Consider the scenario where the owner of a summer rental property learns that the county occupancy tax has increased between the time when a tenant signed a rental contract and paid the agreed upon fee (which included the lower tax rate) but before the tenant occupied the rental. Further, the landowner only realizes the change in tax rate after the renters have completed their stay at the property, but before the security deposit has been returned.
Under what conditions is the landlord entitled to deduct the difference in taxes from the security deposit? Additionally, should the difference in taxes exceed the security deposit, can the landlord bill the (now former) tenants the amount in excess?
Additional information added in response to comments
The 2-page rental agreement contains the following two items under a section Payment Terms. (Identifying information removed.)
- Security Deposit Your security deposit will be returned to you no later than 4 weeks after your stay to allow for property inspection, damage assessment and receipt of any TV or overseas telephone charges.
- Rental Fee to be made out to ___ in the amount of ___ and to be received no later than 4 weeks prior to your arrival. The county has imposed a 3% occupancy tax on rentals, payable by renters and forwarded by owners to the County Treasurer.
No other information is provided in the Payment Terms section. The issue revolves around the incorrect value of the occupancy tax. Because this item is part of the rental fee, is it an allowable deduction from the security deposit. Based upon the text, I interpret the document to indicate that only four items (property inspection, damage, TV and phone charges) can be deducted from the security deposit.