.webp)
When a tenant moves into your rental unit, collecting a security deposit is a smart move for financial protection—but only if it complies with Pennsylvania security deposit laws.
If the landlord's charge exceeds the allowed security deposit amount, or if the landlord's written notice isn’t provided when required, it can quickly lead to legal complications.
If the security deposit refund is delayed or mishandled—especially if it exceeds one month’s security deposit—it can result in disputes that end up in municipal court.
Understanding the exact amount you're legally allowed to collect and return is crucial for any Pennsylvania rental property owner, especially after the landlord receives the deposit.
Pennsylvania Law Limits on Security Deposits
Under Pennsylvania law, how much a landlord can charge for a security deposit depends on the lease agreement's duration:
- First year: Landlords may collect up to two months’ rent as a tenant’s security deposit. This includes anything labeled as last month's rent.
- Second year onward: The security deposit must be reduced to no more than one month's rent.
- After five years, the landlord cannot increase the monthly security deposit, even if the monthly rent rises.
If the landlord fails to refund the overage after the first year, they may face consequences under Pennsylvania landlord-tenant laws.
Escrow and Interest Requirements
If the amount of the security deposit exceeds $100, it must be placed in an escrow account. By the third year, it must earn interest, which belongs to the tenant.
Return Rules: Timing and Deductions
When a tenant vacates a housing unit, the landlord must return the security deposit within 30 days after the tenant leaves and provides a new address. A written list of allowable deductions must be sent via certified mail or return receipt requested.
If the landlord does not return the deposit or comply, they may lose the right to deduct money and owe double the difference as legal recourse in justice court or small claims court.
What Landlords Can and Can’t Deduct
Under rental agreement law, deductions must be reasonable and well-documented. The landlord cannot deduct for normal wear, such as faded paint or minor scuffing.
However, the landlord's expenses for repairing significant damage or replacing broken appliances not covered by the lease agreement are valid.
Stay Compliant, Stay Protected
Security deposits aren't just paperwork—they’re legal obligations. Under Pennsylvania law, missteps in collecting, holding, or returning a tenant’s deposit—even during the onboarding of prospective tenants or drafting a written agreement—can lead to serious penalties, including paying double the amount in court. Know what you can legally charge, how long you can hold it, and what to return.
Let DeSantis Property Management handle the details. From lease setup to deposit compliance, we simplify the process so you can focus on growing your rental business.
📲 Contact us today for expert support you can trust!
FAQs
Q: Can I charge more than two months' rent for a security deposit in Pennsylvania?
A: No. The maximum deposit is two months’ rent for the first year and one month’s rent thereafter.
Q: When do I need to pay interest on a security deposit?
A: If a tenant stays into the third year, the deposit must be in an interest-bearing account, and the interest earned (minus up to 1% for admin costs) must be paid annually.
Q: What if a tenant doesn’t provide a forwarding address?
A: If the tenant fails to give a forwarding address, the landlord does not have to return the deposit until one is received.
Q: What can I legally deduct from a tenant’s deposit?
A: You may deduct unpaid rent, actual damage, and expenses for cleaning beyond normal wear and tear, but not normal wear alone.
Q: What happens if the landlord fails to return the deposit?
A: The landlord forfeits the right to any deductions and may owe the tenant double the amount of the deposit in legal action.
Additional Resources:
Landlord-Tenant Confidentiality Laws in Pennsylvania: What Landlords Need to Know
Can a Landlord or Property Manager Enter Your Apartment? Learn Your Rights
