With any landlord tenant dispute, the lease agreement should be reviewed carefully to explore all rights and remedies before taking any courses of action. If you are involved in an eviction situation, or if you are in doubt about your rights as a landlord or tenant concerning discrimination, deposits, habitability, repairs or breaking a lease, contact one of our attorneys for guidance.
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A security deposit (sometimes referred to as a damage deposit) is a sum of money that a landlord may charge a tenant to ensure that the rented property is not damaged or to ensure that the tenant does not default in any payments. A security deposit is not the same as rent because a security deposit is money owned by the tenant (not the landlord). At the conclusion of the tenancy, the deposit is to be returned to the tenant with interest unless there has been an authorized deduction to address repairs. In the first year of a residential lease, the landlord may not charge a security deposit that is greater than twice the monthly rental amount. At the beginning of the second year of a lease, the landlord must return any deposit amount that exceeds the value of one month's rent.
Interest on Security Deposit.
In Pennsylvania, a security deposit of greater than $100 is required to be held in a Federally regulated escrow account and the landlord is required notify each of the tenants in writing, giving the name and address of the banking institution in which such deposits are held. Furthermore, if the funds are held for more than two years, they must be placed in an interest bearing escrow account. As an alternative to maintaining the funds in an interest bearing escrow savings account, a landlord is permitted to secure those sums with a bond, however, the interest must still be awarded to the tenant. At the end of each rental year, the landlord is required to pay interest dividends to the tenant.
Failure to Return A Security Deposit.
Within thirty (30) days of the termination of a lease, a landlord must provide a tenant with a written list of any damages to the premises for which the landlord claims the tenant is responsible. Delivery of that list shall be accompanied by payment of the security deposit (plus interest) less any deductions for damages. A landlord who fails to provide a written list of damages within thirty (30) days could forfeit all rights to withhold any portion held in escrow or to bring suit against the tenant for damages to the premises. A landlord who fails pay the escrow amount (i.e. deposit plus interest) within thirty (30) days can be liable to the tenant for double that amount. In order to invoke these protections against the landlord, the tenant must first inform the landlord in writing of his or her new address at the time the lease ends.
When the Landlord Fails to Make Repairs
A tenant has certain rights when the landlord refuses to make repairs to anything that affects the habitability of the premises; however, there are certain procedures that should be followed by the tenant to protect these rights. Tenant should document the problem (ideally with a photograph). A landlord should be given prompt notice (ideally in writing) before tenant takes any action. That notice should describe the problem and give the landlord a reasonable period of time to make the repair (generally 30 days). If landlord still refuses to make the repair, tenant may: (1) escrow the rent and withhold payment until the repair is made; (2) escrow the rent use those sums to hire somebody to make the repairs or (3) consider the lease broken under a constructive eviction theory. Keep in mind, whether the landlord is correct (or not) any of these remedies could cause the landlord to sue tenant in retaliation seeking eviction and payment of the remainder of rents for the lease term. A successful landlord can also garnish your wages. It is important that you speak to an attorney to address these concerns. Also keep in mind, any withheld rents must be kept in a federally insured escrow account opened at the bank. The account must be titled as an escrow account.