What to Know About Your Security Deposit
The Rent Security Deposit Act applies to all rental units, including tenant-occupied, single-family homes. The only exception is for rental units in owner-occupied buildings that have no more than two units other than the owner-landlord’s unit. However, the law does apply even to tenants in these small, owner-occupied buildings if the tenant sends a 30-day written notice to the landlord stating that he or she wants the landlord to comply with the law’s provisions.
Notice of Security Deposit
A Landlord is required to keep the security deposit in a separate interest-bearing bank account. Notice must be provided to the tenant within 30 days of the transfer of the deposit providing the name and address of the bank, the amount, the type of account and the interest rate in writing. A notice of the amount of interest must be sent every year.
A new landlord is required to provide notice within 30 days of closing.
Your Right to Use the Security Deposit
If you do not receive notice of your security deposit as a tenant, you can provide your landlord with written notice requesting that your security deposit be used to pay rent. The notice must be sent via regular and certified mail.
Upon receipt of notice from the tenant a landlord has 30 days to pay the interest or give the annual notice.
*Note: The name and address of the bank may be located in the body of the lease, this is considered sufficient notice. As a tenant, you should call the bank to verify that the deposit has been made, if there has been no deposit you may proceed with sending a notice to your landlord requesting that the money be applied to rent.
Limit of Deposit
The amount of security deposit that can be collected by a landlord is limited to one- and one-half times the monthly rent. Landlords can ask for additional amounts as they increase the rent, however, they cannot collect more than 10 percent of the current deposit in one year.