Pennsylvania Security Deposit Law for Landlords and Tenants

Posted in Blog  
  on Mar 29, 2016

Section 250 under Pennsylvania law covers what landlords and tenants need to know about how a security deposit works in relation to a rental agreement.

Here are some of the key points you'll want to know, but make sure to review these laws yourself or seek professional assistance with any specific questions you may have.

1. A Security Deposit Cannot Be More Than 2x The Monthly Rent.

This rule applies to new renters and those who have rented the same location for up to 12 months.

Once a tenant occupies a unit for a second year, the deposit must be reduced to the same amount as the monthly rent.

At month 24, the escrow amount must be returned with interest when the tenant moves out.

2. Security Deposits Are Held In Escrow.

Unlike other states that allow a landlord to co-mingle security deposit funds, Pennsylvania requires all deposits to be held in escrow.

This means that a security bond can act in lieu of of a security deposit as long as the guarantee is issued by a bonding company that is authorized to do business within the state.

3. Any Security Deposit Worth $100 Or More Earns Interest.

Although interest is earned on the amount, there is a fee of 1% taken for administrative costs for holding the account in escrow.

Anything remaining after this fee is then send to the tenant annually on the anniversary of their lease signing.

4. Funds Must Be Returned Within 30 Days.

If a landlord refuses to release escrow funds within 30 days of a tenant moving out, then they forfeit all rights to make a claim on the amount or to sue a tenant for damages caused to the premises.

If claims are made, they must be itemized and sent in writing to the tenant within 30 days or the landlords loses the ability to make a claim.

Any funds not paid within the required period of time also makes a landlord liable for up to 2x the amount that is in question.

By understanding the section of code under Pennsylvania law that deals with security deposits, the relationship between a landlord and tenant has more certainty.

Review these key points today so that you won't be stuck with a financial headache in the future.


Related

Most Important Landlord Tenant Laws in Texas

When it comes to having a tenant for the first time, it can be pretty daunting because you are going to be the corresponding landlord and a new relationship will emerge, which will need time to grow... More


The Landlord Tenant Board: What it is and When it is Needed

Many times, there are issues between a landlord and a tenant that need to be resolved but are failed to do so, because both parties have gone too far with their actions, and have retaliated in the... More


The Landlord Tenant Laws in California

The landlord and tenant laws in California are literally the same as they are in any other state. These laws, rules and regulations are put into practice because they uphold an order, a discipline,... More


Understanding the Landlord Tenant Laws in Illinois

People are aware that there are different rulings in each state with reference to the landlord/tenant laws. The state of Illinois also has a set of laws. These rules and regulations are basically... More


How to Create a Residential Lease Agreement

Where there is a landlord, there will also be a tenant, and it is no surprise that these two parties can only work together once there is some sort of agreement, contract or a binding deal in place.... More


The Best Sites for Rental and Lease Agreement Templates

Many landlords find it difficult to write and draft a lease agreement. Since every State has its own general template, it can also be difficult to make sure your lease agreement meets all the criteria... More


The Landlord Tenant Act: What Landlords Need to Know

All landlords know that before they can formally become a landlord there are a lot of things they need to understand. Landlords and tenants cannot act as such without any legal bodies involved. That... More


5 Landlord Forms that Every Landlord Should Have

When it comes to being a landlord, one should know that it is not for the unprepared individual. This should be clear that being a landlord does not simply mean that you will be taking the rent and... More


Landlord Obligations: The Responsibilities of a Landlord

Becoming a landlord is a major deal and no one can simply get up and think, “well, yes I think I should be a landlord and rent out my flat.” If you are thinking that you would like to be a landlord,... More


The Best Landlord Associations for Landlords to Join

If you’re a landlord and want to manage your business in a better way, you should endeavor to get in touch with those industry experts who have the experience and the skills to help you do it. This is... More