Posted by Tara Catalino on April 30, 1999 at 09:30:03:
In Reply to: Am I liable for security deposit if landlord doesn't open escrow account? posted by Michael on April 29, 1999 at 12:20:47:
: I just entered into a lease and have agreed with the landlord to pay the security deposit in three installments. I found out my landlord already spent my first installment and obviously did not set up a bank account to hold my security deposit in escrow. Am I liable to honor the next two installments? The lease did not state what the landlord could do with the security deposit, other than refunding it to me at the end of the lease. The landlord spent the first installment on something other than its intended use, and is in effect getting a free loan from me. Somone please advise.
If your building has more than 6 apartments, then your landlord is required by law to place your money into an interest-bearing account. You are entitled to know the name of the bank and the account number, and if you make a request to the landlord, you are entitled to annual interest payments. Your landlord is allowed to deduct 1% of the interest for his/her bookeeping expenses. If you have more than 6 apartments in your building, you may be in a position to take action.
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