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Pet Deposit for one Dog

As a Landlord in the State of New Jersey, am I allowed to collect a pet security deposit of $500.00 in case the dog causes damages, like chewing of doors, urinating on rugs, digging holes on the property, etc.?  Recently, a friend of mine told me that it was illegal to collect a pet deposit, therefore, I was unaware of this fact and wanted to check it out to find out the validity of that statement.
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There is nothing written that the landlord cannot collect a pet fee in NJ,  They may also make it non-refundable and may use it to go toward any wear and tear caused by the animal. However be sure that with the pet fee and security deposit it does not exceed 1.5 months rent.
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