Member Support Needed for Security Deposit Bill in Prince George's County
AOBA member support is needed for legislation that would eliminate potentially troublesome provisions from Prince George’s County’s security deposit law that vary from state law. Councilman Derrick Leon Davis (D-6) has introduced the bill, CB-63-2014, in order to conform county law to state law regarding notice provisions and interest due on security deposits.
County and state laws have diverged in two important respects concerning security deposits:
- Interest Rates – Prior to 2004, state and county laws both required a four percent interest rate to be paid on residential security deposits. However, in 2004 the state rate was changed to three percent. As a result of recent changes to state law, effective January 1, 2015 the interest rate payable will be a market rate based on the greater of: (1) the U.S. Treasury yield curve rate for one year as of the first business day of the year; or (2) 1.5 percent.
- Notice – Prior to 1999, state and county laws both required a rental housing provider to give notice to a former tenant within 30 days after a lease ended detailing any damages or costs incurred if the owner intended to withhold any portion of the security deposit. State law was changed in 1999 to provide the notice by 45 days after the end of the tenancy – the same deadline for returning the security deposit with interest to the former tenant.
Prince George’s County is the only jurisdiction we are aware of with security deposit interest rate and notice provisions that vary from the state law. This is not an academic clean-up exercise, as the unwary rental housing provider in Prince George’s County could risk litigation, treble damages and loss of any ability to withhold security deposits if they fail to observe the correct law.
AOBA urges members with residential rental properties in Prince George’s County to contact Council members to support CB-63-2014. The bill will be considered by the Committee on Transportation, Housing and the Environment shortly after Labor Day. Contact Ron Wineholt for further information at firstname.lastname@example.org.