May 21, 2014
Lease says landlord can keep my security deposit when I move out
Dear Consumer Ed:
I found an apartment I really like. The landlord wants me to sign a lease that would allow him to keep my security deposit when I move out, even if I stay for the full lease term (one year), give him 60 days' notice that I do not wish to renew the lease, and there are no damages to the apartment. Is that legal?
Consumer Ed says:
No, that's likely not legal. Under Georgia law, if a tenant gives proper notice and vacates the unit without owing any rent or damages, the landlord must return the full security deposit to the tenant within thirty days.
A security deposit is a form of security (typically money) that the tenant gives to the landlord at the beginning of the lease. It's meant to protect the landlord if the tenant vacates the unit without making required payments, or if the tenant damages the unit beyond normal wear and tear. A security deposit can include damage deposits, advance rent deposits and pet deposits, but it does not include non-refundable fees or amounts that are applied toward payment of rent, services or utilities provided to the tenant. Application fees or deposits to hold an apartment until you actually sign a lease are not considered security deposits, and are usually not refundable if you choose not to move into the unit.
Under Georgia law, a landlord who owns more than ten rental units or who has a management agent should place your security deposit in a bank escrow account, used only for security deposit funds. The landlord must let you know in writing the location of the escrow account. Instead of an escrow account, the landlord has the option of posting a bond with the superior court in the county where the rental unit is located. The bond is to make sure security deposits are returned to tenants if the landlord goes bankrupt or if the property is foreclosed.
Additionally, under Georgia law there is a process that landlords should follow before collecting your security deposit at the beginning of the lease, and prior to returning any portion of the security deposit owed at the end of the lease:
- At the start of the lease and before paying a security deposit, the landlord should give you a complete list of any existing damage to the unit for you to keep for your records. Before moving into the unit, you have the right to inspect it to make sure the list of existing damage is accurate. Both you and the landlord should sign the list of existing damage - this will show what damage existed at the time you moved in.
- Within three days after your lease ends, the landlord should inspect the unit and compile a list of any damage done to the unit during your lease beyond normal wear and tear. The landlord should include the estimated dollar value of the damage that he intends to withhold from your security deposit (if any). You have the right to inspect the unit within five days after the end of the lease to check the accuracy of the landlord's list. If you agree to the damage listed, both you and the landlord should sign the final damages list. If you refuse to sign it, you must state in writing the items on the list that you do not agree to and sign the statement. If you dispute the accuracy of the landlord's final damage list, you can take the landlord to court to try to recover the portion of your security deposit withheld.
- Within 30 days of the end of the lease, the landlord must return the security deposit. If any portion of the security deposit is withheld, within 30 days of the end of the lease the landlord should provide you with a written statement listing the exact reasons for retaining the amount, and a refund (if any) of the difference between the security deposit you paid and the amount retained.
You may wish to seek legal advice if your landlord improperly keeps any part of the security deposit which should be returned to you. If the landlord keeps the money without proper cause, he would be required to return the amount withheld, and may have to pay an additional penalty.
A Few Tips When Signing a Lease:
- Before paying any deposit or fee, get in writing what the payment is for and under what terms the payment will be refunded.
- Ask if any application fee or holding deposit charged will be applied to your first month's rent or to your security deposit if you sign a lease and move in.
- Always get a receipt for any deposit or fee that you pay.
- If a fee is refundable, ask the landlord to put that information on the receipt.
- Remember, your written lease should clearly set out your responsibilities and the responsibilities of your landlord. It provides the best protection for both of you, so make sure to read it carefully before signing it, and keep a copy of it in a secure place.
- Educate yourself! The Georgia Department of Community Affairs offers information and general advice to Georgians with questions about residential landlord/tenant issues in The Georgia Landlord Tenant Handbook. It's a good source of information and answers many frequently asked questions.