N.J. Stat. Ann. § 46:8-1 et seq. § 46:8-25
Unlawful diversion of trust funds; penalty
Operative Text
Any person party to said contract, lease or agreement, or any agent of said person, or any officer of a corporation receiving said moneys, who, with knowledge that such moneys constitute trust funds, unlawfully diverts or consents to an unlawful diversion of such moneys shall be a disorderly person and subject to a fine of not less than $200.00 or by imprisonment for not more than 30 days, or both. L.1967, c. 265, s. 7, eff. Jan. 1, 1968.
Under N.J.S.A. 46:8-1 et seq. § 46:8-25, any party to a rental contract, lease, or agreement—including agents and corporate officers—who knowingly diverts or approves the unlawful diversion of funds that are held in trust commits a disorderly persons offense. The provision establishes both a monetary fine of at least $200 and the possibility of up to 30 days of imprisonment, or both, as consequences for such conduct. This rule reflects New Jersey's treatment of tenant-deposited funds as trust funds that must not be misappropriated.
Plain English — not legal advice.
Property owners and managers operating under N.J.S.A. 46:8-1 et seq. § 46:8-25 are generally expected to maintain tenant trust funds—such as security deposits—separately and to use them only for lawful purposes. Compliant operators typically keep clear records showing that these funds have not been commingled with operating accounts or otherwise redirected. Agents and corporate officers who handle such funds share responsibility under this provision and are subject to the same disorderly persons penalties.
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. § 46:8-25 establishes that tenants' funds held in trust carry legal protections, and the knowing misuse of those funds by a landlord, agent, or corporate officer is a criminal offense under New Jersey law. Tenants who believe their deposited funds have been unlawfully diverted may consider filing a complaint with local law enforcement or the appropriate county prosecutor's office, since this provision creates a disorderly persons offense. Consulting a tenant-rights organization or legal aid office can help clarify what documentation and steps are generally available in such situations.
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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