If a landlord or property manager is collecting a security deposit (which they should be), the landlord and tenant must have a written lease agreement specifying all of the terms and conditions under which the deposit can be withheld upon the termination of the lease.
At the inception of the lease, the landlord and the tenant must also complete, sign, and date a written checklist or statement describing the existing condition and cleanliness of the property, including any fixtures, equipment, appliances, and furnishings. It is good practice to include photos within the written statement, although photos are not expressly required.
If a landlord collects a deposit without providing a written statement at inception, the landlord is liable to the tenant for the amount of the deposit, plus attorneys fees and costs.
The security deposit must also be held in a trust account separate from the landlord's operating account. The tenant must also be notified in writing of the name and location of the financial institution holding the deposit.
Within 30 days after the termination of the lease, the landlord must give the tenant a statement describing the basis for retaining any of the deposit, together with payment of any excess of the deposit. The statement must include invoices or estimates for any repairs.
Non-Refundable Fees
A landlord must distinguish between a refundable security deposit and any other non-refundable fees. If a landlord collects a non-refundable fee such as a cleaning fee, there must be a written lease clearly specifying that the fee is non-refundable.
If a landlord fails to provide a written lease specifying that the fee is non-refundable, the landlord is liable to the tenant for the amount of the non-refundable fee.
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