Ohio security deposit law

Chapter 5321 does not cap the amount of a security deposit. A security deposit is any deposit of money or property to secure the tenant's performance under a rental agreement.

Ohio Rev. Code ch. 5321 Ohio Rev. Code § 5321.01(E) Ohio Rev. Code § 5321.16

• The part of a deposit above $50 or one month's periodic rent, whichever is greater, earns interest if the tenant remains in possession six months or more. Ohio Rev. Code § 5321.16(A) See Deposit interest and accounts on the Ohio page
• Fair housing law bars conditioning a disability-related modification on a security deposit larger than the one customarily required of all tenants of that housing. Ohio Rev. Code § 4112.02(H)(18)(b)

When the rental agreement ends, you may apply the deposit to past-due rent and to damages you suffered because the tenant did not comply with the tenant duties in 5321.05 or with the rental agreement. Itemize and identify every deduction in a written notice and deliver it to the tenant, together with the amount due, within 30 days after the rental agreement ends and the tenant delivers possession. The 30 days run from those two events, not from the day you receive a forwarding address.

Ohio Rev. Code § 5321.16(B) Ohio Rev. Code § 5321.16(C)

• The tenant must give you a forwarding or new address in writing for the notice and payment. A tenant who does not give one cannot recover the damages or attorney's fees described next. Ohio Rev. Code § 5321.16(B)
• If you do not comply, the tenant may recover the property and money due, plus damages equal to the amount wrongfully withheld and reasonable attorney's fees. Ohio Rev. Code § 5321.16(C)
• One of the tenant duties in 5321.05 is to refrain from, and to forbid anyone on the premises with the tenant's permission from, intentionally or negligently destroying, defacing, damaging or removing any fixture, appliance or other part of the premises. Ohio Rev. Code § 5321.05(A)(6) Ohio Rev. Code § 5321.16(B)
• The statute requires the notice to be delivered within the 30 days and has no rule that the mailing date counts as delivery. Ohio Rev. Code § 5321.16(B)

Any part of a security deposit above $50 or one month's periodic rent, whichever is greater, bears interest at 5 percent a year if the tenant stays in possession six months or more; you compute that interest and pay it to the tenant every year. Chapter 5321 does not require an owner-landlord to hold deposits in a separate or trust account. Licensing law is different for a real estate broker who manages property for its owners: failing to keep all rents and security deposits received in managing the property in a special or trust account at a state or federally chartered institution in Ohio, separate from the broker's other accounts, is grounds for license discipline.

Ohio Rev. Code § 5321.16(A) Ohio Rev. Code § 4735.18(A)(27) Ohio Rev. Code § 4735.01(A)(5)

• Example: with rent of $1,000 and a $1,500 deposit, interest runs on the $500 excess, which is $25 for a full year, if the tenant stays in possession six months or more. Ohio Rev. Code § 5321.16(A)
• A deposit no larger than one month's rent, or $50 if that is greater, has no excess, so no interest is owed on it. Ohio Rev. Code § 5321.16(A)
• Renting or managing buildings for others for a fee is real estate broker activity under Ohio licensing law; acting for Ohio real estate you own is not. Ohio Rev. Code § 4735.01(A)(5) Ohio Rev. Code § 4735.01(I)(1)(a)
• A broker's account for managed property may earn interest, which is paid to the property owners pro rata, and a broker must keep complete records of transactions, including funds received, for three years. Ohio Rev. Code § 4735.18(A)(27) Ohio Rev. Code § 4735.18(A)(24)

No section of chapter 5321 requires a move-in inspection, checklist or photo record. Because the deposit may be applied to past-due rent and to damages from the tenant's noncompliance with 5321.05 or the rental agreement, a dated record of the unit's condition at move-in is useful evidence if a deduction is disputed.

Ohio Rev. Code ch. 5321 Ohio Rev. Code § 5321.16(B)

• The tenant must keep the part of the premises the tenant occupies and uses safe and sanitary, and must refrain from, and forbid anyone on the premises with the tenant's permission from, intentionally or negligently destroying, defacing, damaging or removing any part of the premises. Ohio Rev. Code § 5321.05(A)(1) Ohio Rev. Code § 5321.05(A)(6)
• You may recover actual damages from a tenant's violation of those duties, together with reasonable attorney's fees. Ohio Rev. Code § 5321.05(C)(1)