Landlord and Tenant Law

It's quite common for landlords to require their tenants to pay a security deposit at the beginning of the lease. This makes economic sense. Landlords often don't discover that the tenant has damaged the rental unit until the end of the lease when the tenant is gone and often hard to find. The security deposit can offset some or all of any damage caused by a tenant, but in most states, the law involving security deposits is very complicated, and many landlords unknowingly violate the law.

Depending on the state, even an unintentional violation of the security deposit law can have serious consequences. For example, in my state, Massachusetts, even an unknowing violation of the security deposit law can sometimes result in triple damages and the requirement that the landlord pay the tenant's attorney's fees. Although the requirements of security deposit law vary widely from state to state, a couple of common principles apply.

For instance, although tenants are required to pay the security deposit to the landlord, the law of most states deems the security deposit to remain the property of the tenant, not the landlord. This means that the landlord can't commingle security deposits in with his or her own funds. Security deposit money must be held separately. Obviously therefore, more laws follow, concerning the type of bank account, into which a landlord must place his or her security deposits.

Most states also require that landlords accepting security deposits engage in particularized record keeping. While the degree of record keeping varies form state to state, most states require that landlords give receipts for their security deposits and maintain paperwork involving banking information, financial information supporting the use of security deposits to make repairs, and the nature of the damage to which the security deposit is being applied. My best advice to landlords who intend to accept security deposits is to consult an attorney experienced in the landlord-tenant law of your state.

Once you know and understand how the security deposit laws work in your state, you will be able to avoid the pitfalls that uninformed landlords encounter. My advice to tenants is that you too should learn the law of security deposits in your state. Again, most states consider the security deposit to be your money and you should take reasonable steps to protect your deposit. Once again, an experienced landlord-tenant attorney in your state is the person best qualified to render competent advice on security deposits.


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