Ohio security deposit rules: return deadline, interest and deductions

The 30-day deadline

Ohio’s deposit rules sit in one section of the Revised Code, § 5321.16. Division (B) sets the deadline: any deduction is itemized in a written notice and delivered to the tenant together with the amount due, within thirty days after termination of the rental agreement and delivery of possession.

Both events have to happen before the 30 days run. A tenant whose lease ends June 30 and who hands back the keys that day is owed the notice and the amount due by July 30. If the tenant stays past the end of the lease and gives back possession on July 10, the 30 days run from July 10 and end on August 9.

The section doesn’t name a delivery method, and it doesn’t say that a postmark on or before the 30th day counts. It says the notice is delivered to the tenant within the 30 days.

Deadline

Within thirty days after termination of the rental agreement and delivery of possession. Ohio Rev. Code § 5321.16(B)

What goes to the tenant

A written notice that itemizes and identifies each deduction, together with the amount due. Ohio Rev. Code § 5321.16(B)

Delivery method

The statute names none. It says the notice is “delivered to the tenant.” Ohio Rev. Code § 5321.16(B)

No waiver

No provision of the landlord and tenant chapter may be modified or waived by an oral or written agreement. The one exception lets a landlord take over a tenant duty listed in § 5321.05. Ohio Rev. Code § 5321.13(A)

The 5% interest rule

Division (A) puts interest on larger deposits. A deposit in excess of $50 or one month’s periodic rent, whichever is greater, bears interest on the excess at 5% a year if the tenant remains in possession for six months or more. The interest is computed and paid annually by the landlord to the tenant.

Example: rent is $1,000 a month and the deposit is $1,500. One month’s rent is greater than $50, so the excess is $1,500 minus $1,000, which is $500. Five percent of $500 is $25 a year. A $1,000 deposit on the same unit has no excess, so the statute puts no interest on it.

The rate is written into the statute and doesn’t change from year to year. The section doesn’t name a kind of bank account for deposits and doesn’t say on what date in the year the interest is paid.

Which deposits earn interest

A deposit in excess of $50 or one month’s periodic rent, whichever is greater. Interest runs on the excess, not on the whole deposit. Ohio Rev. Code § 5321.16(A)

Rate

5% a year. Ohio Rev. Code § 5321.16(A)

Length of stay

Applies if the tenant remains in possession of the premises for six months or more. Ohio Rev. Code § 5321.16(A)

Payment

Computed and paid annually by the landlord to the tenant. Ohio Rev. Code § 5321.16(A)

How the deposit is held

The statute names no special account, escrow or bond. Ohio Rev. Code § 5321.16

What can be deducted, and the itemized notice

When the rental agreement ends, the deposit may be applied to two things: past due rent, and the damages the landlord has suffered because the tenant didn’t follow § 5321.05 or the rental agreement. Section 5321.05 is the list of tenant duties, such as keeping the unit safe and sanitary, disposing of garbage, using plumbing and electrical fixtures properly and not damaging the premises on purpose or through negligence.

Section 5321.16 doesn’t use the phrase “normal wear and tear” and has no list of allowed charges. Its test is damage the landlord suffered from the tenant’s noncompliance.

Every deduction is itemized and identified in the written notice. Example: on a $1,500 deposit with $250 of past due rent and $150 to repair a door the tenant broke, the notice shows both lines, $400 in total, and the amount due is $1,100. Any interest owed under division (A) is separate from these deductions.

