How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask Alex J. Esq. Your Own Question
Alex J. Esq.
Alex J. Esq., Attorney at Law
Category: Legal
Satisfied Customers: 16273
Experience:  Experienced Licensed Attorney
Type Your Legal Question Here...
Alex J. Esq. is online now
A new question is answered every 9 seconds

I have been renting 13 years in New Jersey the first-floor

This answer was rated:

I have been renting 13 years in New Jersey the first-floor of a two family-home--not owner occupied. I've asked year after year via phone and letter to my landlord for information regarding my security deposit--what banking institution is holding it, under what name is XXXXX XXXXX held, what interest has accumulated, has the interest rate changed from what was stated in the lease. My landlord's response is that it is not in my name and I don't need to worry about it. So, how is interest calculated for a security deposit over the years? Is it calculated on a monthly basis simple interest or a yearly basis? For example, my security deposit was (is) $2,175 and the interest rate in the signed rental contract was (is) 2.5%. Do I do this math wise: $2,175 x .025 = $54.37; then $2,175 + 54.37 = $2229.37; then $2,229.37 x .025= $55.73, etc. for every month in 13 years (156 months)? Or, do I just do this calculation for 13 years, no months. So after 13 years my landlord would owe me $823.26 in interest? Thank you. Ms. Allen
Hello. My name is XXXXX XXXXX I will be happy to answer your question.

I am sorry to hear about the unfortunate situation.

Do you have a valid written lease that is current?

Does the lease states that you would accumulate 2.5% annual interest?
Customer: replied 3 years ago.

Yes, I have a valid lease. I just want to know how to calculate the interest correctly. A bank I check with said interest on a savings account, for example, is done monthly. Someone else told me to calculate the interest yearly.

Dear Allen,

Can you please tell me what exactly your written lease states regarding the interest on your security deposit?
Customer: replied 3 years ago.

I understand why you are asking me the questions. I also understand that over 13 years from 2000 to 2013 interest rates have changed. According to NJ Security Deposit law, since my landlord has not provided me with my security deposit information over the years and therefore I could not give this to my tax accountant for declare the interest as income to pay my federal tax on it, I am entitled to sue my landlord for 7% over the 13 years. I can also use my security deposit toward paying my July rent because of his negligence in this area. I just need to know how to correctly calculate the interest for a 2.5 % interest rate and a 7% interest rate in case I need to take him to small claims court. Thank you.

Dear Allen,

Most residential leases would be calculated at a simple interest rate, which would mean the interest would accrue annually and then added to the total amount of the security deposit for the next year.

So, if the security deposit is a $2000 and the interest rate is 2.5%, than at the ent of 12 months the interest of $50 would accrue and be added to the total security deposit for the amount of $2050 and in the following year it is $2050 that would be subject to 2.5%, etc...

I wish you the best of luck!
Alex J. Esq. and 6 other Legal Specialists are ready to help you

Related Legal Questions