Owning and maintaining a home now costs Americans over $18,000 yearly. However, if you rent out your properties in Chester County, PA, and your tenants damage them, you could end up paying more than that.
Requiring security deposits is one way to mitigate those risks.
In this landlord deposit guide, we'll discuss the most crucial facts you need to know about these payments. Read on to discover what you can use them for and how to remain in compliance with state and local rental laws.
1. Allowed Uses
As a Chester County, PA landlord, you can require your tenants to make security deposits to protect yourself against possible renter damage. The County's rental deposit rules also let you withhold the funds for unpaid rent. Likewise, you can use the money to cover any damages or losses resulting from your tenant breaching the lease agreement.
2. Maximum Amount
The maximum security deposit you can require a tenant to make is two months' rent on their first year of tenancy. You must reduce this to one month in the subsequent years they renew their lease.
3. Escrow Account Requirement
Like elsewhere in Pennsylvania, Chester County landlords must use an escrow account for their tenants' security deposits.
An escrow account is a bank account that holds funds in a neutral location. It makes the renters' security deposits accessible if tenants have to move out.
4. Pet Security Deposit
In the U.S., 72% of renters own pets. So, allowing pets on your property can significantly expand your tenant pool. However, doing so also comes with the risk of pet-caused damage to your property.
Fortunately, you can require an additional security deposit from your tenants with pets. However, you must also remember one of the most crucial tenant deposit facts: the total must not exceed the maximum allowed amount.
For example, suppose you already require a security deposit equivalent to two months' rent in the first year. If so, you can no longer charge more for a pet deposit. However, you can require the pet security deposit if you only charge a month's rent.
5. Timeline for Returning Security Deposits
One of the most crucial security deposit tips is to inspect your property as soon as possible after your tenant leaves. That way, you can immediately discover if there's any damage beyond normal wear and tear. If there's none, you must return the deposit to your previous renter within 30 days from the end date of their lease.
Even if there's significant damage, you'll have enough time to calculate the repair costs and deduct them from the security deposit. Don't forget you must notify your tenant in writing an itemized list of the deductions.
Keep These Security Deposit Facts in Mind
Now you know that Chester County landlords can require tenant security deposits. You also learned the maximum amount, where to deposit it, and when to return it. So, use this knowledge to ensure you comply with local and state laws when requiring these deposits.
Better yet, partner with Key PA Property Management. As a full-service property management company, we can help with all your rental business's needs, from marketing to tenant screening, rent collection, and security deposit management.
Reach out to us today, and we'll happily give you a free property consultation!
