Ironically, there is a lot of insecurity in security deposits. It just got worse.

There are attorneys demanding tens of thousands of dollars for emotional distress allegedly caused by errors in security deposit accounting. You don't want to meet the likes of them.

 

 

After being embroiled in a lawsuit, now is a good time to remind our clients, colleagues, and friends about the importance of following security deposit rules to the letter.

We've taken on the subject of security deposits over and over again, but this time with a different twist. Tenants are not just suing for the security deposit, but for the anxiety and anguish of going through the ordeal of being short-changed or not having any funds returned in a timely matter.

Bound by confidentiality, we won't elaborate on any other details surrounding litigation except to say that the potential consequences are ratcheted up nowadays whenever a landlord improperly withholds security deposit funds.

The same can be said about “anti-harassment” laws that do not rewrite the law but only serve to reaffirm the abundance of tenant protections already on the books, give them more teeth, and give tenants or their attorneys more opportunity to sue and punish the landlord when there are any missteps.

Whatever damages are awarded to the aggrieved tenant in the venue of a small claims court, the economic damage for landlords can be multiplied severalfold, above and beyond the actual security deposit. And the lawsuit can be tried in "regular" or Superior Court.

This can substantially increase legal expenses. Why?

A double-edged sword

Bornstein Law has told landlords with an astronomical amount of rent debt that it may make more sense to pursue the matter in “regular” court, or Superior Court, where there is more due process afforded and more attorney involvement than small claims court, which can be considered a kangaroo court without attorney representation.

 

We can't help but draw a parallel with litigators who are "shaking down" landlords who categorically deny Section 8 housing vouchers. 

A trap is set to catch the landlord in the act of denying housing based on the tenant's source of income, and then the rental applicant's attorney demands an enormous sum of money in order to avoid a costly discrimination lawsuit.

 

 

These types of attorneys are out there, folks, and they are salivating over the opportunity to trap landlords who do not comply with security deposit rules. 

The good news is, those rules are clearly spelled out in state law. Unlike COVID-era laws where we were hopscotching from one deal to the next, the laws relating to security deposit deductions have fundamentally stayed the same.

We might put an asterisk on military members who are told they need to be stationed elsewhere and survivors of domestic violence. There is a yet-to-be-passed proposal under the dome of the state Capitol that would limit security deposits to the equivalent of one month's rent to all tenants, but for the most part, the rules are an open book to study.

Don't make a costly mistake. Get familiarized now with the assistance of Bornstein Law.