Security Deposit Law in Pennsylvania Explained

The Landlord and Tenant Act of 1951 governs security deposits in Pennsylvania. This statute is what tells a landlord how much security deposit he can collect from a tenant, what he can do with the money once he has collected it and how soon he must return it once the tenant has vacated the property.

  • Tuesday, November 22, 2016

  General   Tips   Pennsylvania   

The Landlord and Tenant Act of 1951 governs security deposits in Pennsylvania. This statute is what tells a landlord how much security deposit he can collect from a tenant, what he can do with the money once he has collected it and how soon he must return it once the tenant has vacated the property. Security deposit law in Pennsylvania is a little confusing. Understanding and following it, however, saves headaches down the road.

How Much Security Deposit Can a Landlord Collect

How much security deposit a landlord can collect depends on the length of the lease. For the first year, a landlord can collect no more than two months' worth of rent as a security deposit. He can collect no more than one month's worth of rent for all following years. Once a tenant has occupied the property for five years, the landlord cannot increase the security deposit to keep pace with the rent amount.

How to Handle a Security Deposit

A landlord has two options when it comes to handling the security deposit money that he has collected. He can either post a guarantee bond in the amount of the deposit or he can place the money - as long as it is $100 or more - in an escrow account. He must give the bonding or banking entity's name, address and amount of the deposit to the tenant. In the 25th month of tenancy, the tenant is entitled to interest paid on the security deposit each year, less 1% that the landlord may deduct.

How Soon Must the Landlord Return the Security Deposit

A landlord has 30 days to return a tenant's security deposit after the tenant has vacated the property. If he fails to do so, then the landlord might have to pay double what he owes the tenant. If the landlord deducts cleaning or damage costs from the security deposit, then he must send a list of itemized deductions with the refund. If he does not do so, then he cannot keep any portion of the deposit. If the tenant does not give the landlord a forwarding address, then the landlord does not have to refund the security deposit.

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