May 2022

It's all just money, right? rhino!UP for May 1, 2022

When you give a landlord money, you need to know the terms of the exchange. Too many tenants are paying too much because they didn't understand the differences between a fee, a deposit, a security deposit, and a fine or penalty.

Let's start with fees and deposits.

A fee is a charge for a service provided by the landlord. For example, when you fill out a lease application, the landlord may ask for a screening fee. That's a payment so the landlord can obtain a credit or screening report. Fees are not refundable. If the report comes back negative and the landlord denies your application, you're not entitled to a refund.

What about a "deposit to hold the unit? Sometimes landlords will ask prospective tenants to give them a deposit when they take an application. The deposit is a pledge that the tenant will sign the lease, if the application is approved. At that point, the deposit to "hold the unit" is applied to the first month's rent or to the security deposit. If the application is denied, the landlord must return the deposit to the prospective tenant. The key thing is that both parties should agree in writing to the terms of the agreement. Both parties sign the agreement and both have copies.

A security deposit is an amount of money that the landlord holds during the tenancy to assure that the tenant pays the rent and doesn't damage the property besides "normal wear and tear." Unlike a deposit to hold a unit, the terms and conditions of a security deposit are governed by law (ORC 5321.16). Still, some caution is required. Tenants should do a "walk thru" to determine what conditions were present before the tenants sign the lease or take possession. If the landlord says that the unit is currently occupied and so the prospective tenant can't do a walk through, then walk away.

What are pet deposits? A landlord may also want a pet deposit which protects the landlord against damages caused by Fido. Since Fido is not a party to the rental agreement, a pet deposit is really just an extra security deposit, subject to the same terms as a regular deposit. In Ohio, landlords are required to pay 5% interest on any amount of a security deposit that is in excess of one month's rent. Say the rent is $600, the security deposit is $600 and the pet deposit is $150. The landlord would be obligated to pay interest on the $150 that is in excess of one month's rent.

WAIT! What about a pet fee? Sometimes landlords will charge a monthly pet fee in addition to the rent. Pet fees are not refundable. Can a pet fee be discriminatory? Maybe. For example, a landlord can't charge a pet fee for a service or support animal required by a person with a disability. Tenants with a disability may request a reasonable accommodation of a rental policy or procedure if they can show that there is a medical need. Support animals are not pets...therefore no pet deposit or pet fee. Examples of support animals could include a specially trained animal like a seeing-eye dog, but may also include a companion animal that is needed by a person with a mental health disability. Fair housing laws for support or service animals in housing settings are pretty broad. No special training required, but a landlord can ask for some proof of disability and the need for an animal. Years back, a child with ADHD got a prescription from his therapist for a companion dog, while other tenants in the same complex without out a diagnosis were required to pay the pet fee. On the other hand, in a small town in SW Ohio, everyone in town knew about the "dog doctor" who would write a prescription for anyone who came in for an appointment. Solution? The landlord can ask for more details about the connection between the disability and the accommodation. (HUD-DOJ Joint Memorandum on Reasonable Accommodations, (Question 18, page 13.) What if a service animal causes a damage and there's no pet deposit? The same memorandum states that the landlord may charge a fee for the damage caused by a service or support animal (Question 11, Example 2, page 9)

Landlords generally can't charge a fine or penalty, but sometimes a fee feels like that. In Russells Point, Ohio, each townhouse tenant is responsible to replace a burned out porch light. Typically, maintenance people would go through the property at dusk and when they saw a burned out porch light, they'd replace it and management would send the tenant a bill for $5. When tenants complained that the light bulb only cost a buck, management said it cost money to have the maintenance guys out checking. It felt like a penalty to the tenants. Lockouts are a common form of fee that absent minded tenants get charged for. Remember that fees have to be reasonably related to the cost of the service. In a case out of Lakewood Ohio, a landlord deducted $300 from a security deposit because he removed two bags of garbage left behind when they moved. Landlord argued that he was an attorney and his hourly billing rate was $100/hour, so he was entitled to charge for the travel time from his home, to the unit, to the tree lawn, and home again. The tenants won.