Permits tenant to make rent payment into escrow account in event of persisting serious hazard in dwelling unit or to make repairs and deduct cost from future rent.

2026-2027 Regular Session Introduced by Angela McKnight

Allows tenants to escrow rent or perform repairs and deduct costs after notice for persistent serious habitability hazards.

Introduced in the Senate, Referred to Senate Community and Urban Affairs Committee

Overview

Bill S 3995 (New Jersey, Session 222) would modify rent payment rules and tenant remedies in residential rental units when a serious habitability hazard persists. It creates mechanisms for tenants to protect themselves by placing rent in an escrow account or by repairing and deducting costs from future rent, after proper notice and a reasonable repair window. The act would supplement Title 2A:42 of the Revised Statutes andtakе effect next month after enactment.

Main purpose and intent

Provide tenants with a formal process to address persistent habitability hazards in rental units.

Allow rent payments to be placed in escrow or allow repairs funded by the tenant when the landlord fails to remedy serious hazards.

Protect tenants from eviction consequences when using escrow or repair-and-deduct remedies for habitability issues.

Key provisions and changes

1) Definitions
- Defines “serious hazard affecting habitability” or “serious hazard” to include deficiencies in vital facilities such as:
- Mold
- Unsafe staircases
- Missing or nonfunctional locks
- Broken toilets
- Lack of hot or cold water
- Lack of electricity
- Broken heating system
- Other deficiencies in vital facilities

2) Escrow of rent payments
- A residential tenant may remit rent payments into a separate escrow account if, after notifying the landlord and allowing a reasonable repair period, a serious hazard persists in the dwelling unit or on the property.
- Upon completion of repairs, the tenant must provide due payments to the landlord from the escrow account.
- Using escrow to withhold rent due to a serious habitability hazard shall not be grounds for eviction as a default or other eviction grounds.

3) Repair-and-deduct by the tenant
- If a landlord fails to repair necessary habitability-related facilities after written notification and a reasonable repair period, the tenant may arrange for the repairs and deduct the cost from rent, up to four months’ worth of rent under the lease terms.
- Deducting repair costs shall not be grounds for eviction as a rent-default or other eviction grounds.

4) Procedural notes
- Before applying escrow or repair-and-deduct remedies, tenants must provide written notification detailing the serious hazard and allow a reasonable time for repair.
- The act emphasizes that these remedies are in addition to, not a replacement for, existing tenant rights.

5) Effective date
- The act takes effect on the first day of the first month after enactment.

Who and what is affected

Residential tenants with serious habitability hazards in their units or on the property.

Residential landlords responsible for maintaining habitable living conditions.

The court-ordered eviction framework remains, but eviction grounds related to rent defaults would not apply when escrow or repair-and-deduct remedies are used as specified.

Procedural/timeline aspects

Written notification to the landlord is required, followed by a reasonable repair period.

Escrow arrangements and repair-and-deduct actions are allowed after the hazard persists beyond the notification-and-timeframe window.

Repairs must address the specified serious hazards before funds are released or deductions are applied.

The bill clarifies eviction protections when these remedies are used.