Each state has different laws that regulate how property owners handle the security deposits of their residents. These laws limit how much an owner can charge, establish guidelines for deductions due to damage beyond normal "wear and tear", detail where the money must be deposited and how it must be handled, and outline the timeline for the deposit's return once a tenancy ends.
As an Owner or Operator, How Does this Affect My Business?
Owners and operators should be aware of the laws and guidelines regarding security deposits in the states they operate. Failure to adhere to security deposit laws can result in financial penalties of two to three times the deposit amount. In addition, some third party companies offer security deposit alternatives such as surety bonds or security deposit insurance products. Owners and operators should be aware of state and local regulations regarding these 3rd party financial products and understand how they are used.
To learn more about this issue, please contact Ben Harrold, Manager of Public Policy at NAA.