the landlord; 2) the name and tile of the agent of the landlord, if the cash payment is made to an agent; 3) the name and address of the tenant; 4) the date and amount of the cash payment; 5) a description of what the cash payment covers; 6) the signature of the landlord or the agent (to identify who accepted the payment).
Please be noted that this new legislation would apply to only residential lease agreements, including residential lease renewal and lease extension agreements. It would apply to agreements executed by all parties on or after the date of January 13, 2020. Nothing in the bill would prohibit a landlord and tenant (or prospective tenant) from mutually and willingly agreeing to allow for electronic funds transfers.
A landlord who violates the new legislation may be liable for an initial penalty of up to $100 for each offense. A second violation, occurring within a five-year period, is subject to a $200 penalty. Any subsequent violation within the five-year period is subject to a $300 penalty.
The information in this Client Alert is provided solely for information purposes. It should not be construed as legal advice on any specific matter and is not intended to create an attorney-client relationship. The information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based upon particular circumstances. Each legal matter is unique, and prior results do not guarantee a similar outcome.
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