A security deposit is money which actually belongs to the tenant, but is held by the landlord for protection against damages.

The Commonwealth of Pennsylvania does not require a tenant to pay a security deposit to his or her landlord. However, many landlords insist on one to cover damages that may occur to their property during their tenants’ stay. State laws governing the amount, handling, and return of security deposits, also known as escrow funds, do exist.

The Landlord/Tenant Act regulates security deposits and places a limit on the amount a landlord can charge.

ACCORDING TO THE LAW:

  • During the first year of a lease, a security deposit cannot be charged in excess of two months’ rent.
  • At the beginning of the second year of the lease, a landlord cannot request a security deposit that is equivalent to more than one month’s rent. Therefore, if the landlord asked for a security deposit of two months’ rent when you first signed the lease, he/she must refund the equivalent of one month’s rent at the beginning of the second year.
  • At the beginning of the third year of a lease, the landlord must put any security deposit over $100.00 into an interest-bearing bank account.
  • At the end of the third year of the lease, the landlord must start giving the tenant the interest earned by the account, minus a 1% fee which the landlord may retain.
  • After five years the landlord cannot increase a security deposit even though the monthly rent may have been increased.

When you first move in, request that the landlord go through the property with you and together determine any damage which will be subtracted from your security deposit. Also, make a list of any existing damages and repairs that need to be made. (This move-in checklist is provided for your use). Keep a copy of the list, give one to the landlord and attach a copy to the lease. Such records will assure that the security deposit will be applied only to damages for which you are responsible.

There are several steps involved in getting your security deposit refunded:

  • In order to get the money returned, the tenant must give the landlord a forwarding address and return the keys to the property.
  • Within 30 days after the tenant moves out the landlord must either:
  1. Return the security deposit, or
  2. Send the tenant a list of damages, the cost of repairs, and any money remaining from the security deposit.
  • If the landlord does not provide a written list of damages within 30 days, he/she gives up the right to keep any part of the security deposit. The tenant may take two approaches to finding a remedy to this situation:
  1. The tenant can sue to recover the deposit without the landlord being able to raise any defense, or
  2. The tenant can sue for double the amount of the security deposit. In this case the landlord can counterclaim for damages to his or her property.

If you are experiencing any landlord-tenant problems, contact the local Consumer Protection Agency at 871-4371.