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Rental Deposits

Authored By: Iowa Legal Aid LSC Funded
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Disputes over deposits are a frequent problem between landlords and tenants. The high cost of deposits and problems with prompt returns of deposits contribute to Iowa's homelessness problems, according to the Governor's Interagency Task Force on Homelessness. A landlord can make a tenant pay up to two months' rent as a deposit. This is in addition to a month's rent in advance. Tenants need to take steps to be sure landlords return deposits after they move out.

CHECKING A LANDLORD OUT

A landlord/tenant relationship is long-term. Few tenants go through the hassle of packing up all they own, finding a vehicle, loading and unloading, cleaning and unpacking, just to do it again next month. You will spend a lot of time in your apartment or house. Also, you are going to rely on your new landlord to maintain and repair the unit, and provide other services. Therefore, it is a good idea to learn as much as you can about your future landlord.

One way to learn more about your new landlord is ask previous tenants. You can ask your future landlord what other properties he or she owns or manages. Then find the tenants who live there. You may want to speak to the tenants who are in the unit you plan to rent. Ask them how prompt the landlord is with repairs. In particular, ask if the landlord has a good or bad reputation about returning deposits.

Many towns have Housing Codes. If you live in a town with a Housing Code, check with the City Inspector. See if any of your landlord's properties violate the code. Also find out how long the violation has existed. The landlord might have let a serious Housing Code violation go a long time without fixing it. You should also check whether other tenants have made complaints to the housing inspector about this landlord.

You can also get information from Small Claims Court. That is where most deposit claims are decided. Therefore, you may want to go to the Small Claims Court Clerk and ask for help looking up your landlord's name in the Index. This is a book where the clerk writes down Small Claims suits. This would tell you if tenants have sued this landlord to get their deposit back. An easier and faster way to learn about a landlord's history in court is by using the Internet. If you have Internet access, as you likely do if you are reading this article, visit http://www.iowacourts.state.ia.us/. From this page you follow the instructions and you can find out information from all 99 counties in Iowa, including case numbers that you can take to the county clerk and ask to see files about the landlord. If the landlord is in court a lot you should be especially careful!


NEGOTIATING THE DEPOSIT

Under the new law, a landlord can charge up to two months' rent as a damage deposit. This deposit is in addition to asking that you pay your first month's rent before moving in. This means if your rent will be $300 per month, you may have to give your landlord up to $900 before you move in.

Even though the law says a landlord can charge up to two months' rent as a deposit, this does not mean that the landlord must ask for that much. Many landlords charge only one-half month's rent or even less for the deposit. There are several ways to try to negotiate with the landlord about the amount of the deposit payment.

One way is to give your new landlord letters of reference from your former landlords. The letter should state that you were prompt in paying your rent. It should say you kept your house in a clean and habitable condition and gave prompt notice of any problems. It would help to have the letter say you were courteous to other tenants, and left the apartment clean and in good repair.

It may be that your last landlord was not a good one. Some landlords are dishonest and you may not be able to get a good reference. If this happened to you, or if this is your first apartment, references from other people may help. Your employer, teachers, and social workers, may be willing to give you references.

Some landlords will let you work off the deposit. For example, your landlord may let you shovel the walk, mow the grass, or rake leaves. You might be able to do work like cleaning the outer hall. If you enter this kind of agreement, be sure to get it in writing and have it signed by your landlord. This written agreement needs to be specific. It should state the amount of the deposit. Also, it should state how many times you need to mow, shovel, rake, or clean before you have held up your end of the bargain. Be sure to document the work you have done. For example, every time you shovel, you should have your landlord sign a statement that on such and such day you shoveled the walk and it was satisfactory.

Another way to negotiate the deposit is to ask your landlord to let you to pay it off over time. Suppose your landlord requires one month's rent for deposit, and it is $300. Your landlord may let you pay $100 per month in addition to your regular rent payment of $300. If you get this kind of agreement, be sure to get it in writing and signed by the landlord. You should also be careful to get a separate receipt for your rent payment and your deposit payment. This may avoid confusion later, so your landlord won't forget and think your rent was actually $400 per month and say you never paid your deposit. It is never a good idea to pay your landlord in cash. A tenant should pay with a check or money order, and keep a copy of it. On the check or money order a tenant should write what the payment is for, for example: "March Rent".

