SECURITY DEPOSIT QUIZ

1.  What is the legal interest rate which must be paid on security deposits today?

a.  4%

b.  3%

c.  1% below the current statement savings rate

d.  Whatever the lease says

 2.  How long do you have to issue refunds / notices of forfeiture?  

a.  30 days to report damages, 45 to return excess funds

b.  45 days to report damages and return excess funds

3.  Mark each statement “T” for True or “F” for False

True    False      a.  Landlords MUST give a receipt for security deposits

True    False    b.  Security deposits must remain in the State of Maryland

True    False    c.  Pet Deposits may be on top of the maximum Security Deposit

True    False    d.  It is okay to charge first month’s rent, last month’s rent and two months’  deposit

True    False     e.  Tenants have the right to be present for the final inspection IF they request, in writing, to be present   

True    False    f.  Security Deposit refunds / forfeiture notices must be sent by certified mail

4.  The clock starts ticking  

a.  When the lease is up

b.  At the end of the notice period (30 days to or from the tenant)

c.  When the tenant vacates

d.  When the landlord does the final inspection

5.  Fill-in the Blanks                   

a.  Security Deposits must be deposited in the bank withindays

b.  Final inspections must be done betweendays before the vacate date and days after the vacate date

c.  Security deposit refunds / forfeiture notices are to be sent to the tenant’s forwarding address or

6.  If a security deposit refund or forfeiture notice is returned undeliverable, the landlord should do what with the envelope?

7.  The penalty for failing to fully abide by security deposit law is:

a.  forfeiture of the landlord’s right to retain any portion of the deposit for damages, including back rent

b.  loss of the landlord’s right to seek additional damages beyond the deposit

c.  punitive damage compensation to the tenant in an amount equal to 3 times the amount wrongfully withheld

d.  all of the above

8.  Lease provisions for the security deposit, like the interest rate paid or the maximum amount of deposit, may be changed or waived:

               

a.  by having the changes clearly stated in the lease and initialed by the parties

b.  by having the tenant sign a separate statement containing the changes

c.  by act of law

9.  You are about to buy a property with a tenant already in occupancy. There is a lease. The lease says the tenant is to receive 5% interest on the deposit. Mark all statements below “T” for True or “F” for False:

True    False    a.   You must pay 5% from beginning the day the tenant moved into the property

True    False    b.  You must pay 5% from the day you purchased the property

True    False    c.  You need pay only the legal rate of interest

True    False    d.  You may modify the rate effective on the date of modification with 30 days notice, provided the lease has reverted to month-to-month

10.  Check all that would constitute a legitimate deduction from a deposit

a.  Painting, if the tenant stayed only 18 months

b.  2nd coat of paint needed to cover abnormal conditions

c.  Carpet replacement-carpet was in perfect condition and only 3 years old when tenant moved-in a year ago

d.  Roach extermination

e.  Lock changes – tenant turned-in one set of keys

f.   Replacement of the air conditioning compressor-malfunction not reported

g.  Torn screens

h.  Shrubbery trimming / Leaf removal

i.   Debris removal

j.   Eviction crew costs

Disclaimer:  As always, REIS members are advised to consult competent legal advice when in doubt.

Majerle Management, Inc and its agents are not qualified to give legal advice.

           

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Copyright © 2007 [Majerle Management, Inc]. All rights reserved.
Revised: September 17, 2007