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Pennsylvania Security Deposit Law

Section 250.511a. Escrow funds limited

(a) No landlord may require a sum in excess of two months’ rent to be deposited in escrow for the payment of damages to the leasehold premises and/or default in rent thereof during the first year of any lease.
(b) During the second and subsequent years of the lease or during any renewal of the original lease the amount require to be deposited may not exceed one month’s rent.
(c) If, during the third or subsequent year of a lease, or during any renewal after the expiration of two years of tenancy, the landlord requires the one month’s rent escrow provided herein, upon termination of the lease, or on surrender and acceptance of the leasehold premises, the escrow funds together with interest shall be returned to the tenant in accordance with sections 511.2 and 5127.
(d) Whenever a tenant has been in possession of premises for a period of five years or greater, any increase or increases in rent shall not require a concomitant increase in any security deposit.
(e) This section applies only to the rental of residential property.
(f) Any attempted waiver of this section by a tenant by a contract or otherwise shall be void and unenforceable.
8 68 P.S. §250.511e.

Section 250.511b. Interest on escrow funds held more than two years

(a) Except as otherwise provided in this section, all funds over one hundred dollars ($100) deposited with a lessor to secure the execution of a rental agreement on residential property in accordance with section 511.18 and pursuant to any lease newly executed or reexecuted after the effective date of this act shall be deposited in an escrow account of an institution regulated by the Federal Reserve Board, the Federal Home Loan Bank Board, Comptroller of the Currency, or the Pennsylvania Department of Banking. When any funds are deposited in any escrow account, interest-bearing or noninterest-bearing, the lessor shall thereupon notify in writing each of the tenants making any such deposit, giving the name and address of the banking institution in which such deposits are held, and the amount of such deposits.
(b) Whenever any money is required to be deposited in an interest-bearing escrow savings account, in accordance with section 511.1, then the lessor shall be entitled to receive as administrative expenses, a sum equivalent to one per cent per annum upon the security money so deposited, which shall be in lieu of all other administrative and custodial expenses. The balance of the interest paid shall be the money of the tenant making the deposit and will be paid to said tenant annually upon the anniversary date of the commencement of his lease.
(c) The provisions of this section shall apply only after the second anniversary of the deposit of escrow funds.

Section 250.511c. Bond in lieu of escrowing

Every landlord subject to the provisions of this act may, in lieu of depositing escrow funds, guarantee that any escrow funds, less cost of necessary repairs, including interest thereon, shall be returned to the tenant upon termination of the lease, or on surrender and acceptance of the leasehold premises. The guarantee of repayment of said escrow funds shall be secured by a good and sufficient guarantee bond issued by a bonding company authorized to do business in Pennsylvania.

Section 250.512. Recovery of improperly held escrow funds

(a) Every landlord shall within thirty days of termination of a lease or upon surrender and acceptance of the leasehold premises, whichever first occurs, provide a tenant with a written list of any damages to the leasehold premises for which the landlord claims the tenant is liable. Delivery of the list shall be accompanied by payment of the difference between any sum deposited in escrow, including any unpaid interest thereon, for the payment of damages to the leasehold premises and the actual amount of damages to the leasehold premises caused by the tenant. Nothing in this section shall preclude the landlord from refusing to return the escrow fund, including any unpaid interest thereon, for nonpayment of rent or for the breach of any other condition in the lease by the tenant.
(b) Any landlord who fails to provide a written list within thirty days as required in subsection (a), above, shall forfeit all rights to withhold any portion of sums held in escrow, including any unpaid interest thereon, or to bring suit against the tenant for damages to the leasehold premises.
(c) If the landlord fails to pay the tenant the difference between the sum deposited, including any unpaid interest thereon, and the actual damages to the leasehold premises caused by the tenant within thirty days after termination of the lease or surrender and acceptance of the leasehold premises, the landlord shall be liable in assumpsit to double the amount by which the sum deposited in escrow, including any unpaid interest thereon, exceeds the actual damages to the leasehold premises caused by the tenant as determined by any court of record or court not of record having jurisdiction in civil actions at law. The burden of proof of actual damages caused by the tenant to the leasehold premises shall be on the landlord.
(d) Any attempted waiver of this section by a tenant by contract or otherwise shall be void and unenforceable.
(e) Failure of the tenant to provide the landlord with his new address in writing upon termination of the lease or upon surrender and acceptance of the leasehold premises
shall relieve the landlord from any liability under this section. (f) This section shall apply only to residential leaseholds and not to commercial leaseholds.

