Ask about New Jersey's deposit cap and you'll get the right answer immediately: one and a half months' rent. What almost nobody quotes is the second sentence of the same statute — the one that governs every deposit increase after move-in. N.J.S.A. 46:8-21.2, as our verification packet quotes it:
"An owner or lessee may not require more than a sum equal to 1 1/2 times 1 month's rental according to the terms of contract, lease, or agreement as a security for the use or rental of real property used for dwelling purposes. Whenever an owner or lessee collects from a tenant an additional amount of security deposit, the amount collected annually as additional security shall not be greater than 10 percent of the current security deposit."
Sentence one: a genuinely flat 1.5-month cap on the initial deposit
Unlike states that tier the cap by lease type or tenancy length, New Jersey's initial-deposit cap is unconditional — 1.5 times one month's rent, for any residential tenancy the Rent Security Deposit Act covers. No furnished-unit exception, no month-to-month carve-out.
Sentence two: the 10% rule for everything after move-in
The second sentence constrains additional collections: in any year, the extra security you collect can't exceed 10 percent of the current deposit. Two things follow from the statute's structure:
- It's a separate rule, not a modifier. The 10% sentence doesn't change the 1.5-month ceiling; it governs the pace at which a deposit already below that ceiling can grow. A rent increase doesn't entitle you to true the deposit up to 1.5× the new rent in one step — the annual top-up is capped at 10% of the deposit you currently hold.
- It's the operative rule for mid-tenancy increases. The initial cap is checked once, at move-in. The 10% rule applies every time you ask a sitting tenant for additional security — so over a long tenancy with rising rent, this is the sentence doing the work.
Our New Jersey deposit calculator enforces the 1.5-month initial cap; the 10% annual-increase rule is the companion constraint to apply on top of it whenever you're raising an existing deposit.
The deposit also comes with account duties
Under N.J.S.A. 46:8-19, the deposit must be held in an interest-bearing, insured New Jersey account, with written notice to the tenant within 30 days of receipt and interest paid annually. At the end of the tenancy, § 46:8-21.1 gives the landlord 30 days to return the deposit (5 days in fire, flood, or condemnation displacement cases) — and wrongful withholding exposes the landlord to double the amount, plus court costs and, at the court's discretion, attorney fees.
How stable is this?
The cap dates to 1971 (L.1971 c.223) and was last amended in 2003, effective January 1, 2004. Our statute check for the deposit-cap verification packet found no enacted change through the current session — one recent attempt, S3185, a bill to allow a $500 pet deposit inside the cap, died in committee in the 2024–2025 session. The text above reflects the official DCA compilation as of this article's publish date.
Check your exact numbers with our New Jersey Security Deposit Limit Calculator.