Part II of FAQs: Rent Control Laws And Security Deposits

Every landlord should familiarise himself / herself with the manner in which legally valid leases or rental agreements can be drawn up, including how rent control laws work.

Ques. How Do Rent Control Laws Work?
Ans. Only five American states, those of California, the District of Columbia, Maryland, New Jersey, and New York have laws limiting the rental amount to be legally charged by landlords. They have rent control ordinances, alias rent stabilization, or maximum rent regulation that limits the number of times and situation types a landlord is allowed to raise a tenant’s rent with impunity. As well, a good many of these rent control laws require a legal or just cause i.e. good reason for a landlord to terminate any unwanted tenancy. For example, a tenant refusing to pay rent, or a landlord wanting to offer the rental unit to a family member are considered just causes for ending tenancies under rent control laws.

Landlords and tenants residing either in New York City, Newark, San Francisco, or other cities with rent control laws in place, should read and understand the most recent copy of the state’s rent control ordinance, including other regulations, so as to keep themselves informed, as to what is permissible in the state, where their rental property is located. They can acquire a current copy by getting in touch with the local rent control board, or by contacting the mayor or city manager’s office.

Ques. What is the permissible amount a landlord can charge as security deposit, and what can it be used for?
Ans. Every state makes provisions for landlord to collect security deposit, every time a new tenant moves in. A number of states limit the amount landlords can charge, and usually not more than one or two months worth of rent is allowed, with the exact amount depending on the state the landlord’s rental property is located in. Many states require landlords to keep the security deposit money in a separate account, with the landlord paying back the interest accrued on the deposits.

Landlords are allowed to use the security deposit to cover any unpaid rent or necessary repairs or cleaning, resulting from tenant mis-use, but not normal wear and tear. For instance, a landlord is not allowed to withhold a tenant’s security deposit to pay for house cleaning, carpet cleaning, or repainting unless and until all these chores became necessary, due to a tenant’s unreasonable use of the rental. To play it safe, so that the tenant does not sue for the security deposit, record the condition of the rental property when a tenant moves in by using a move-in checklist and/or taking photographs of the property.