More from the PA Attorney General's Office....

Renting a Home or Apartment: Leases and Security Deposits

Your choice of housing plays a significant role in your life and represents a major financial commitment. Understanding your rights as a consumer and a tenant will help you make informed decisions in selecting the right rental property for you. Keep these important tips in mind and don?t be afraid to exercise your rights as a tenant.

Consider the Following Before Renting:

Don?t pay for an ?apartment finder? service if the listings provided are simply vacancies taken from newspaper classifieds.

Look the properties over carefully and be sure to ask questions about any apartment or house you are considering renting. Consider the following:

Does the rent cover all utilities, or will you be responsible for paying for them yourself? If you will be paying for heat, water, or other utilities ask whether the landlord can provide an estimated monthly or annual cost for the rental property.

What kind of security does the building have? Are the doors, windows and entrances secured? Are the stairs safe and well lighted? Are the fire escapes easily accessible?

What sort of commute will you have to school or work and what is nearby in terms of restaurants, shopping, entertainment and other places you frequently visit? Also, what are the neighbors like (students, families, retirees) and is this the right setting for you?

Who is responsible for the upkeep and maintenance of common areas (stairwells, hallways, etc.) and appliances, furnace filters and other items within the property which may need to be serviced?

Is the landlord or property management readily available during nights and weekends and what are the procedures for emergency services, repairs or lock-outs?

What kind of parking is available? Is there an extra charge for a parking spot?

Are storms windows, screens and shades provided?

The Rental Application

Your new landlord may ask you to provide credit references and a list of past landlords, addresses and your employment history, including salary.

An application fee may be charged and may be nonrefundable if you are not approved. At the landlord?s discretion, the application fee may be applied to your first month?s rent or security deposit, but it is not required by law.

The Lease

A lease is a contract which legally binds both parties to terms for a specified period of time. Breach of this contract by either party can result in serious legal and financial consequences. Be sure to carefully read over the lease or rental agreement and any list of rules that the landlord will expect you to follow.

Make Sure Your Lease Contains: The specific address, including apartment number of the property.
The length of the lease.
An explanation of the rent payment procedure, including late penalties and rent increases.
Which utilities you are responsible for paying.
Termination or renewal terms.
The amount of any security deposit.


Don?t let anyone rush you into signing an agreement before you understand what it says and do not sign a lease until all blanks are filled in. Be sure to keep a copy of the lease for yourself. Make a second copy and keep it in a safety deposit box or with a friend or family member for safekeeping.
Watch out for clauses which provide for the automatic renewal for another full term equal to the original term. To avoid automatic renewal, make sure you give notice of your intention to vacate prior to expiration of the lease and in accordance with the lease?s terms.
Remember that if you are sharing the property you may be responsible for nonpayment, damages or breaches caused by any roommate or co-signer.
Inspect the premises prior to signing. If the property is furnished, check for any defects in the furniture. Make a check list of any damages to the property or its contents along with maintenance responsibilities and get the landlord?s signature on the list along with any changes or repairs. Make sure you keep a signed and dated copy.

Security Deposit

A security deposit is money which actually belongs to the tenant, but is held by the landlord for protection against damages or unpaid rent.
During the first year of a lease, the amount of a security deposit cannot exceed two months rent.
Beginning with the second year of a lease, a landlord cannot retain a security deposit of more than one month?s rent. Any security deposit greater than $100 held by a landlord must be placed in a bank in escrow.

The Landlord Tenant Act requires that interest be paid on security deposits held over two years.

After taking out damages and unpaid rent, a landlord or property owner must send its tenants the list of damages and/or the full or partial security deposit no later than 30 days after the lease ends or when the landlord accepts the tentants? keys to vacate the premises early, whichever occurs first. The law requires landlords to pay twice the amount of the security deposit if they fail to provide consumers with the list of damages along with any refund due.

Review the law: Pennsylvania's Landlord Tenant Act

If you have a problem or a dispute with a landlord or any other business, you can call the Attorney General?s Bureau of Consumer Protection at 1-800-441-2555, or you can also file an online complaint

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