When a tenant moves into a new rental property, that tenant will provide a security deposit to the landlord. The security deposit helps ensure that the renter will pay rent on time and avoid 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. Once the tenant moves out, if the property remains in good condition and the tenant does not owe the landlord money, the landlord will return the security deposit.
On the other hand, if the tenant does damage the property significantly in some way, the landlord can keep a portion or all of the security deposit to handle repairs to the property.
In order to ensure fairness to both tenants and landlords, Washington, DC has several specific laws that govern security deposits, how they work, and their eventual return.
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 DC 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 simply hold on to the security deposit, nor can they place the money in their own accounts. Instead, security deposits go in an escrow account. The landlord has just 30 days after the tenant pays the deposit to place the deposit 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 in order to make repairs or handle problems with that unit.
3. There Are Specific Rules That Govern How the Landlord Can Handle an Inspection That May Determine His Ability to Keep a Security Deposit
In order to keep the tenant’s security deposit, the landlord must start with a notice to conduct an inspection. The inspection must be conducted within three days before or three days after the tenant’s departure from the property, and the landlord must provide notice of intent to conduct an inspection 10 days in advance, if the tenant still resides in the property at the time of the inspection. This notice must be provided in writing. During the inspection, the landlord can go over the property to determine any potential problems with it, including damage to the flooring, walls, appliances, or other areas of the property.
Once the landlord determines whether the property has any damage, the landlord must put down, in writing, any plan to keep money from the deposit in order to pay for repairs on the property. The landlord must issue notice within 45 days of the tenant vacating the premises in writing. This notice must either be delivered in person to the tenant or delivered 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 Tenant’s Security Deposit to Take Care of Repairs to the Property Required by the Tenant’s Actions
When a tenant signs a lease, it includes the tenant’s responsibilities with regards to taking care of the property. Some things break down on a property over time through natural wear and tear. Carpeting, for example, might need to be replaced due to simple wear over several years, while appliances may naturally break down over time.
The landlord can withhold a tenant’s deposit when the need for repairs goes beyond normal wear and tear. This might, for example, include broken appliances, or significant damage to flooring. The landlord cannot charge the tenant for repairs needed due to weather emergencies or natural disasters: storm damage, a tree falling on the roof, or flooding, for example, are not the responsibility of the tenant.
The deposit can, however, be used for repairs required by the tenant’s neglect: if the tenant did not clean an oven to the point that it must be replaced, rather than cleaned, for example. Likewise, if the tenant failed to take care of needed maintenance or notify the landlord of needed repairs, leading to bigger problems, the landlord can take those funds out of the tenant’s deposit.
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 that simply need to be done between tenants or as things wear out over time, but the landlord can withhold part of the security deposit for cleaning needs that go above and beyond normal: grime-crusted appliances and bathtubs, urine stains, stains on the walls from hanging plants, and other damage caused by tenant neglect, rather than by ordinary wear and tear.
Both tenants and landlords should familiarize themselves with DC security deposit laws and their limits. Security deposits protect both landlord and tenants by preventing excessive damage to the property and allowing landlords to make needed repairs caused by tenant negligence, while still preventing tenants from facing excessive fees from their time in a specific property. A property manager can help landlords determine how to manage their deposit needs, including managing those security deposits in an escrow account as needed.