You can pay rent with your security deposit during coronavirus pandemic, Murphy orders

Posted Apr 24, 2020

New Jersey renters struggling to pay rent during the coronavirus pandemic can now use their security deposits for help.

Gov. Phil Murphy issued an executive order Friday that allows renters in the state to direct their landlords to tap into the previously paid security deposits either to pay rent in full or to make up a shortfall.

“This is money that had been paid up front to secure a lease, and during this emergency renters should have the ability to tap this deposit to help them secure their place in their home,” Murphy said of the security deposits during his daily press briefing in Trenton

Matt Platkin, Murphy’s chief counsel, said that the order specifically removes a statutory bar on using security deposits for rent.

“By removing that statutory bar, tenants can instruct their landlords to use the security deposit," Platkin said.

Platkin also said that the order prevents landlords who do use a tenant’s security deposit from seeking another security deposit until at least six months after the coronavirus emergency ends, or the end of the lease.

Murphy urged tenants who can afford to pay their rent to make timely payments. He previously told tenants that any landlords who are “screwing you" should be reported to the state Division of Consumer Affairs.

“We are all in this together, tenants and landlords, and we can only emerge stronger when no one, and I mean no one, fears for their home or residence,” Murphy said Friday.

Still, if payments are missed, landlords cannot lock tenants out of their house for up to 60 days after the state of emergency is lifted.

Murphy has also suspended rental increases for about 36,000 rental homes, occupied mostly by low- and moderate-income families who have been “among those most economically impacted by this emergency,” he said at the April 16 press briefing.

The governor also announced a new state website on Friday — — that will serve as a one-stop-shop for renters and landlords seeking information on new guidelines for the pandemic.

“Everyone will have access to the same information, so there can be no more misunderstandings, and so everyone understands our expectations of them during this time,” Murphy said.

The New Jersey Apartment Association on Friday urged landlords to communicate and be flexible with tenants during the COVID-19 emergency, and to waive fees for late rent payments.

The New Jersey Housing and Mortgage Finance Agency, which provides funding for affordable housing, has expanded its programs to include renter and pre-foreclosure housing. Counseling is also available for renters who need to approach their landlord for help.

Roughly 35 percent of New Jersey residents rent their home or apartment, according to Census data.

New Jersey homeowners with mortgages are currently being offered a forbearance period because of the coronavirus. Murphy stressed on Friday that the state expects lenders to not charge those skipped payments as soon as the grace-period ends.

"We want to make it perfectly clear to the lenders that, as part of our mortgage forbearance agreement, that our expectation is for them to tack the forborne payments onto the end of the loan. Again, at the end of loan, not at the end of the 90-day forbearance period.”

Murphy added that landlords who are aided by mortgage forbearance are expected to give their tenants help as well.

“We fully expect that you extend that relief to your tenants as well," Murphy said. "Make sure there’s some symmetry here.”

New Jersey, a densely populated state of 9 million residents, has seen at least 102,196 COVID-19 cases and 5,617 related deaths, state officials announced Friday. Only New York has more cases and deaths among U.S. states.

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