When can a landlord keep some of the security deposit? Can a tenant earn interest on his deposit? When is it due?
Here are answers to those questions under Washington, D.C. law.
How much can the security deposit be in DC? How often can it be collected?
Landlords cannot collect more than one month's rent for a security deposit. They can only collect a deposit once per lease.
Where does the money go?
Landlords must hold the money in a trust account. The account needs to bear interest, payable to the tenants when they move out. Landlords owning multiple units may hold all their tenant's deposits in one account.
Wait, a landlord owes the tenant interest for the deposit?
Yes, at the prevailing interest rate. Landlords must also post a notice in the building informing tenants where the money is being held and what the interest rate is. Landlords are often unaware of this requirement.
When must the landlord return the deposit?
The landlord must act within 45 days after the lease ends. He has two options:
- He may return the entire security deposit with interest; or
- He may keep some or all of the deposit and write a letter to the tenant stating his reasons for keeping the money.
If the landlord is keeping the money due to damage to the unit, he must write another letter within 30 days providing an itemized list of all the repairs. Failure to inform the tenant creates a presumption that he wrongfully withheld the money. Tenants who do not get their money back or a letter of explanation should contact a lawyer.
Under what circumstances can a landlord keep some of the security deposit?
There are three reasons a landlord can keep some of the security deposit:
- The tenant still owes rent. The landlord may subtract the rent owed from the deposit and return the rest to the tenant.
- The tenant has damaged the unit beyond usual "wear and tear." The landlord may use the deposit to pay for the repairs. But he must provide the tenant with an itemized list of all repairs. The tenant should review the list to make sure it is correct.
- The tenant left without giving 30 days notice and does not have a fixed-term lease. The landlord may only charge rent for the days that the unit is empty. Once the landlord rents it out to another person, he no longer has a right to rent from the previous tenant.
In addition, if the landlord keeps the deposit in bad faith, the tenant can collect three times the amount in question. For example, if the landlord keeps $1,000 just because he did not like his tenant, the tenant can sue the landlord and potentially collect $3,000.
This is only a broad overview of law and is not legal advice. If you think you were wrongly denied a security deposit or are being sued to collect a security deposit, contact an attorney to review your case and determine the best plan of action.