This article covers details about security deposits that every landlord in Oklahoma should know about. However, if you have questions about a specific situation, feel free to send us an email and we would be glad to answer your questions.
What is a Security Deposit and why do most Landlords require them in Oklahoma?
A security deposit (some times called damage deposits) is an amount of money held in escrow to secure payment of any damage the tenant may cause during the lease term.
Landlords are rightly concerned about having to pay for repairs to their property that were caused by the Tenant. Often, Landlords will not know that any damage has occurred while the tenant is living there. It is not until the tenant moves out, that the Landlord gets to see the inside of the premises and notice any damage. Therefore, Landlords will often require security deposits before they allow the tenant to take possession of the premises.
Oklahoma law requires Landlords to hold Security Deposits in Escrow Account
What a landlord does with a tenant’s security deposit is very important. Under Oklahoma law, landlords must maintain any funds paid by Tenants in a federally insured bank account.
The account must be maintained as a separate escrow account. That means it must be separate from the operating account of the property management business. The escrow account cannot be the same account the landlord would pay contractors or bills out of, nor the same account which collects revenue such as rental payments.
How a Landlord should collect a security deposit
There are more or less better ways of doing this. The first step is to have a written lease that explains what the deposit is to be used for, and how much is required to be deposited by the Tenant. One way of providing even more reassurance to the tenant is to describe in the lease where the funds will be held, and how exactly they will be released back to the tenant.
By describing these circumstances, the relationship will be off to a better start. The tenant will know exactly how much to put down, and what he or she needs to do in order to get it back.
Refunding the Deposit at the end of the lease term
Again, the written lease should detail how the deposit will be returned to the tenant after vacating the premises. This will put the tenant at ease, and also provide clarity to both parties.
Oklahoma law requires that after the tenant has vacated possession of the property, the tenant may make written demand for return of the deposit. The landlord must return the unused portion of the deposit to the tenant within 45 days of the tenant’s written demand.
The tenant’s demand is only valid if the tenant has fully vacated and returned possession to the landlord. That means that the tenant needs to be completely moved out before even having a conversation about getting the deposit back.
If the tenant does not ask for the deposit back within six months of the termination of the lease, the landlord may keep the deposit. The tenant must also put this request in writing. 41 O.S. § 115.
Now, this does not mean it is good business to withhold security deposits from tenants, or make the process of returning the deposit any more complicated than it needs to be. Landlords should be diligent in providing an accounting of the deposit and returning any unused portion of it. If the landlord intends to use the deposit to pay for damages, then a proper accounting should be kept.
Using the Deposit to pay for damages, repairs, or unpaid rent
A landlord may apply the deposit toward any unpaid rent. 41 O.S. § 115. So at the time the tenant moves out, if there is any balance remaining on the rent, the Landlord may use the deposit to pay that rental balance.
Landlords may also use the deposit to pay for damages to the property. Landlords should be swift in inspecting the property soon after the tenant moves out. The landlord should look for any damage, either caused during the move-out or during the tenancy, and make note of the damage.
Afterwards, the landlord should prepare a written statement that itemizes any amounts withheld to cover any expenses. The statement should stated the final amount returned, and be accompanied with a check for the funds. The landlord must send the itemized statement to the tenant by certified mail, return receipt requested.
The landlord may also use the deposit to pay for damages sustained as a result of noncompliance with the rental agreement. So that would include things like late fees, and other charges or obligations contained in the lease.
The Security Deposit may be used to pay for costs of Eviction
In the event the landlord has to file an eviction, he may use the security deposit for those expenses. There are costs associated with filing an eviction, such as the filing fee and the cost of service, whether by certified mail or private process server. Then there are the attorney fees.
The security deposit can be applied to these costs. These expenses should be memorialized in the written statement that is then sent to the tenant by certified mail.
If you are a Landlord in Oklahoma County, contact the Landlord Lawyer
We represent Landlords in Oklahoma County. We help property managers, landlords, and apartment complexes operate their businesses more efficiently. We mitigate expenses of bad tenants by moving swiftly through the eviction process. To get started, complete this form or call or text 405-701-6016.