Rental Deposits

You probably already know what you should do to get your rental deposit back after your lease ends. It’s a good idea to take date-stamped pictures of any existing damage when you move in, clean up thoroughly before you leave, and leave the landlord an address or instructions for where to send the returned rental deposit.  However, there are other things you should know about your rental deposit. 

In Iowa, Chapter 562A of the Iowa Code is the relevant law in landlord-tenant issues.  It’s known as the Uniform Residential Landlord Tenant Act.  You can find the full text of it here: http://www.lawserver.com/law/state/iowa/ia-code/iowa_code_chapter_562a

Rental deposits are discussed in Section 562A.12, available here: http://www.lawserver.com/law/state/iowa/ia-code/iowa_code_562a-12

You can read 562A.12 for a full understanding of the laws covering rental deposits.  Otherwise, the summary below covers the main issues.

Amount of deposit

A landlord cannot demand a rental deposit larger than two months’ rent [562A.12(1)].

Return of the deposit

A landlord must return the remaining deposit to you within 30 days of the end of the lease, as long as the landlord has a mailing address or return instructions from you.  The landlord must include a written note detailing the specific amounts and reasons for any deductions made.  If the deposit is withheld to repair the property, the statement must specify the nature of the damages [562A.12(3)(a)].

If a landlord fails to return the deposit and a written statement detailing the deductions within 30 days of the end of the lease and receiving a mailing address, a tenant can recover the entire rental deposit from the landlord [562A.12(4)].  Tenants can do this by filing in small claims court, and tenants can recover the cost of filing a claim in small claims court ($85) if the judge sides with the tenant and orders the return of the deposit [562A.12(8)].  Note: even if a tenant recovers the entire deposit, the landlord can still bill the tenant for damages and other deductions that would have been taken from the deposit. 

If the landlord is not given a mailing address or return instructions for the deposit within one year of the end of the lease, the tenant will have forfeited their right to the deposit and the landlord can keep the entire amount [562A.12(4)] 

Reasons a landlord may deduct from the deposit

A landlord may make deductions from the deposit for a few reasons.  The rental deposit can be used to remedy a tenant’s failure to pay rent or other costs like utilities [562A.12(3)(a)(1)].  The landlord can use the deposit to recover expenses incurred in forcing a tenant to surrender the premises at the end of a lease [562A.12(3)(a)(3)].  Most likely, the deposit will be used to restore the property to its condition at the beginning of the lease, excluding ordinary wear and tear [562A.12(3)(a)(2)].  This means the landlord can withhold the deposit if you damage the property, but not if the damage was a result of the normal and ordinary use of the premises.  For example, it’s legal for your landlord to charge you for carpet cleaning to remove stains from pets or spilled drinks. It’s not legal for your landlord to force you to pay for professional carpet cleaning for just normal wear on the carpet. In fact, the recent case of DeStefano v Apartments Downtown decided that automatic carpet cleaning lease agreements are unenforceable.  We’ll make a post about that soon!

In a case concerning the rental deposit, the landlord has to prove the reasons for withholding the deposit [562A.12(3)(b)].  If the landlord retains portions of the deposit in bad faith, the landlord will be subject to potential punitive damages amounting to no more than two months’ rent in addition to actual damages [562A.12(7)].  This means if the landlord knew the deduction was illegal, the tenant can recover the deduction AND up to two months’ rent as a legal punishment to the landlord.   

If you think your landlord will violate the law in using or returning your deposit, tell your landlord about it in writing and feel free to cite this article or 562A.12.  By informing your landlord about the law, it will make it more likely that a judge would rule the landlord acted in bad faith.  Plus, it might help you avoid going to court in the first place by negotiating with your landlord instead. 

Remember, this is just a basic explanation of the Rental Deposits section of the Uniform Residential Landlord Tenant Act.  If you have any questions about this entry, or are worried your lease/landlord may be in violation of the Act, contact Student Legal Services!

Tags: ,

Site created by Student Life Marketing + Design