Information on Ohio's Consumer Laws from Attorney Daniel Myers, Myers Law, LLC, not legal advice
Although this blog is written primarily for homeowners, we can’t forget that many people, like myself, rent apartments or homes. As renters, we have rights that need protecting, too. Recently I have been approached by numerous tenants from all around Northeast Ohio about various problems. I want to take this time to tell you renters out there about two legal rights that you have under Ohio’s Landlord Tenant Act that many people don’t know about. They involve your security deposits. These laws exist for a reason, to protect you and encourage you to go after what is yours. You can’t protect your rights unless you know them.
5% Interest on Your Security Deposit
As all renters know, your landlords usually require security deposits to be paid before you move in to your new rental. These security deposits are there to compensate the landlord for costs and expenses they incur due to the damage you cause to the rented space and secure payment of your rent. What you may not know is that if the security deposit is more than $50, and more than one month’s rent, you, as a renter, might be entitled to 5% interest per year on the amount above one month’s rent. See Ohio Revised Code Section 5321.16(A). That’s not a bad return given CD rates at local banks!
In order to qualify for this interest, you need to (1) be renting a residential apartment/house/condo from a landlord, (2) live in and be in possession of the rented area for at least 6 months, and (3) have been required to and actually did pay more than one month’s rent as a security deposit. For example, let’s say there is a house in your town that you want to rent. The rent is $1,000 a month, and the landlord requires you to pay a security deposit of $3,000. You pay the deposit, move in January 1, 2012, and move out December 31, 2012. Your landlord owed you an interest payment! The landlord should have paid you $100 in interest. The math isn’t too complicated (even for a lawyer): $3,000 (deposit) – $1,000 (one month’s rent) = $2,000 (excess deposit) x .05 (5%) = $100
This does not apply to commercial leases, and it does not apply if you do not pay the required security deposit or do not live in the apartment for at least 6 months. In order to know whether you are entitled to this interest, you need to contact an attorney and discuss your specific facts.
Getting Double Your Security Deposit Back, Plus Attorney Fees
Another situation arises when a landlord does not refund the security deposit to a tenant within 30 days of the end of the lease. According to Ohio law, a residential landlord must send a written notice itemizing all deductions and stating the amount of the refund due to the tenant within 30 days of the termination of the lease. If the tenant provided written notice of a forwarding address to the landlord, and the landlord fails to provide the itemized list and/or refund, the tenant could be entitled to not only a refund of the security deposit, but also additional damages equal to the security deposit, and attorney fees.
Using our previous example, if the tenant paid $3,000 as a security deposit to the landlord, gave the landlord a letter with tenant’s forwarding address, and landlord does not refund the money within 30 days, tenant may be entitled to double the security deposit, $6,000, plus attorney’s fees incurred in obtaining that $6,000.
This law is there to protect tenants and encourage them to go after what is rightfully theirs. Maybe your $500 security deposit isn’t enough to make a federal case out of, but if you can get $1,000 and be reimburse for any attorney fees, that doesn’t sound so bad anymore.
This gives you an incentive to hire an attorney: it increases your bargaining leverage when trying to settle the matter because the landlord may have to pay your attorney’s fees at the end of trial. If your landlord is rational he may wish to settle before he is on the hook for more and more attorney fees. Settling for $3,000 before trial is a lot less expensive for the landlord than paying $3,000, plus your attorney’s fees, plus his own attorney’s fees, after trial.