USING YOUR DEPOSIT FOR THE LAST MONTH'S RENT

Sometimes tenants do have to move. Renters may need to move because of a new job. The need to move may come up because of a new member in the household, and the apartment is now too small. In such cases, many renters won't have enough cash on hand to pay the deposit and first month's rent to the new landlord. In this case, some tenants ask their old landlord if they can use the deposit for the last month's rent. The landlord does not have to agree to do this. If the landlord will let you use the deposit as the last month's rent, be sure to get it in writing signed by your landlord. If your landlord forgets about your agreement, and you fail to pay rent on time, your landlord could evict you for non-payment of rent. If you do not have a written agreement signed by your landlord, you will not have proof of this arrangement. Your landlord could have you put out before you are able to move in to the new apartment.

RENTAL DEPOSITS AND HOUSING DISCRIMINATION

Also, many lawyers and lawmakers have concerns that the rental deposit law can be used by some landlords to illegally discriminate against some renters. The law allows the landlord to charge up to two months' rent as a deposit. Many renters cannot afford to pay this much. For example, some landlords may not want to rent to tenants because of their race. One way a landlord can refuse to rent is when the tenant can't pay the full deposit. However, if the landlord charges two months' rent as a deposit only for an African American or Hispanic tenant, then the landlord may be illegally discriminating on the basis of race. Race is not the only basis of illegal discrimination. In providing housing, it is illegal to discriminate because of a person's race, color, creed, sex, religion, national origin, disability, or against a person because they have children. Some cities also have an ordinance that says it is illegal to discriminate against someone because of their sexual orientation. If you have questions regarding this. or any legal matter you should consult an attorney for legal advice. To find out the number of the Iowa Legal Aid office serving your area, call 1-800-532-1275. If you believe you are being illegally discriminated against, you should contact the Department of Housing and Urban Development by calling 1-800-669-9777. You may also contact the Iowa Civil Right Commission (ICRC) at 1-800-457-4416 or (515) 281-4121. If you believe that you have been discriminated against you must act fast! You have 180 days from the time that the discrimination happened to file a complaint with the (ICRC). You can choose to file a complaint on the internet at their website: http://www.state.ia.us/government/crc/ .

MOVING IN

Under Iowa Law, the landlord must give you a "habitable" unit at the beginning of your tenancy. This means that your apartment or house must not have any serious health or safety problems. Therefore, the condition of your unit should not have signs of rodent or pest infestation, leaky pipes, exposed wiring, etc. The basic functional parts of the unit should be in working order. Functional parts of the unit include plumbing, heating, and structural parts like ceilings, walls, windows, and floors. All should be in good repair. If there are problems, bring them to the attention of the landlord. This will give your landlord time to make repairs before you move in.

Also under Iowa Law, tenants are responsible to return the unit to the landlord in the same condition it was at the beginning of the tenancy. "Normal wear and tear" is allowed. This means that you should document the condition of the unit on the day you move in. This can be done by taking pictures, making a checklist, and doing a "walk-through" with the landlord.

Pictures are helpful to show how much cleaning you did when you moved in. However, you must be careful that the picture actually shows what was in front of the camera when you took it. Be sure the picture is in focus. If size is important, be sure to put something in the picture that will help show the size. For example, if there are water stains on the wall or ceiling, put a ruler next to the stain before taking the picture. You could use this picture later to prove you didn't cause the problem. Another example would be to put a dustpan next to the pile of trash you swept up. Since everyone knows how big a dustpan is, a judge will have no trouble figuring out how high the trash pile was.

You will also want to prove the date the picture was taken. You may want to use a camera that has film which prints the date of the picture on it. You should take pictures of your apartment on the day you move in, and when you move out.

Another way to show the condition of the apartment on the day you moved in is to make a checklist of the condition of the unit. Start with the functional areas first. This includes electricity, plumbing, walls, ceilings, floors, doors, windows, heating, air-conditioning, etc. Under each of these areas you should note any problems. For example, under "floors" you may want to note anything wrong with the carpet including loose threads, worn spots, cigarette burns, stains, cleanliness, etc.

After you have composed a thorough list, you may want to do a "walk-through" with your landlord. Make an appointment with your landlord to go through your apartment and note all the problems you have set down on the list. Also, you may add anything your landlord points out. After the walk-through, have the landlord sign and date the list. If your landlord is not available for a walk-through, you may want to call the City Housing Inspector to help you. If they are not available, then you can ask a friend. In any case, you may want them to sign and date the checklist. You can have your list notarized by a notary public if you like.

CARE OF THE UNIT DURING TENANCY

Both the landlord and tenant have a responsibility to keep the dwelling unit in a fit and habitable condition. For the landlord, this means keeping the unit up to housing codes if any apply. Also, the landlord must do any repairs that are necessary to keep the unit in a fit, safe, and habitable condition. This includes all functional areas like electric wiring, plumbing, heating, ceilings, wall, etc. Also, the landlord is responsible for maintaining the safety and habitability of building areas used by other tenants (stairwells, sidewalks, laundry facilities, etc.).

