Owner Update “Question of The Month”

Q: Am I permitted to collect a security deposit on the Voucher program?

A. Yes, owners can and usually do collect a security deposit when renting to TMHA Voucher holders. The rules governing security deposits are stated in Ohio Revised Code 5321.16. Beyond the lease and state law, HUD does not impose additional regulation on security deposits. You should know, however, that HUD does not provide funds to pay for security deposits. The voucher-holder tenant is responsible for paying the deposit. In this area, one month’s rent is generally charged as the deposit.

In regard to payment of security deposits, voucher-holders who are eligible may be able to get funds from Job & Family Services. However, this funding seems to come and go depending on the State budget. There have also been some reports of people getting help with security deposits from local church groups, but there does not seem to be much consistency to this resource. Sometimes people do have a difficult time coming up with the security deposit. In some cases, owners have permitted tenants to make installment payments, but that arrangement is strictly up the owner.

TMHA does ask about the amount of the security deposit at time of HUD lease and HAP Contract signing, so that it can be recorded in the file. This is the case whether the tenant is just moving in, or has been in tenancy prior to voucher subsidy being initiated on the unit.

Some significant ORC laws regarding security deposits are:

SD cannot be “automatically” retained at move-out by the owner.

SD must bear interest at the rate of 5% per annum IF the SD exceeds one month’s rent (or $50, whichever is greater), and if the tenant remains in tenancy for 6 months or more.

ORC states any interest required to be accumulated in the preceding bullet must be paid to the tenant “annually.”

At move-out SD can be applied to past-due rent and damages.

“Damages” are regarded by courts to be unit damage that goes beyond normal wear and tear. Courts regard wear and tear use as something that the owner should take care of as a cost of doing rental business. Example: carpet that shows some traffic area dirt and wear is normal; owner cleans it. Carpet that shows stained areas that have not been cleaned and cigarette burns to the carpet is damage; owner charges for cleaning/repair. If unsure, take pictures before cleaning and charging the tenant.

SD’s must be returned within 30 days of the end of the lease agreement. Any deduction from the SD must be itemized and identified by the owner in a written notice to the tenant . The remainder of the SD is returned, or the amount still owing for damages is identified with a request for payment.

ORC specifies that the tenant “shall” provide in writing a forwarding address or new address where the written notice can be sent.

Owner failure to comply with the SD law can result in legal action by the tenant to recover the money not returned along with a damage judgment in the amount equal to the amount withheld, plus reasonable attorney fees.

Results

At the end of each day, you should play back the tapes of your performance. The results should either applaud you or prod you.

The greatest form of maturity is at harvest time. This is when we must learn how to reap without complaint if the amounts are small and how to reap without apology if the amounts are big.

Life asks us to make measurable progress in reasonable time. That's why they make those fourth grade chairs so small – so you won't fit in them at age twenty-five!

There are some things you don't have to know how it works - only that it works. While some people are studying the roots, others are picking the fruit. It just depends on which end of this you want to get in on.

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