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  • Tenant Wants to See Receipts

    I live in Pennsylvania

    I have charged a tenant for damage to a house he was renting from me. I took the appropriate money out of his secruity deposit and notified him within 30 days. Now he says he wants to see the receipts for the work that was done. Do I have to show him the receipts.

    Also, is there a minimun interest percentage that escrow accounts must earn?

  • #2
    Re: Tenant Wants to See Receipts

    Yes. Under Pennsylvania Landlord/Tenant law, landlords must provided a list of damages to a property they claim suffered damage at the hands of the tenant.

    Read on:


    Pennsylvania Security Deposit
    A security deposit is money which actually belongs to the tenant, but is held by the landlord for protection against damages or unpaid rent.

    Pennsylvania law places a limit on the amount of a security deposit that a landlord may charge. During the first year of a lease the landlord may not require a security deposit of more than two months' rent.

    At the beginning of the second year of a lease the landlord may not keep a security deposit equal to more than one month's rent and must return any money over one month's rent which the landlord still has.

    After five years the landlord cannot increase a security deposit even though the monthly rent is increased.

    The Landlord Tenant Act requires that interest be paid on security deposits held over two years.

    After taking out damages and unpaid rent, a landlord or property owner must send its tenants the list of damages and/or the full or partial security deposit no later than 30 days after the lease ends or when the landlord accepts the tenant's keys to vacate the premises early, whichever occurs first. The law requires landlords to pay twice the amount of the security deposit if they fail to provide consumers with the list of damages along with any refund due.

    At the end of the third year the landlord must start giving you the yearly interest that is received from the bank, less a 1 percent fee that the landlord may keep.

    The landlord does not have to pay interest to you during the first two years of the lease. A landlord may put up a bond instead of depositing security deposits in an escrow account. This bond guarantees that you will get back your deposit with interest at the end of the tenancy.

    RETURN OF DEPOSIT: Within 30 days after a tenant moves out, the landlord must give the tenant a written list of any damages.

    Reasonable wear and tear are not damages-and refund the security deposit less the cost of the repairs on the list. If the landlord fails to do this, you cannot be sued for any damages the landlord claims that you caused. In addition, if the landlord does not give you this 30-day notice you may sue for double the amount of your security deposit.

    Comment


    • #3
      Re: Tenant Wants to See Receipts

      The "yes" reply is not correct. Receipts are not provided to the tenant in PA.

      To answer your questions:
      You do need to pay interest. The statute doesn't list what amount of interest you must pay. It is assumed you will pay them the interest that their money earned in whatever interest bearing account you placed it. You don't pay any interest until the 25th month (they earn no interest for the 1st 2 yrs). You pay the tenant any interest earned at the end of the third and any subsequent year. You may deduct a 1% administrative fee from this interest. If you have placed this in a normal bank account, it is paying less interest than 1% interest. Show the interest on an account summary, then show you deducted 1%.

      You do NOT have to provide him with receipts at this time. Only CA requires receipts sent to the tenant. You have to provide only an itemized statement of damages to the tenant. Those itemized damages should show what was damaged, what was done to repair it, and how much it cost. An (itemized) written list of damages is not receipts. If the tenant wishes to challenge your deductions in small claims court, then you have to show receipts for these. Not before. Be prepared to show a judge the receipts.

      Comment


      • #4
        Re: Tenant Wants to See Receipts

        Excuse me, I thought the OP was asking about the list of damages.

        No, the landlord doesn't have to provide actual receipts from purchases, but they do need to provide a list of the damages. Otherwise, how would the tenant know how they arrived at the figure they arrived at? And at that, there are landlord's who over-pad their list of damages and fix a $5.00 problem with a $20.00 solution.

        The tenant is, it sounds like, gearing up to file an action against you in small claims court, so I hope you kept those receipts. In court, you will have to bring them as evidence.

