Amount and Allowable Charges
Ohio landlord-tenant law does not specify a maximum security deposit amount. While not required in Ohio, it’s good practice to hold the security deposit in a separate account or an escrow account.
Any damage beyond normal wear and tear is typically covered by a security deposit. For that reason, it’s a good idea to conduct a move-in inspection with your tenant present to document any existing damage at the start of the rental term. Provide a written inspection checklist (LeaseRunner has one) and make sure that both the landlord and tenant sign the move-in inspection checklist.
A landlord can retain a portion of the security deposit not only for damage attributable to the tenant, but to unpaid rent, late fees, and other fees due but unpaid by the tenant. Again, retaining documentation in the form of receipts, communication with the tenant, and photos can be very helpful for the landlord if there is a dispute about the amount withheld from the deposit.
Return of Deposit and Interest
Any deductions from the security deposit must be itemized in a written notice delivered to the tenant, together with any amount due, within 30 days after termination of the rental agreement and move out.
Ohio law states that if the security deposit is more than $50 or one month’s rent, whichever is greater, interest is due to the tenant on the excess amount at the rate of 5% per annum as long as the tenant remains in possession of the premises for at least six months.
In most cases landlords in Ohio will owe interest on the security deposit to the tenant. Ohio law states that if the security deposit is more than $50 or one month’s rent, whichever is greater, interest is due to the tenant on the excess amount at the rate of 5% per annum as long as the tenant remains in possession of the premises for at least six months. Interest must be computed and paid annually by the landlord to the tenant.