Ohio Security Deposit Law: Everything You Need To Know

Ohio security deposit laws are designed to balance landlords' rights to protect their rental property and tenants' rights to recover their deposits fairly. Our blogpost breaks down key aspects of Ohio security deposit law, including deposit amounts, allowable deductions, return timelines, and tenant rights.

Security Deposit Amount and Allowable Charges

Ohio offers flexibility when it comes to security deposit amounts:

• No Maximum Amount: There is no limit on the security deposit a landlord can charge. However, most landlords charge 1-2 months’ rent to remain competitive and attract tenants.
• Pet Deposits: Ohio landlords may charge additional pet deposits. Federal laws exempt tenants with service or emotional support animals from paying extra fees.

Allowable Charges

Landlords can use security deposits to cover:

1. Unpaid Rent: Rent that tenants failed to pay during the lease term.
2. Property Damage Beyond Normal Wear and Tear: Examples include:
• Broken appliances or fixtures.
• Permanent stains or holes in walls.
• Damage caused by pets.
3. Unpaid Utility Bills: Any utilities left unpaid by tenants upon lease termination.
4. Lease Violations: Costs arising from breaches of the rental agreement, such as early termination fees.

Landlords must keep detailed records of:

• The amount collected and the date of collection.
• Deductions made and the reasons for those deductions.
• Receipts, photos, and itemized lists for damage or repairs.

Return of Deposit and Interest Requirements

Ohio law mandates strict guidelines for landlords when handling the return of security deposits. Adhering to these regulations ensures transparency and fairness while protecting both landlords and tenants: 

Timeline for Deposit Return

Landlords must return the tenant’s security deposit or provide an itemized list of deductions within 30 days after the termination of the lease and the tenant vacating the premises.

If the landlord fails to meet this timeline, they forfeit their right to withhold any portion of the deposit and may face legal penalties, including:

• Liability for double the withheld amount.
• Payment of reasonable attorney fees incurred by the tenant in recovering the deposit.

If the tenant does not provide a forwarding address, landlords are not obligated to return the deposit or issue documentation until they receive it.

Interest on Deposits

Ohio law requires landlords to pay 5% annual interest on certain security deposits (§§ 5321.16). This applies under the following conditions:

• The deposit exceeds $50 or one month’s rent, whichever is greater.
• The tenant has occupied the rental property for six months or longer.
• The deposit is held in an interest-bearing account.

Interest must be calculated and paid annually to the tenant, either as a direct payment or a credit toward rent. If the deposit does not meet the minimum threshold or the tenant vacates before six months, no interest is due..

Itemized Deductions and Written Notice

If landlords intend to deduct any portion of the security deposit, they are required to follow strict notification procedures:

• Detailed Statement: Provide an itemized list of each deduction, including:
• The nature of the damage or unpaid obligation.
• The cost associated with repairs or outstanding fees.
• Supporting documentation such as invoices, receipts, or repair estimates.
• Normal wear and tear cannot be included as a valid deduction under Ohio law.
• Delivery Requirements:
• The written notice must be sent to the tenant’s forwarding address within 30 days.
• If the tenant does not supply a forwarding address, the landlord has no obligation to return the deposit or provide the notice until the address is received.

Deductions and Tenant Rights

Ohio security deposit law outlines what landlords can and cannot deduct, ensuring transparency and fairness. Additionally, tenants are granted specific rights to dispute unfair charges and protect their financial interests: 

Types of permissible deductions for landlords

Permissible Deductions for Landlords

Landlords may deduct from the security deposit for:

• Negligent or Excessive Damage: Costs for repairs beyond normal wear and tear, such as replacing broken windows or repairing pet damage.
• Unpaid Rent or Utilities: Any outstanding amounts owed by tenants.
• Excessive Cleaning Fees: Charges for professional cleaning if the unit is left in an unsanitary state.
• Maintenance-related deductions in Ohio: Landlords may charge for tenant failure to fulfill maintenance responsibilities outlined in the lease, such as yard care or repairs caused by tenant negligence. 

Prohibited Deductions: Landlords cannot charge for normal wear and tear, such as faded paint, minor scuffs, or general aging of fixtures.

Understanding a landlord’s right to enter a rental property for inspections or repairs is also critical for documenting damages. Learn more about the Landlord's Right to Entry in Ohio to comply with tenant privacy requirements while managing security deposit claims.

Tenant notification requirements

To legally deduct from a security deposit, landlords in Ohio must:

1. Provide an Itemized Statement: Clearly outline each deduction, the cost associated, and the reason for the charge. Attach supporting documentation such as receipts, repair estimates, or photos when applicable.
2. Send Notice to the Tenant’s Forwarding Address: This notice must be delivered within 30 days of the lease termination or move-out date. If the tenant does not provide a forwarding address, landlords are not obligated to return the deposit until an address is provided.

Tenant rights in disputing deductions or damages

Tenants have the right to:

1. Dispute Improper Deductions: Submit a formal dispute letter challenging unfair or excessive charges. Consult legal aid or file a complaint with local housing authorities.
2. File a Lawsuit: Tenants can sue in small claims court for wrongfully withheld deposits. Courts may award tenants double the withheld amount plus legal fees if the landlord fails to comply with Ohio security deposit laws.
3. Request Documentation: Tenants can demand receipts, photos, or other evidence to substantiate deductions.

Conclusion

Ohio's security deposit laws aim to protect both landlords and tenants by providing clear guidelines for deposit collection, storage, and return. 

Landlords must adhere to timelines, document all deductions, and communicate transparently to avoid disputes. Tenants, in turn, should understand their rights to ensure fair treatment and recover their deposits. By staying informed about Ohio security deposit law, both parties can foster a positive rental relationship and prevent unnecessary conflicts.