Can landlords charge non-refundable security deposits?
This rental guidance was reviewed by the Tenants & Landlords Intelligence Team, specializing in lease agreements, notices, rent disputes, deposits, evictions, and tenant-landlord operational procedures.
Understanding Non-Refundable Security Deposits for Tenants in Ohio
When entering into a rental agreement in Ohio, tenants should be well-informed about their rights and obligations regarding security deposits. One common question that arises is whether landlords can charge non-refundable security deposits. This guidance will clarify what Ohio law says about security deposits, including the legality and usage of non-refundable fees related to housing.
What Is a Security Deposit?
A security deposit is a sum of money a landlord collects from a tenant at the beginning of a lease. Its primary purpose is to protect the landlord against potential damages to the rental property, unpaid rent, or other lease violations after the tenant moves out.
Can Landlords Charge Non-Refundable Security Deposits in Ohio?
In Ohio, landlords generally may not require a non-refundable security deposit under the label of a "security deposit." The Ohio Revised Code (ORC) treats deposits intended to cover damages and unpaid rent as refundable. However, landlords can charge certain non-refundable fees that are not technically security deposits but serve other purposes under the lease.
Key Points:
- Security deposits are refundable: Under Ohio law, deposits for potential damages or unpaid rent must be refundable at the end of the lease term, minus any lawful deductions.
- Non-refundable fees (distinct from security deposits) are allowed: Landlords can charge fees such as application fees, move-in fees, or cleaning fees that are explicitly non-refundable, provided these are not marketed or labeled as security deposits.
- Any non-refundable fee must be clearly disclosed in the lease: Transparency is essential. Tenants should receive written notice detailing all fees, their purpose, and whether they are refundable.
Legal Requirements for Security Deposits in Ohio
Ohio law imposes specific rules on security deposits that landlords must follow to protect both parties.
Maximum Amount
- Ohio does not set a statutory maximum security deposit limit. However, landlords often charge an amount equivalent to one or two months' rent.
Written Lease Terms
- The lease or rental agreement should specify the amount of the security deposit and the conditions under which it will be refunded.
Handling of Security Deposits
- Although Ohio does not require landlords to keep security deposits in a separate account, good practice encourages transparency.
- The landlord must provide the tenant with an itemized list of damages and the amount withheld, along with the remaining balance of the deposit, within 30 days after the tenant moves out.
Return Timeline
- The security deposit, minus any lawful deductions, must be returned to the tenant within 30 days after the lease ends and the tenant vacates the property.
Non-Refundable Fees Landlords May Charge in Ohio
While Ohio law protects tenants from losing their security deposits through non-refundable designations, landlords may impose certain non-refundable charges, including:
- Application Fee: Covers the cost of screening tenants (credit report, background check).
- Move-In or Administrative Fees: Charged to offset the landlord’s expenses in preparing the rental unit.
- Pet Fees: Non-refundable fees for having pets on the property. Note: some landlords may charge a pet deposit (refundable) or a pet fee (non-refundable), but this must be clearly disclosed.
- Cleaning Fees: If agreed upon in advance, landlords may charge a non-refundable cleaning fee instead of withholding from the deposit.
Best Practices for Tenants Regarding Security Deposits in Ohio
To protect your rights and ensure clarity about security deposits and fees, tenants should:
- Carefully review the lease agreement for all fees listed, including what is refundable and non-refundable.
- Ask for written clarification if any fee is ambiguous, especially regarding security deposits and move-in charges.
- Take photos or videos of the rental unit at move-in to document its condition.
- Request a move-in inspection report, if available.
- Keep copies of all correspondences related to deposits and fees.
Summary
- In Ohio, security deposits by definition must be refundable and are typically held to cover damage or unpaid rent.
- Landlords cannot charge non-refundable security deposits but may impose non-refundable fees for applications, pets, or cleaning, provided they are clearly disclosed.
- Tenants should always ensure the lease agreement explicitly states which fees are refundable and which are not, and understand that the landlord must return any refundable security deposit amounts within 30 days of lease termination.