Pennsylvania Security Deposit Law concerning escrow funds

Education & Training with Realty Mark Associates AB066878

I handle rental transactions as part of my practice and get asked a lot of Landlord/Tenant questions. A popular concern is on the handling of the tenant security deposit. I've paraphrased the two sections of the PA Security Deposit Law that address that issue:

Section 250.511a. Escrow funds limited

(a) No landlord may require a sum in excess of 2 months’ rent to be deposited in escrow during the first year of any lease.
(b) During the second and subsequent years of the lease, the amount required to be deposited may not exceed one month’s rent.

(c) During the third or subsequent year of a lease, the escrow funds together with interest shall be returned to the tenant in accordance with sections 511 and 512.
(d) Whenever a tenant has been in possession of premises for a period of five years or greater, any increase in rent shall not require an increase in any security deposit.

(e) This section applies only to the rental of residential property.
(f) Any attempted waiver of this section by a tenant by a contract or otherwise shall be void and unenforceable.
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Section 250.512. Recovery of improperly held escrow funds

(a) Every landlord shall within 30 days of termination of a lease, provide a tenant with a written list of any damages to the leasehold premises for which the landlord claims the tenant is liable. Delivery of the list shall be accompanied by payment of the difference between any sum deposited in escrow, including any unpaid interest. Nothing in this section shall rule out the landlord from refusing to return the escrow fund, including any unpaid interest, for nonpayment of rent or for the breach of any other condition in the lease by the tenant.
(b) Any landlord who fails to provide a written list within 30 days as required in subsection (a), above, shall forfeit all rights to withhold any portion of sums held in escrow, or to bring suit against the tenant for damages to the leasehold premises.

(c) If the landlord fails to pay the tenant the difference between the sum deposited, including any unpaid interest and the actual damages to the leasehold premises caused by the tenant within 30 days after termination of the lease, the landlord shall be liable to double the amount by which the sum deposited in escrow exceeds the actual damages to the leasehold premises caused by the tenant. The burden of proof of actual damages caused by the tenant to the leasehold premises shall be on the landlord.
(d) Any attempted waiver of this section by a tenant by contract or otherwise shall be void and unenforceable.

(e) Failure of the tenant to provide the landlord with his new address in writing upon termination of the lease shall relieve the landlord from any liability under this section. (f) This section shall apply only to residential leaseholds and not to commercial leaseholds.



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Michael J. Perry
KW Elite - Lancaster, PA
Lancaster, PA Relo Specialist

I'll be teaching property management at Suburban West and might invite you to share this with the class !!!!

Jul 27, 2010 12:38 PM #1
Suzanne Strickler
Realty Mark Associates - Havertown, PA
School is never out for the Successful.

Michael - I'd be happy to oblige you. I teach pre-licensing at Polley Associates in Newtown Square.

Jul 28, 2010 04:44 AM #2
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Suzanne Strickler

School is never out for the Successful.
Find out how to be happy in your own business.

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