Careers Business Ownership Tenants' Security Deposit Rights in Pennsylvania Amount, Storage Procedures and Return Share PINTEREST Email Print Tenants' Security Deposit Rights in Pennsylvania. Cavan Images/ Iconica/ Getty Images Business Ownership Industries Landlords Retail Small Business Restauranting Real Estate Nonprofit Organizations Import/Export Business Freelancing & Consulting Franchises Food & Beverage Event Planning eBay E-commerce Construction Operations & Success Becoming an Owner By Erin Eberlin Erin Eberlin Erin Eberlin is a real estate and landlord expert, covering rental management, tenant acquisition, and property investment. She has more than 16 years of experience in real estate. Learn about our Editorial Process Updated on 10/30/18 As part of Pennsylvania’s landlord tenant law, there are certain rules landlords and tenants must follow when it comes to the security deposit. If a landlord does not follow these rules, a Pennsylvania tenant may have the right to the return of their full security depositplus additional damages. Here are six security deposit requirements that every Pennsylvania landlord and tenant must understand. How Much Can a Landlord Collect in Pennsylvania? Pennsylvania's landlord tenant law sets a limit on how much a landlord can collect from a tenant as a security deposit. This limit changes based on the length of tenancy. First Year of Lease: When a landlord signs an initial yearly lease with a tenant, the landlord can collect a maximum of two months' rent as a security deposit. Second Year of Lease: Once a lease enters into the second year and any year after that, the landlord can only 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 Rules for Storing Security Deposit During Tenancy Tenants have the right to have their security deposit stored in one of two ways in Pennsylvania. These options are: Escrow Account: The first option is for the landlord to place any security deposit that is greater than $100 into an escrow account. The bank or institution must be regulated by one of these four organizations: the Federal Reserve Board, the Federal Home Loan Bank Board, the Comptroller of the Currency, or the Pennsylvania Department of Banking. The account can be either an interest-bearing account or a non interest-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. Interest Payment 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. Do Pennsylvania Tenants Have a Right to Notice After Receipt? 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. This written notice must include: The Name of the BankThe Address of the BankThe Amount of Security Deposited 3 Reasons a Pennsylvania Landlord Can Keep a Tenant's Security A landlord in Pennsylvania may be able to keep all or a portion of a tenant’s security deposit for the following reasons: Damage in excess of normal wear and tearUnpaid RentBreach of lease 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. Returning the Security Deposit in Pennsylvania If No Deductions Have Been Taken: If a landlord in Pennsylvania has not taken any deductions from the tenant's security deposit, the tenant has the right to have their deposit returned within 30 days of move out. If Deductions Have Been Taken: 30 Days- The landlord must still return the security deposit within 30 days of tenant move-out. 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.Return Amount Minus Deductions- The landlord is only responsible for returning the portion of the original deposit that remains after the deductions have been made.Itemized List- 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 Tenant Does Not Provide 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. Click on “Unofficial Purdon’s Pennsylvania Statutes from West,” which is on the right-hand side of the page under “Law Information.”Once you have arrived on the new page, you will click on “Title 68 P.S. Real and Personal Property.”From there, go to “Chapter 8. Landlord and Tenant” and expand it using the plus sign on the left side.Go to “Landlord and Tenant Act of 1951” and expand that.Go to Article V.Recovery of Possession and expand it.Now, click on statues 250.511a., 250.511b., 250.511c or 250.512, to find the information on Pennsylvania security deposits.