Most residential landlords require tenants to pay a security deposit to cover any repairs needed when the tenant moves out, or to cover the tenant’s failure to pay the last month's rent.

Laws vary from state to state, but many states have statutes that provide the maximum amount of security deposit a landlord may require for a residential lease and the costs for which the landlord may use the security deposit (cleaning, repairs, unpaid rent) following termination of the lease.

These laws also provide a specific deadline (often 30-60 days) for the landlord to return the tenant’s security deposit following termination of the lease—after deducting any amount properly withheld, as allowed by law.

In New Jersey, the security deposit laws are governed by the New Jersey Security Deposit Act. The Act stipulates that a landlord can charge up to one and a half month's rent for a security deposit. Upon termination of the lease, the landlord is required to return the security deposit, minus any deductions for damages beyond normal wear and tear, unpaid rent, and other charges as specified in the lease, within 30 days. If the landlord fails to provide a written list of damages and the cost of repairs, the tenant is entitled to the return of the full security deposit. Additionally, if the landlord does not return the security deposit within the 30-day period, the tenant may sue for double the amount of the deposit, plus attorney's fees. The law also requires the security deposit to be placed in an interest-bearing account, and the interest earned is also owed to the tenant upon the termination of the lease.