Security Deposit information needed

[snowmountains]

I've never heard any tenant upon moving out getting back more than his original security deposit (deposit + interest). Does it really happen in reality?

[bentlebee]

Originally Posted by New Jersey Photographer

Hi, I'm looking to rent an apartment in a 2 family house. Is there an escrow service or somewhere I can put my security deposit in so the landlord can get the deposit he's asking for, but can't take it out unless I agree to? Is there something that exists like a two party signature service ? Lately I've seen several landlords going into foreclosure and bankrupt, especially with the economy, and had a friend lose his security deposit because of a similar situation.

Most Real estate brokerages whom also do property management will have the sec.deposit in escrow accounts

BTW any home owner who you can look up in the public records who has never had liens, or foreclosures on their record, are the ones you want to rent from...

[STT Resident]

Originally Posted by ssww

I've never heard any tenant upon moving out getting back more than his original security deposit (deposit + interest). Does it really happen in reality?

As noted earlier, interest on a security deposit isn't a "given". In some states, LL's are required to return the security deposit within 30 days of quit. They must notify the tenant in writing of any deductions for damages and provide receipts for repair of same.

If the LL fails to provide such an itemization within 30 days but refuses to return all or part of the security deposit, the tenant can go to small claims court and in some states is entitled to collect twice the amount of the original security deposit. So, yes, it can and does happen in reality.

[Lacerta]

Originally Posted by ESFP

The landlord must put any security deposit in its own account, separate from any other money, within a certain amount of time (like 2 weeks or so).

In some states, not all

Originally Posted by johnsonkk

Not only is your landlord required to put the security depost in the bank, they are required to pay a nominal amount of interest while it sits in the bank.

Again, in some states, not all.

Originally Posted by bentlebee

Most Real estate brokerages whom also do property management will have the sec.deposit in escrow accounts

I'm not sure why this would make any difference. My company is a real estate brokerage who does property management and we are not required by state law to keep security deposits in separate escrow accounts, so we don't. We couldn't put the deposits into our real estate escrow account anyway, because it is strictly monitored by state law as to exactly what you can do with it. Maybe a real estate company would be more likely than the average Joe to know and follow the local laws, and that is what you meant?

[kodaka]

I've never heard any tenant upon moving out getting back more than his original security deposit (deposit + interest). Does it really happen in reality?

I did once. I was pretty shocked to receive that check, for sure. I had been living in the unit for seven years though, so the interest was more sizable than probably most tenant's interest accumulations are. It is probably easier for a landlord to hide small accumulations of rent than it is to hide a larger chunk of it. There may be some stipulations in various jurisdictions that absolve a LL from paying interest if the administrative costs of sending it to the tenant exceed the interest. I would suspect that is true for my last apartment--I only lived there a year so I can't imagine the interest was more than about $5.

[Lacerta]

Originally Posted by kodaka

I did once. I was pretty shocked to receive that check, for sure. I had been living in the unit for seven years though, so the interest was more sizable than probably most tenant's interest accumulations are. It is probably easier for a landlord to hide small accumulations of rent than it is to hide a larger chunk of it. There may be some stipulations in various jurisdictions that absolve a LL from paying interest if the administrative costs of sending it to the tenant exceed the interest. I would suspect that is true for my last apartment--I only lived there a year so I can't imagine the interest was more than about $5.

I'd be really surprised if it was even that much. How much interest are you people getting on your interest bearing accounts? I can't imagine a security deposit amount of money garnering more than a dollar over the course of 1 year in a normal account, unless it was a really big security deposit.

[SVTLightning]

The New Jersey Security Deposit law, known as The Rent Security Deposit Act, specifies how a landlord must collect, maintain, and return a security deposit. The security deposit does not belong to the landlord. It is to be held in a bank, in a separate account known as a Landlord-Tenant account or some other name.

A security deposit is made to protect the landlord against the tenant's failure to follow his or her responsibilities as stated in the lease. This includes nonpayment of rent, or damage done to the apartment by the tenant, other than ordinary wear and tear.

Read your lease first. The lease should state clearly where the landlord will hold your security deposit. It must be deposited in a "Landlord Tenant" account. The NJ Rent Security Deposit Act applies to all rental units, including tenant-occupied, single-family homes. The only exception is for rental units in owner-occupied buildings that have no more than two units other than the owner-landlord's unit.