Tenant demands interest on Security Deposit

Tenant demands interest on Security Deposit by Anonymous on June 16, 2012 @08:38

This is the second month ia a row tenant has been late. She paid the rent but did not include the late fee. I gave her a waring that if the late fees are not paid in 7 days she will be facing eviction. The tenant wrote me a letter insisting on interest she earn on security deposit for the past 2 1/2 years and wants to deduct it from late fees. I answered her saying interest will be addressed when she moves out. Is there ever a senario in which it make sense for a landlord to pay interest on Security Deposit yearly?

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Re: Tenant demands interest on Security Deposit by Jake on June 16, 2012 @09:44	[ Reply ]

"Is there ever a senario in which it make sense for a landlord to pay interest on Security Deposit yearly?" Some states require the deposit to be in a separate interest bearing account. What does your lease say about the late fee. Does it say that the fee becomes added rent? Post a Pay or Quit notice on your tenant's door and mail another by certified mail. If the rent is late a third month you can begin an eviction for chronic late payments. So waiting until next month to take action may solve your question about evicting for the late fee.

Re: Tenant demands interest on Security Deposit by Betty L on June 16, 2012 @11:36	[ Reply ]

Yes, some States require the landlord notify the tenant of any interest the tenants security deposit earned. What State are you in?

Re: Tenant demands interest on Security Deposit

Re: Tenant demands interest on Security Deposit by Anonymous (New York) on June 16, 2012 @14:06	[ Reply ]

The rules are different in every state. Hear in NY we are required to pay the same interest rate the banks give us but the state allows us to take a 1 percent service fee. The end result is if you follow these rules you would have to request a deposit from the tenant once a year to make up the reduction in the balance. I know of no one who follows this rule. They just do not give tenants interest on their deposit.

Re: Tenant demands interest on Security Deposit by Micah on June 16, 2012 @15:56	[ Reply ]

Considering that most bank savings account interest rates are 0.25% I'd hand it over just to see the look on their face when they get less than a $10.00!

Re: Tenant demands interest on Security Deposit by Anonymous on June 16, 2012 @16:39	[ Reply ]

I would tell her lateness will end up with a pay or quit notice, and if the money is not paid, you do not back down from the pay or quit notice. The late fees are enough to allow you to hang the pay or quit notice. Here is your opportunity to be rid of her.

Re: Tenant demands interest on Security Deposit by Kristina (CA) on June 16, 2012 @19:44	[ Reply ]

Charge her for whatever late fee and just give her the interest. Think of it this way...do you think it's fair for landlords to be holding all this $$$ to invest and profit from? I know interest if very low now but it is respectful to not take the dividends from that money. It's a nice thing to do.

Re: Tenant demands interest on Security Deposit

Re: Tenant demands interest on Security Deposit by Gerry (Arizona) on June 17, 2012 @20:51	[ Reply ]

LOL. Banks don't give interest nowadays. She'll be lucky if she get's a few pennies knocked off.