Worried about the security deposit limits in your state? Read through to know more about this caution deposits with the landlords and what are the rules around these deposits.
Security deposits are a mandatory requirement when you lease or rent out a property. It is deposited with the landlord to make sure the tenant honors the terms of the rental agreement. It may also cover the damages that may be caused by the tenant to the property. Individual states in the US have imposed legal limits on the maximum amount that can be collected as security deposits from tenants. However, Ohio state laws do not have any regulations on the maximum amounts. Let’s look at some of the general practices in the security deposits in the state of Ohio.
Ohio laws on Security Deposit.
What is the maximum amount that can be collected as a deposit?
As we discussed earlier, there is no legal limit on the amount that can be collected as a deposit from the tenant. However, landlords will receive one or two months’ rent as a security deposit.
Can the tenant earn interest on the deposit?
While there are no laws in the maximum amount of security deposits, the law states that the landlord has an obligation to pay interest on the amount exceeding $50 or one-month’s rent (whichever is higher) if the rental period exceeds more than 6 months. The payment of interest can vary on an annual basis.
What is the rate of interest that is payable to the tenant?
Law states that the landlord will have to pay interest at the rate of 5% p. an on the total amount of security deposit.
Is a deposit receipt required?
Though it is not mandated by law, both the landlord and the tenant should have one. Moreover, both parties signing the rental agreement will validate the security deposit provisions (for evidence in case of legal issues).
What is the timeline for the return of the deposit?
The landlord has to return the security deposit to the tenant within 30 days of him moving out of the premises after making any legitimate deductions. A written notice of the itemized deductions has to be sent to the tenant’s new mailing address. It should also mention the total amount due. For this, the tenant should furnish with the landlord the new mailing address, failure to do this shall forfeit the legal rights of the tenant in case the landlord fails to return the deposit.
What are the allowable deductions from the deposit?
A landlord can recover the following amounts relating to the rental arrangement from the deposit amount.
Past due rent
if the tenant has not paid the rent of any month during the rental period, it can be recovered.
If the accommodation has become untidy during the occupancy period by the tenant, the cost towards restoring the tidiness of the accommodation can be deducted from the deposit amount.
Damages caused to the premises other than normal wear and tear
If the tenant has caused any physical damages to the rental property, it will be an allowable deduction. The landlord can also recover any monetary damages which arise out of non-compliance with the rental terms and conditions.
Unpaid Utility Bills
If the tenant has left without paying the last month’s utility bills such as electricity, water, etc. can qualify for a deduction from the return amount.
If the tenants have been delaying the rent payments, the landlord can charge late fees on the amount. The landlord can minus this amount from the deposit.
What happens if the Landlord fails to return the deposit?
In case the landlord fails to return the deposit after the 30 days, even after the tenant has furnished the forwarding address, he/she can approach the law for getting his dues, including damages and attorney fees.
How is the security deposit treated when the Owner transfers/sells his property?
There are two options the landlord can choose:
- He can return the amount to the tenant and inform the owner about the amount being returned.
- The landlord can also transfer the amount to the new owner and let the tenant know about the new arrangement.
- Return: https://www.nerdwallet.com/blog/loans/how-to-get-apartment-security-deposit-back/
- Laws: http://codes.ohio.gov/orc/5321.16