6 Basics of Pennsylvania's Security Deposit Law

The Maximum You Can Collect and Deadline for Returning

Picture of Pennsylvania Security Deposit Law Basics
Pennsylvania Security Deposit Law Basics. Cavan Images/ Iconica/ Getty Images

Pennsylvania has included rules for the security deposit in their state’s landlord tenant laws. If you are a Pennsylvania landlord and fail to follow these laws, you could forfeit your right to keep a tenant’s security deposit or could even be forced to pay the tenant additional damages. Here are six basic questions about the law every landlord and tenant should understand.

Frequently Asked Questions:

  1. Security Deposit Limit- Two Months' Rent First Year of Lease, One Month's Rent After That.
  1. Storing Deposit- Place in Escrow Account or Purchase Guarantee Bond.
  2. Written Notice After Receipt- Yes, Required.
  3. Taking Deductions- Damage, Unpaid Rent, Breach of Lease.
  4. Walk-Through Inspection- Not Required.
  5. Returning Deposit- 30 Days After Tenant Move-Out.

1. Is There a Security Deposit Limit in Pennsylvania?

In the state of Pennsylvania, the amount you can collect as a security deposit changes based on the length of tenancy.

  • First Year of Lease: A landlord can charge a tenant a maximum of two months’ rent during the first year of their lease.
     
  • Second Year of Lease: When a lease enters into the second year and any year thereafter, the landlord can hold a maximum of one month’s rent as a security deposit.
     
  • Fifth Year of Lease: If the tenant has lived in the property for five years or more, a landlord may no longer require a security deposit increase to stay in line with an increase in rent.

2. How Should You Store The Security Deposit in Pennsylvania?

Landlords in Pennsylvania have two options for storing a tenant’s security deposit.

They can either place it in an escrow account or they can post a guarantee bond for the amount of the security deposit.

  • Escrow Account: A landlord can decide to place any security deposits received that are more than $100, into an escrow account. The bank or institution must be regulated by one of these four organizations:
    1. The Federal Reserve Board,
    2. The Federal Home Loan Bank Board,
    3. The Comptroller of the Currency, or
    4. The Pennsylvania Department of Banking.
    The account can be either an interest-bearing account or a noninterest-bearing account.
     
  • Guarantee Bond: The landlord's second option is to post a guarantee bond for the amount of the security deposit. This bond must be issued by a bonding company which is authorized to do business in the state of Pennsylvania.

Tenants who begin their third year, or twenty-fifth month, of tenancy are entitled to receive the accrued interest on the account each year minus a one percent management fee that the landlord may deduct.

3. Is Written Notice Required After Receipt of the Security Deposit in Pennsylvania?

Yes. After a landlord receives a tenant’s security deposit and places it into an escrow account, the landlord must notify the tenant in writing with the name and address of the bank and amount of security deposited.

4. What Are Some Reasons You Can Keep a Tenant’s Security Deposit in Pennsylvania?

A landlord in Pennsylvania may be able to keep all or a portion of a tenant’s security deposit for the following reasons:

5. Is a Walk-Through Inspection Required in Pennsylvania?

No, the state of Pennsylvania does not require a walk-through inspection before the tenant moves out.

6. When Must You Return a Tenant’s Security Deposit in Pennsylvania?

If there are no deductions:

A landlord has 30 days from tenant move-out to return a tenant’s security deposit.

If there are deductions:

The landlord must still return the security deposit within 30 days of tenant move-out, but must only return the portion of the original deposit that remains after the deductions have been made. The landlord must include an itemized list of all damages and the approximate cost of repair. If the landlord does not provide this itemized list, he or she will lose the right to keep any portion of the security deposit.

If a landlord does not return the tenant’s security deposit within the 30 day window, the landlord may be liable to pay the tenant double the amount of the deposit they are owed.

If a tenant does not provide a forwarding address:

Failure of a tenant to provide the landlord with his or her forwarding address in writing upon lease termination or tenant move out will relieve the landlord from their liability to return the tenant’s security deposit.

What Is Pennsylvania’s Security Deposit Law?

For the original text of the security deposit law in Pennsylvania, please consult Pennsylvania Statute Title 68 §§ 250.511a -512.

The site can be a little confusing, so please read the following steps to find the law more easily.

  1. Click on “Unofficial Purdon’s Pennsylvania Statutes from West,” which is on the right-hand side of the page under “Law Information.”
     
  2. Once you have arrived on the new page, you will click on “Title 68 P.S. Real and Personal Property.”
     
  3. From there, go to “Chapter 8. Landlord and Tenant” and expand it using the plus sign on the left side.
     
  4. Go to “Landlord and Tenant Act of 1951” and expand that.
     
  5. Go to Article V.Recovery of Possession and expand it.
     
  6. Now, if you click on statues 250.511a., 250.511b., 250.511c or 250.512, you will find the information on Pennsylvania security deposits.