Tenants who move into new rental properties provide security deposits to their landlords. The security deposit helps ensure that the renter pays rent on time and avoids unnecessary damage to the property while living there.
It also helps provide a little financial help to the landlord if the tenant chooses to break the lease early, without notice. The landlord will return the security deposit after the tenant moves out, so long as the property remains in good condition and the tenant does not owe him or her any money. On the other hand, the landlord can keep a portion or all of the security deposit to handle repairs to the property if the tenant does damage the property significantly in some way.
Washington, D.C. has several specific laws that govern security deposits, how they work, and their eventual return to ensure fairness to both tenants and landlords. Here is a little more information about those laws and their impacts.
1. The Security Deposit Must Not Exceed a Single Month’s Rent
The landlord can choose to ask for less than a month’s rent for the security deposit, but cannot ask for more than a single month’s rent as the security deposit. Most D.C. landlords simply ask for a month’s rent as a security deposit.
2. The Landlord Must Place the Security Deposit in an Escrow Account
Landlords cannot hold on to the security deposit or place the money in their own accounts, but must instead deposit the security deposit into a neutral escrow account. The landlord has just 30 days after the tenant pays the deposit to place the funds in an appropriate account. This account must exist solely for the purpose of holding security deposits, and should not be used for any other purpose. The landlord can use the same escrow account for more than one unit, but should not take out more than the security deposit for a single unit to make repairs or handle problems.
3. There Are Rules That Govern How Landlords Handle Inspections That May Determine Their Ability to Keep Security Deposits
To keep the tenant’s security deposit, the landlord must start with a notice to conduct an inspection. The inspection must be conducted three days before or after the tenant’s departure from the property, and the landlord must provide 10 days’ advanced notice — in writing — of intent to conduct an inspection if the tenant still resides there at the time the inspection will be conducted.
During the inspection, the landlord can go over the property to determine potential problems like damage to the flooring, walls, or appliances, among other areas. He must then must put down in writing any plans to keep money from the deposit for repairs on the property. The landlord must issue notice (also in writing) within 45 days of the tenant vacating the premises that must either be delivered in person to the tenant or via certified mail to the tenant’s last known address.
4. The Security Deposit, or Any Money Remaining After Taking Care of Repairs, Must Be Returned to the Tenant Within 45 Days of the Tenant’s Departure
If the landlord does not return the security deposit at this time, the tenant can take legal action against the landlord. Any money taken from the deposit must be recorded in an itemized list that shows exactly how those funds were used.
5. The Landlord Can Use the Security Deposit to Take Care of Repairs to the Property Required by the Tenant’s Actions
Leases include tenants’ responsibilities with regard to taking care of the property they are renting. Some things break down over time through natural wear and tear. Carpeting might need to be replaced after several years of daily foot traffic, for example, while appliances may naturally break down with age or as models become obsolete and unrepairable.
The landlord can withhold a tenant’s deposit when the need for repairs goes beyond normal wear and tear. This might include appliances that break down following a tenant’s irresponsible activities or damage that goes beyond daily use. A tenant might be charged if he did not clean an oven to the point that it can no longer be sanitized and must instead be replaced, for example. Likewise, if the tenant failed to take care of basic maintenance or to notify the landlord of necessary repairs — which often ends up leading to bigger problems — the landlord can take the required funds out of the tenant’s deposit.
The landlord cannot charge the tenant for repairs that arise due to weather emergencies or natural disasters, however: Storm damage, a tree falling on the roof, or flooding are examples that would not be the responsibility of the tenant.
Damage to the property that can be covered by the security deposit includes negligence and accidental damage as well as deliberate damage. It also includes damage caused by guests to the property. For example, if a guest’s child breaks a window playing baseball outside, the tenant can be held responsible for the damages.
6. The Landlord Can Withhold Some of the Deposit for Cleaning
The landlord cannot withhold the security deposit for normal cleaning tasks done between tenants — hiring a housekeeping service for basic cleaning and vacuuming, for example — or as things wear out over time, but he or she can withhold part of the security deposit for cleaning needs that go above and beyond normal. Grime-crusted appliances and bathtubs, urine stains from pets, stains on the walls from hanging plants, and other damage caused by tenant neglect, rather than ordinary wear and tear, can all be deducted from the security deposit.
Security Deposits Exist for a Reason
Both tenants and landlords should familiarize themselves with D.C. security deposit laws and their limits. Security deposits protect landlords by preventing excessive damage to the property and giving them more wiggle room to make needed repairs caused by tenant negligence. They also protect tenants by preventing them from facing excessive fees issued by their landlords after their time in a specific property.
A property manager can help landlords determine how best to manage their security deposit needs, including ensuring they are properly managing those funds in their neutral escrow accounts.