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How to protect yourself and your security deposit

By Brett Baber

Posted on Monday, March 28th, 2005, 12:00 am

If you are one of the many students renting off-campus, chances are you were required to provide your landlord with a security deposit. This security deposit can be used by the landlord to cover any unpaid rent or damages caused during your tenancy. The amount of security deposit required by a landlord cannot exceed two months rent.

Once the landlord receives the security deposit, the landlord is required to place the funds into an account separate from any personal assets. As a tenant, you have the right to request that the landlord provide you with the name of the institution and the account number where your security deposit is being held. The security deposit is held in this account until the end of your tenancy, unless the landlord transfers or sells your rental unit to another.

Upon a transfer or sale of the rental unit, the landlord is required to either transfer your security deposit to the new owner or return the security deposit to you. If the landlord elects to transfer the funds to the new owner, the landlord must mail to you notice of the sale, the new owner’s name and address, and the amount of security deposit transferred. Once transferred, the new owner assumes all responsibility for your security deposit.

Typically, once paid, the security deposit is forgotten about until it’s time to move. Once you have vacated the apartment, the landlord has 30 days to return your security deposit, or 21 days if you’re a tenant without a written lease. The landlord can withhold from your security deposit amounts for unpaid rent, damage in excess of normal wear and tear such as worn flooring or chipping paint, removal of trash or personal property and cleaning if the apartment is left in an uninhabitable condition. The amount your landlord can collect from you is not limited to the amount of your security deposit, and your landlord can sue you for any excess amount owed. If your landlord withholds any amount from your security deposit, the landlord must send to your last known address a written statement itemizing the reason for withholding, along with payment for the remaining balance.

There may be instances when a landlord fails to return a security deposit or provide an itemized withholding statement within the specified time limit. Should this happen, the landlord’s right to withhold any portion of the security deposit is forfeited, and you should request the prompt return of your security deposit. This request should be in writing and sent via certified mail with a return receipt requested. The return receipt will be your evidence the landlord received your letter. The landlord has seven days from the date of receipt to respond to your request. If, after the seven days, your landlord has not refunded your security deposit, or you think the landlord withheld too much, you can sue your landlord in small claims court, or seek the help of an attorney. The court may award you double the amount of your security deposit if it finds that your landlord acted wrongfully by not returning your security deposit after you sent the request. You can also request attorney fees and court costs.

It is important to note that if you rent an apartment in an owner-occupied building with five or fewer units, the Maine statutes that set forth the rules relating to security deposits on residential rental units and that were the basis for the above discussion do not apply. You still have similar rights and can sue in small claims court, but instead of double damages and costs, the court would award whatever it thought was fair based upon your agreement with the landlord.

To protect yourself from ending up in small claims court, there are several steps you can take to protect your security deposit. Prior to moving in, you and landlord should inspect the apartment together. If your landlord won’t agree to this, take along a witness or photograph or video tape the condition of the apartment. During the inspection make a list of all defects. Give a copy of this list to your landlord and keep a copy for yourself. Any damages occurring during your tenancy should be reported to your landlord immediately. When it comes time to move out, be sure to clean the apartment and remove all your property. Once this is done, do another inspection with your landlord. Hopefully, this will facilitate the return of your security deposit and prevent any surprise deductions.