Whether you are a landlord or a tenant, it pays to know the uses and limitations of that security deposit. A security deposit, which is usually equal to one month's rent, is intended to provide security and peace of mind for landlords whose property may be damaged by renters.
When a tenant moves out, the landlord will inspect his/her property and, if damage is found, will deduct the cost of repairs from the security deposit. The remainder will then be returned to the former tenant.
This sounds simple and straightforward, but hassles over security deposits are legion. In many cases, problems arise because one party does not clearly understand the rules and regulations surrounding this money. Here are two examples:
An older couple lived in the upper flat of a two-family home for ten years. When they recently moved to a ground floor condominium, they expected their old landlord to return a nice sum of interest, in addition to the $250 security deposit they initially paid. But this was not the case.
After checking to see that there was no damage to the apartment, the landlord returned exactly $250, because that's what the law requires. Landlords are not required to pay interest on security deposits in two family homes. In fact, they do not need to pay interest unless they have six or more rental apartments in the same building.
Jim was moving from his apartment to one which was closer to work. Money was tight and he needed the security deposit to apply to his expenses for the new apartment.
But it took his first landlord two weeks to complete a check of the premises. Jim had to borrow money from friends in order to make his move. Jim didn't feel that what his landlord did was fair. But it was legal.
The law is somewhat vague on this point, stating only that landlords must return security deposits within "a reasonable time." An unwritten consensus seems to be that this time should certainly not exceed 30 days.
Why would some landlords keep the security deposit two or more weeks after tenants leave? One Buffalo landlord cites these examples:
"I checked one of my apartments with a departing tenant and things were in good shape," he said. "So I returned her deposit immediately. But a few days later, when the smell of a room deodorizer wore off, I noticed a stench from a bedroom carpet. She had kept her dog in there and the odor was unbearable. I tried to eliminate the smell with strong shampoo and cleaners, but had no luck. I had to buy a new rug for the room."
Another time he discovered burn marks in the floor under a frost-free refrigerator which had overheated because the tenant didn't clean the dust from the coils periodically. Too late, he has discovered black oil stains on a new concrete driveway, warped flooring under an unreported leak in the bathroom, gouges and cuts in kitchen formica which had been used as a cutting board. Once he found a whole attic full of junk which he had to remove after he had returned a security deposit.
"I learned the hard way," he said, "to thoroughly examine my property before I return the deposit."
Landlords may not make a deduction from the security deposit for normal wear and tear on an apartment. For example, they may not charge for repainting after a tenant moves. Nor can they withhold money for normal wear and tear on carpeting or other furnishings.
"It's important that tenants are sure they are charged only for fresh damage," says Buffalo attorney Janet McGlone. "The landlord cannot keep your deposit unless there has been actual damage to the apartment during your tenancy."
Many landlord-tenant disputes over security deposits can easily be prevented, according to McGlone, with a little pre-planning. She suggests that at the very beginning of their relationship, the two parties examine the apartment together, making a list of existing problems or items in need of repair.
Once this list is signed and dated, it will prevent misunderstandings later. For example, if a landlord says "You must pay for the cracked windowpane in the dining-room," the tenant can show him/her that the crack was listed during their initial tour.
Janet Meiselman of the Housing Assistance Center agrees that this initial list is a tenant's most important protection in security deposit disputes.
In fact, the Center will be happy to provide a room-by-room checklist suitable for tenants and landlords. It has signature spaces for both parties. To request a checklist, call 881-2200, or write the Center at 1233 Main St., Buffalo, 14209.
Questions about legal or other consumer matters? Contact Attorney Jeffrey Freedman at 608 Liberty Building, Buffalo, New York.