Today’s Topic: Security Deposits

The new landlord tenant law sets out rules with regard to how landlords must handle the security deposits collected from tenants. The entire section dealing with security deposits is included below, but here are a few important points.

• The landlord usually cannot collect more than one month’s rent as a security deposit.
• The landlord may collect a pet deposit or other similar deposit if the tenant’s plans for the property increased the potential risk to the landlord.
• The landlord must return the security deposit to the tenant within 35 days of the end of the tenancy or they can be required to pay the tenant two times the original deposit.
• The landlord must provide the tenant a written itemization of amounts withheld from the security deposit within 35 days of the termination of the tenancy even if the tenant does not provide a forwarding address.
• If the tenant does not claim the money due from the deposit within six months of the end of the tenancy, the tenant’s deposit can be forfeited.
• Mailing the statement to the rental address can satisfy the law’s requirements if the tenant fails to give a forwarding address.
• The landlord can apply the security deposit to unpaid rent or other damages so long as the tenant is given the itemization of the amounts withheld.

§ 35-9A-201. Security deposits; prepaid rent.

(a) A landlord may not demand or receive money as security, in an amount in excess of 1 month’s periodic rent except for pets, changes to the premises, or increased liability risks to the landlord or premises, for tenant’s obligations under a rental agreement.

(b) Upon termination of the tenancy, money held by the landlord as security may be applied to the payment of accrued rent and the amount of damages that the landlord has suffered by reason of the tenant’s noncompliance with Section 35-9A-301 all as itemized by the landlord in a written notice delivered to the tenant together with the amount due 35 days after termination of the tenancy and delivery of possession.

(c) If the landlord does not refund the entire deposit, the landlord, within the 35-day period, shall provide the tenant an itemized list of amounts withheld.

(d) Upon vacating the premises, the tenant shall provide to the landlord a valid forwarding address, in writing, to which the deposit or itemized accounting, or both, may be mailed. If the tenant fails to provide a valid forwarding address, the landlord shall mail, by first class mail, the deposit or itemized accounting, or both, to the last known address of the tenant or, if none, to the tenant at the address of the property. Any deposit unclaimed by the tenant as well as any check outstanding shall be forfeited by the tenant after a period of 180 days.

(e) The landlord’s mailing by first class mail to the address provided in writing by the tenant, within 35 days of the refund or itemized accounting, or both, is sufficient compliance with this chapter.

(f) If the landlord fails to mail a timely refund or accounting within the 35-day period, the landlord shall pay the tenant double the amount of the tenant’s original deposit.

(g) This section does not preclude the landlord or tenant from recovering other damages to which the landlord or tenant may be entitled.

(h) The holder of the landlord’s interest in the premises at the time of the termination of the tenancy is bound by this section.