The tenant has a similar responsibility to keep his or her unit in a clean, safe, and habitable condition. If the tenant deliberately or carelessly damages the unit, the tenant probably will have to pay for it. Also, the tenant will be responsible if he or she knowingly permits someone else to damage the property. Also, the tenant should report any problems to the landlord before the problems get worse. For example, if water spots appear on the ceiling, it usually happens because of a leaky pipe or roof. If the leak isn't fixed, the damage is likely to get worse. It could destroy the ceiling. If you fail to report the problem, the landlord could argue that you should pay for the new ceiling. When you speak to the landlord, be sure to document your conversation in writing. Send a letter summarizing what you said, and keep a copy of the letter for your records.

MOVING OUT

As stated above, the tenant is responsible for returning the apartment or house to the landlord in the same condition it was at the beginning of the tenancy. However, any change in the condition of the dwelling resulting from normal wear and tear is allowed. If you followed the instructions above, you have documented the condition of the apartment at the beginning of your tenancy. The question remains, "What is normal wear and tear?"

A good way to think about whether damage is due to normal wear and tear is to think through three questions. The first question is, what object was damaged? The second question is, what kind of damage? And the third question is, would that kind of damage result from normal use of that object?

For example, suppose the kitchen water taps did not drip when you moved into your apartment. Now, after living in the unit for three years, they are dripping. The first question is what object was damaged?-The kitchen taps. The second question is, what kind of damage?-The taps drip. The third question is would three years of normal use of kitchen water taps result in dripping?-Yes, probably. Therefore, it is unlikely that you would be responsible for damage of leaky water taps under these circumstances.

Again, when you move out, document the condition of the unit after you have moved everything out and cleaned. Do this the same way you did at the beginning of your tenancy. You can document your apartment's condition by pictures, checklists, and walk-throughs.

A walk-through with your landlord is critical at the end of your tenancy. If your landlord signed a statement that your apartment was clean and in good repair at the end of your tenancy, she or he has much less to complain about after you have gone.

RETURN OF THE DEPOSIT

Under Iowa Law, your landlord does not have to return your deposit until thirty days after you have vacated the unit and you have given the landlord instructions about where to send the deposit. Also, if the landlord keeps all or part of your deposit, he or she must tell you so in writing. The letter from your landlord must explain specifically the reason for keeping the deposit. A letter that merely says you damaged the apartment and therefore the landlord is keeping your deposit is not specific enough. The landlord must tell you what was damaged, and how he or she arrived at that specific amount. Also, under Iowa Law, the landlord must send this letter to you within thirty days of the date you vacate and give instructions about where to send the deposit, or else the landlord does not have a right to keep any of your deposit. The tenant may also be able to recover up to twice the rental payment if the landlord is not being fair. Other rules apply to deposits as well.


NEGOTIATING RETURN OF YOUR DEPOSIT

Sometimes you don't have to sue your landlord to get your deposit back. Often, you can persuade your landlord that there was a mistake. If you took the steps given above, you can contact your landlord and tell him or her what you have. You will have signed move-in and move-out checklists. You may have pictures, and the landlord's signed statements that the apartment was clean and in good repair. With these documents, you can often persuade the landlord to return your deposit without having to go to Court. In any case, if you speak with your landlord about the return of your deposit, you should follow up. Send him or her a letter with a summary of your conversation, and keep a copy of the letter for your records. This letter should also ask that your landlord write to you if any statements are not accurate.

SUING YOUR LANDLORD

Sometimes, the landlord refuses to cooperate or negotiate and therefore must be sued to get your deposit returned. However, before suing your landlord, it is a good idea to study the Landlord/Tenant Laws of Iowa. You can find these statutes at most public libraries. Ask to read Iowa Code Sections 562A if you rent a house or apartment unit, or Section 562B if you own a mobile home and rent the mobile home lot. Also, you can contact your local Iowa Legal Aid office and request a copy of the booklet A Guide to Landlord/Tenant Law in Iowa. You should study this book thoroughly before bringing your lawsuit. Also, look at the information in the Small Claims Court resource on this website, also available as a booklet at your local Iowa Legal Aid office. This booklet describes the basic court procedures used in Small Claims Court, where you would probably file your lawsuit to recover your deposit. Also, you can contact your local Iowa Legal Aid office and may be able to get advice on how to proceed in your lawsuit. Finally, you may be able to find a private attorney who will help you.

Any tenant with problems involving an eviction, or other landlord/tenant law questions should see an attorney for advice. To find out if you may be able to get free legal help from Iowa Legal Aid, call 1-800-532-1275.

This information is not a substitute for legal advice

Last Review and Update: Oct 25, 2013
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