In recent years, security deposit theft has become a hot topic in Cleveland. As a landlord, how do you ensure you won't be accused of it as well?
At first glance, the answer seems obvious: treat your tenants fairly. The thing is, this isn't always that simple. Ohio's security deposit laws can be stringent, and many landlords break them inadvertently.
Want to know more about Ohio's rules on security deposits? This quick guide will get you up to speed!
Ohio Security Deposit Limits
In Ohio, there's no cap on the amount you can charge for a security deposit. That said, most landlords opt to charge one to two months' rent. As far as landlord tips go, you should never go over this amount.
You may also require a pet deposit from your tenants. Again, Ohio law doesn't regulate how much you can charge for it. This can depend on:
- Number of pets
- Type/breed of the pet
- The pet's size
If the pet is a service or emotional support animal, the tenant is exempt from paying the pet deposit.
Claiming Deposit Deductions
You can only use the security deposit once the tenant's lease term has ended. The deposit can cover unpaid rent or property damage.
Unpaid Rent
First things first: a security deposit isn't a substitute for rent. If you want to deduct unpaid rent from the tenant's deposit, you'll need their consent. Otherwise, they may sue you for violating tenant rights.
If the tenant moves out while owing rent, you must go through the proper legal process to claim it. This involves providing notice to the tenant. If they still don't pay, you'll need to file for eviction in court.
Property Damage
All rental agreements should specify what counts as property damage. Some damage is the result of degradation that occurs when the rental is used as intended. This is normal wear and tear and isn't deductible.
If a tenant is responsible for property damage, you can use their deposit for repairs. This can happen due to:
- Accidental damage
- Neglect or carelessness
- Intentional destruction
Returning the Deposit
In Ohio, you must complete all deposit refunds within 30 days of the lease terms end date. If you've used the deposit for any purpose, you must notify the tenant. You'll also need to provide an itemized list of charges.
Your tenant must provide an address where you'll mail these items and any related paperwork. If they don't do that, they won't have legal grounds to file a lawsuit against you.
Accrued Deposit Interest
Ohio law doesn't compel landlords to pay interest on security deposits. The only exception is if you have a tenant stay in your rental for 6+ months and demand a deposit larger than $50 or a single month's rent.
In this situation, you'll need to pay five percent interest annually.
Security Deposits and You
Understanding Ohio's security deposit laws is essential for running a rental business. Don't want to keep track of all these rules? Consider hiring a property management firm to manage your property instead.
At PMI CLE eAgent, we can help you handle security deposits and any other part of your rental business! If you're unhappy with our services, you can cancel your agreement within 30 days of signing it with no penalties.
Get in touch with us right now!
