State Tenant Laws
Tenant laws vary widely between states. Some jurisdictions are landlord friendly, with rules that make it easy for property managers to run their businesses. Other jurisdictions are tenant friendly, with rules designed to protect renters but that may make it difficult for property managers to deal with problematic tenants.
One area where there is a lot of variation is deposits. Most property managers require a deposit because they’ve seen the damage tenants can do – from stained carpets and holes in the wall to more egregious, sometimes baffling, damage.
In addition, some property managers may treat deposits as another fee they have no intention of refunding – although some states have created rules to stop this. For example, many states limit the size of the security deposit that landlords can charge and may have specific rules for pet damage.
In addition, states frequently legislate how quickly the landlord needs to refund the security deposit and may have rules requiring landlords to provide itemized lists of deductions or other notices. According to Nolo, Arkansas gives landlords 60 days, California gives landlords 21 days, and Hawaii only gives landlords 14 days. In Florida, landlords have 15 to 60 days, with the number depending on whether the tenant disputes the deductions. (Note that laws are subject to change – see your state’s current legal codes for up-to-date information.)
What Happens When Landlords Breach Deposit Refund Laws?
If a landlord does not refund the security deposit by the state deadline, the tenant may have the right to file a lawsuit. Tenants may also be entitled to claim a larger amount than the original security deposit.
For example, in California, tenants can sue for the amount of the deposit as well as two times the amount of the security deposit in damages. The judge may also give the tenant additional damages if the judge believes the landlord acted in bad faith. In small claims court, the maximum amount a tenant can sue for is $12,500.
Other State Tenant Laws
Other deposits are a common source of landlord–tenant disputes, but they are not the only potential issue. For example, landlords may also be required to refund rent if the lease is terminated early. State law frequently requires landlords to provide receipts for rent and deposits. Even if this is not a requirement, proper records are important in case there are any disputes in the future.
How Can Landlords Increase Compliance with State Tenant Laws?
To avoid expensive lawsuits and negative reviews, property managers should comply with all relevant state tenant laws, including those governing security deposits and refunds.
- Know the laws in your state. Tenant protection laws are often very detailed, meaning it’s important to read all relevant codes and seek legal advice if you have any questions or concerns. As state legislation is subject to change, property managers should stay informed of new laws.
- Review your rental agreements. Leases never supersede state law. However, having a contract that clearly lays out each party’s rights and responsibilities and that is in compliance with state law helps landlords avoid disputes.
- Choose a payment service provider that helps you comply. A payment service provider that makes it easy to offer full or partial refunds will help you stay compliant. The payment service provider should also support multiple payment channels and prioritize security.
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