Putting Last Month's Rent in Escrow and Security Deposit

Question

I want to put my last month's rent in escrow until my landlord and I come to an agreement on how much of my security deposit will be returned. There's only normal wear and tear but in the past I've had plenty of landlords who try to get you for all sorts of reasons for large portions of the security deposit. I want to withhold my rent until they assess my apartment and we agree on it. Is this legal?

Answer 1

I can see the logic in what you propose and it might even work. But, this is almost certainly contrary to the terms of your lease and if you were sued by your landlord, you could incur late fees on the late paid rent, interest on the late paid rent, and attorneys' fees incurred in collection. You might also cause the landlord to react by being more unreasonable with respect to the security deposit in retaliation.

A better course would be to pay the final month of rent on time and carefully document the condition of the premises before you left with photographs and perhaps third-party witnesses as well. Many states have special statutory protections for improper withholding of security deposits and you might want to investigate what you need to do to perfect those rights in your state. If you pay your rent by credit card rather than in check or cash, it might also be possible to have the credit card company reverse the payment if there is a dispute over the security deposit.

It would probably be a breach of contract, rather than a crime, as it involves a failure to perform a promise that was in the future when the lease was entered into, rather than a non-performance that was intended when you entered into the lease.

It might result in an eviction action booting you from the premises shortly before the lease ends, but most landlords would not go through the trouble knowing that your lease was about to end and you were about to move out anyway.

Answer 2

If the lease says you can do this, yes.

If the lease doesn't say you can do this (and it almost certainly doesn't), then you haven't paid the rent and all the normal consequences of not paying the rent follow.

Answer 3

You want to withhold funds until you receive part of security deposit that you will deem reasonable. If for whatever reason landlord agrees to those, appalling and extremely one-sided, terms then fine, why not.

Although I can't imagine why would anyone agree to that because even asking for this type of arrangement vaguely constitutes blackmail, where you threaten not to pay rent on time if he doesn't return whatever part of deposit you will see as reasonable.

It won't be a criminal matter, but don't be surprised if he then takes months to return your deposit back (whatever is the absolute max allowed by law in your state) and takes you to court for the missing rent, where you will also have to pay late charges and court fees.

Answer 4

Laws on rent and withholding differ state-by-state to a very large extent, so I would check in your specific jurisdiction, including any city code that may control rental agreements. In general, however, you probably don't have a right to withhold your rent without a specific option to do so in the lease, and I have never heard of a lease that has the option.

Paying into escrow is usually reserved for when a tenant has an existing right to withhold rent from the landlord, but many jurisdictions require the rent be paid into escrow instead of withheld entirely. Usually this is only for serious maintenance issues, such as no water, no heat, etc.

Your better option is generally to read the lease and the laws governing security deposits and the steps the landlord must go through to retain any of your deposit. Make sure you fulfill all of your obligations under the law, such as attending a walk through, and make sure the Landlord fulfills her obligations, such as scheduling the walk through at the appropriate time, properly documenting damages, etc. If your landlord hasn't done a proper job checking you out, demand your entire deposit back, and if you don't get it, sue (generally in small claims court to keep costs down, but check for jurisdiction over this type of matter). The laws often put onerous burdens on the landlord to keep any of the security deposit and many landlords don't actually fully comply. Oh, and if the law requires it, ask to see if they maintain your security deposit in a separate account, an often-cheated-on requirement.

If you fight a landlord in court, you must be squeaky-clean. Document everything, and follow every step required by law and the lease.

Also, check to see if the lease called it a "deposit" or a "fee". A cleaning deposit is refundable, but a fee isn't. You might be able to challenge a "fee" in court on the basis that it was really "deposit" that was just called a "fee" to avoid the hassle of complying with deposit law, and especially in small claims, you might win.