N.J. Stat. Ann. § 46:8-1 et seq. § 46:8-20
Procedure on conveyance of property
Operative Text
2. Any person, whether the owner or lessee of the property leased, who or which has or hereafter shall have received from a tenant or licensee a sum of money as a deposit or advance of rental as security for the full performance by such tenant or licensee of the terms of his contract, lease or license agreement, or who or which has or shall have received the same from a former owner or lessee, shall, upon conveying such property or assigning his or its lease to another, or upon the conveyance of such property to another person by a court in an action to foreclose a mortgage thereon, at the time of the delivery of the deed or instrument of assignment, or within five days thereafter, or in the event of the insolvency or bankruptcy of the person receiving said deposit, within five days after the making and entry of an order of the court discharging the receiver or trustee, deal with the security deposit by turning over to his or its grantee or assignee, or to the purchaser at the foreclosure sale the sum so deposited, plus the tenant's portion of the interest or earnings accumulated thereon, and notify the tenant or licensee by registered or certified mail of such turning over and the name and address of such grantee, assignee or purchaser. Notwithstanding any other provision of law to the contrary, it shall be the duty and obligation of the grantee, assignee or purchaser to obtain from the grantor who is the owner or lessee at the time of the transfer, conveyance or purchase any and all security deposits, plus accrued interest on the deposits, that the owner or lessee received from a tenant, licensee or previous owner or lessee, and which deposits were invested, or should have been invested, in the manner required by section 1 of P.L. 1967, c. 265 (C.46:8-19). L.1967,c.265,s.2; amended 1971, c.223, s.2; 1979, c.28, s.2; 1985, c.42, s.2; 2003, c.188, s.2.
Under N.J.S.A. 46:8-1 et seq. § 46:8-20, when a rental property changes hands—whether through a sale, lease assignment, or foreclosure—the party holding tenants' security deposits must transfer those funds, along with any accrued interest owed to tenants, to the new owner or assignee at or within five days of the transfer. The outgoing owner or lessee must also notify each affected tenant by registered or certified mail of the transfer and provide the new owner's name and address. Separately, the incoming owner, assignee, or foreclosure purchaser bears an affirmative duty to obtain all security deposits and accrued interest from the transferring party.
Plain English — not legal advice.
Property owners and managers subject to N.J.S.A. 46:8-1 et seq. § 46:8-20 who are selling, assigning, or otherwise conveying rental property generally ensure that all held security deposits—plus the tenants' share of accumulated interest—are transferred to the new owner or assignee at closing or within five days of deed delivery. Compliant operators also send registered or certified mail notices to each tenant identifying the new owner and their contact information. Incoming owners or purchasers at foreclosure sales typically take active steps to confirm receipt of all deposits and accrued interest from the transferring party, since the statute places an affirmative obligation on them to obtain those funds.
General guidance for property managers — not legal advice for your specific situation. Consult an attorney for advice on your case.
N.J.S.A. 46:8-1 et seq. § 46:8-20 gives tenants the right to have their security deposit—and the interest it has earned—transferred to a new owner when the property is sold, assigned, or foreclosed upon, and to receive written notice of that transfer by registered or certified mail. If a tenant does not receive such notice or believes the deposit was not properly transferred, they may have grounds to raise a violation under New Jersey's security deposit law. Tenants in this situation can explore options such as contacting a local tenant-rights organization, reaching out to New Jersey's Division of Consumer Affairs, or consulting with a housing attorney to understand available remedies.
General guidance for tenants — not legal advice for your specific situation. Consult a tenant-rights organization or attorney for advice on your case.
Generated October 6, 2026 — auto-generated, not yet human-reviewed. See /transparency for methodology.
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