Reminder to PA Residential Landlords - Security Deposits


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What are the requirements under the Pennsylvania Landlord Tenant Act with respect to security deposits:

Deposits Required to be Placed in Escrow:  Pursuant to the Pennsylvania Landlord Tenant Act, 68 P.S. 250.101 et seq. (the "Act"), all funds over $100 deposited with a landlord to secure the execution of a rental agreement on residential property shall be deposited in an escrow account of an institution regulated by the Federal Reserve Board, the Federal Home Loan Bank Board, Comptroller of the Currency, or the Pennsylvania Department of Banking.  68 P.S. 250.511b(a).  When any funds are deposited in any escrow account, the landlord shall notify each of the tenants in writing, giving the name and address of the bank in which the deposits are held and the amount of such deposits.  Id. A landlord may, in lieu of depositing escrow funds, guarantee that any escrow funds, less cost of necessary repairs, including interest thereon, shall be returned to the tenant upon termination of the lease, or on surrender and acceptance of the leasehold premises.  Id. at 250.511c.  The guarantee of repayment of the escrow funds shall be secured by a good and sufficient guarantee bond issued by a bonding company authorized to do business in Pennsylvania.  Id. 

2. Amount of Deposit Permitted:  During the first year of a lease, no landlord may require a sum in excess of two months' rent to be deposited in escrow for the payment of damages to the leased premises and/or for default in rent .  I.d. at 250.511a(a).  During the second and subsequent years of the lease, or during any renewal, the amount required to be deposited may not exceed one months' rent.  Id. at 250.511a(b).  These provisions of the Act may not be modified by contract.  See id. at 250.511a(f).

3. Requirement to Return Deposits / Landlord Liability:  Every landlord shall, within 30 days of termination of a lease or upon surrender and acceptance of the leased premises, provide tenant with a list of any damages to the premises for which landlord claims tenant is liable, along with return of the escrow deposit, less the actual amount of damages to the premises.  Id. at 250.512(a).  However, the landlord is not precluded from refusing to return the escrow funds for nonpayment of rent or for breach of any other condition in the lease by tenant.  Id.  Any landlord who fails to provide a written list within 30 days forfeits all rights to withhold any portion of sums held in escrow or to bring suit against the tenant for damages to the premises.  Id. at 250.512(b).  If the landlord fails to pay the tenant the difference between the sum deposited in escrow and the actual damages to the premises caused by tenant within 30 days after termination or surrender and acceptance of the premises, the landlord shall be liable in assumpsit to double the amount by which the escrow funds, including any unpaid interest thereon, exceeds the amount of actual damages to the leased premises.  Id.  The burden of proof of actual damages caused by the tenant shall be on the landlord.  Id.  However, failure of the tenant to provide the landlord with his new address in writing upon termination of the lease or upon surrender and acceptance of the premises shall relieve the landlord from any liability under Section 250.512 of the Act.  Id. at 250.512(e).  

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