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Security deposits for rental agreements in Pennsylvania

On Behalf of | Apr 2, 2021 | Real Estate Law

Pennsylvania state law dictates agreements between landlords and tenants. The Pennsylvania Landlord and Tenant Act dictates what can be in a legal rental contract as well as suitable actions between the two parties outside of the contract. 

These laws determine how much a landlord may charge a renter for a deposit and what he or she may do with the deposit money. 

Cap on security deposits

In Pennsylvania, landlords may require no more than two months of rent as a security deposit, and a security deposit may accrue interest if the landlord holds onto it for multiple years. In other words, if a renter rents the same place for multiple years, the landlord may owe him both the money he paid as a deposit plus interest accrued over the time he lived in the house. 

If a landlord charges a security deposit separately for subsequent years, he or she may only charge one month’s rent. For example, if renters have lived in a rental house for a year until their rental agreement expires, and then they sign a new rental contract with a new security deposit, the landlord may only be able to charge one month of rent as a deposit instead of two. 

Limit to deposit use

Just as there are limits to deposit amounts, the law places legal parameters on what a landlord may do with the money. As FindLaw explains, a landlord may spend deposit money to cover unpaid rent, or he or she may use the deposit money to repair damages or excessive cleaning needs to the property. But this may only apply if the damages were the renter’s fault or responsibility. 

In other words, a landlord does owe renters the responsibility to care for the house and keep it in good condition. A landlord may not be able to use deposit money toward repairs that he or she was responsible for and failed to correct. And tenants may even be able to legally withhold rent if a landlord is not properly caring for the property. 

Finally, landlords should return security deposits within a month of a lease ending along with any accrued interest. Understanding the law can help avoid later disputes from both parties.