Past due rent

The deposit may be applied to it when the rental agreement ends. Ohio Rev. Code § 5321.16(B)

Damages

The amount of damages the landlord has suffered by reason of the tenant’s noncompliance with § 5321.05 or the rental agreement. Ohio Rev. Code § 5321.16(B)

Tenant duties

Keep the premises safe and sanitary, dispose of rubbish, keep plumbing fixtures clean, use fixtures properly, and refrain from destroying, defacing, damaging or removing any part of the premises. Appliances supplied by the landlord are the tenant’s to maintain if a written rental agreement says so. Ohio Rev. Code § 5321.05(A)

Itemized notice

Any deduction shall be itemized and identified by the landlord in a written notice. Ohio Rev. Code § 5321.16(B)

What counts as a deposit

Any deposit of money or property to secure performance by the tenant under a rental agreement. Ohio Rev. Code § 5321.01(E)

The tenant’s forwarding address

The same division puts one duty on the tenant: to give the landlord, in writing, a forwarding address or new address where the notice and the amount due may be sent. The section sets no deadline for the tenant to do this.

A tenant who doesn’t give the address isn’t entitled to the damages or attorney’s fees in division (C). The section doesn’t say the tenant loses the deposit itself, and it doesn’t say the landlord’s 30 days wait for the address.

Tenant’s duty

Provide the landlord in writing with a forwarding address or new address to which the notice and amount due may be sent. Ohio Rev. Code § 5321.16(B)

No address given

The tenant shall not be entitled to damages or attorney’s fees under division (C). Ohio Rev. Code § 5321.16(B)

Penalty for keeping a deposit wrongfully

If the landlord fails to follow division (B), the tenant may recover the property and money due, together with damages in an amount equal to the amount wrongfully withheld, and reasonable attorney’s fees. The section doesn’t ask whether the landlord acted in bad faith.

Example: a landlord keeps $400 of a $1,500 deposit that the tenant didn’t owe. The tenant may recover the $400, plus another $400 in damages, $800 in total, plus reasonable attorney’s fees.

A lease can’t add its own attorney’s fee clause. The chapter says no agreement to pay the landlord’s or tenant’s attorney’s fees is recognized in a residential rental agreement, so the fees in a deposit case are the ones § 5321.16(C) gives.

Money due

The tenant may recover the property and money due. Ohio Rev. Code § 5321.16(C)

Damages

An amount equal to the amount wrongfully withheld. Ohio Rev. Code § 5321.16(C)

Attorney’s fees

Reasonable attorney’s fees, on top of the money due and the damages. Not available to a tenant who didn’t give a forwarding address in writing. Ohio Rev. Code § 5321.16(C)

Fee clauses in a lease

No agreement to pay the landlord’s or tenant’s attorney’s fees is recognized in a residential rental agreement. Ohio Rev. Code § 5321.13(C)

Deposit size, local rules and rentals this page doesn’t cover

Chapter 5321 sets no limit on the size of a deposit. The interest rule is the one place where size matters: the part above $50 or one month’s rent starts earning 5%. The chapter also has no section on deposit receipts, move-in inspections or what happens to deposits when a rental is sold.

Cities, counties and townships can’t pass a measure that conflicts with the chapter or that regulates rights and obligations the chapter already regulates. Local housing, building, health and safety codes are not preempted.

The chapter covers residential premises, and its definition leaves out several kinds of housing, listed below. Manufactured home park lots have their own deposit section, § 4781.50, with the same 30 days, the same 5% interest rule and the same damages. Subsidized housing programs can add deposit rules on top of state law.

Limit on amount

The statute sets no limit. Ohio Rev. Code ch. 5321

Local rules

No political subdivision may adopt or enforce a measure that conflicts with the chapter or regulates the rights and obligations of parties to a rental agreement that the chapter regulates. Housing, building, health and safety codes of a political subdivision are not preempted. Ohio Rev. Code § 5321.19(A), (B)(1)

Not residential premises

Hotels, motels and similar places of transient occupancy; hospitals and licensed nursing homes; farm residences rented with two or more acres for agricultural production; an owner’s occupancy of a condominium unit; emergency shelters run by 501(c)(3) organizations. The definition lists ten exclusions in all. Dwelling units owned or operated by a college or university are covered. Ohio Rev. Code § 5321.01(C)

Manufactured home parks

Within thirty days after termination of the rental agreement and delivery of possession; 5% a year on the excess above $50 or one month’s periodic rent. Ohio Rev. Code § 4781.50