Last spring when the pandemic was raging and many New Jersey workers lost their jobs, Gov. Phil Murphy suspended the right of landlords to evict tenants.

Murphy also signed executive order No. 128, forcing landlords to use their tenants’ security deposits toward rent payments.

A group that represents small property owners has filed a lawsuit, claiming the Executive Order is illegal and unfair.

According to Jared McClain, a lawyer with the New Civil Liberties Alliance, the executive order exceeds the emergency powers granted to the governor under the New Jersey Civilian Defense and Disaster Control Acts, which gives him certain powers related to public health, but has nothing to do with rents and security deposits and landlord-tenant relationships.

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McClain said the issue is crucial because many landlords, especially small property owners, depend on security deposits.

“It’s the way they protect their property. It creates an incentive for tenants to maintain the property,” he said.

He noted security deposits also save landlords “the time and cost and futility of having to go to landlord-tenant court to try to track down tenants after they leave to pay for damage that the security deposit should have covered.”

Many landlords in the Garden State own a single property and are “reliant on rental income to cover their mortgages, to cover their property taxes," he said. “There’s no assistance available for them and the governor has just singled them out to sort of foot the bill for people who may or may not be suffering during the pandemic at all.”

The lawsuit argues that the the executive order violates the contracts clause of the New Jersey Constitution.

The suit is now in the Appellate Division of the Superior Court and McClain said briefings should be completed by the beginning of May.

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