        Comment


        • #5
          Re: Tenant Wants to See Receipts

          Originally posted by Unregistered View Post
          Excuse me, I thought the OP was asking about the list of damages.

          No, the landlord doesn't have to provide actual receipts from purchases, but they do need to provide a list of the damages. Otherwise, how would the tenant know how they arrived at the figure they arrived at? And at that, there are landlord's who over-pad their list of damages and fix a $5.00 problem with a $20.00 solution.

          The tenant is, it sounds like, gearing up to file an action against you in small claims court, so I hope you kept those receipts. In court, you will have to bring them as evidence.
          I would agree with this reply. It appears he quoted the law for that state which I am not familiar with, but it is pretty much the same in each state.

          If you are withholding for alleged damages, I would think you would want to provide receipts, and a specific list of whatever damages you are claiming. That way you put the tenant on notice of what your damages are. Why would you want to chance the tenant filing a claim in court, and potentially having to pay for witness fees, court costs, sheriff fees, interest, etc.?

          If you refuse his request, to me if I was a Judge, that would look like you have something to hide, maybe not required by law, but appears concealing to me.

          Put the shoe on the other foot. If you gave me a S.D. and I took out for whatever and did not explain why, would you ask me for what...? I think anyone would.

          Why wait for court to prove your point, when you can do it without court intervention?
          If you show him the proof now, maybe he can make a more logical decision whether or not to file a suit against you. Personally, if I knew you had proof of your damages and they were valid, I would most likely not risk all the costs of filing suit.

          Why are you withholding the receipts from the tenant?
          Did you put the tenants S.D. in a separate account?
          Did you notify him/her of where the S.D. was being held?
          Did you specifically point out the alleged damages to your tenant and the amounts thereof?
          What were the actual damages?
          Give the forum and opportunity to see/decide whether they are actual damages or normal wear and tear?

          Did you send a certified letter or un-certified letter? I don't know if your state requires a certified letter, most/should do.

          Comment


          • #6
            Re: Tenant Wants to See Receipts

            The tenants security deposit was placed in "a normal bank account, that was paying less interest than 1%" - will this be a problem? Should I have found an account that paid more than 1%?


            Also, I have all of the reciepts, plus pictures. Can the tenant still take me to small claims court to challenge the amount that that was used to make the repairs?

            Also, what is the down side of giving the tenant the reciepts and pictures at this point? Should I wait to go to small claims court?

            Comment


            • #7
              Re: Tenant Wants to See Receipts

              Yes, they certainly can, and for the reasons stated in post # 4. Landlords have to justify, in court, why it took a certain amount to fix or repair something. For instance, say a refrigerator needed replacing, or fixing. If the landlord went out and bought a brand new fridge, it is unrealistic to expect the tenant to pay for that brand new fridge when a used one would do. Or, if the seal needed replacing but the landlord replaced the entire fridge, the onus is on the landlord for the expense, as a new seal would have restored the old fridge to working condition. This is just one example in many.

              A landlord can come up with a myriad of justifications for why a repair to damages was so expensive, so that reason alone should give you pause to keep receipts and to have taken pictures of actual damage to prove justification for repairs made.

              Your first question depends on how long the tenant was in tenancy.

              If a tenant can prove that X repair could have been done at a more reasonable price than what money you paid to have it repaired, the judge will usually rule in their favor. There is no downside to providing the tenant with the receipts and pictures. I'm sure any tenant would want to see proof/justification for the charges they are obligated to pay. If they challenge you, that is entirely up to them.

              Comment


              • #8
                Re: Tenant Wants to See Receipts

                The tenants security deposit was placed in "a normal bank account, that was paying less interest than 1%" - will this be a problem? Should I have found an account that paid more than 1%?


                The tenant was there for 33 months. So 9 months after the secruity deposit began to collect interest. The interest was less than 1%

                Comment


                • #9
                  Re: Tenant Wants to See Receipts

                  I'm not understanding where you are getting the 1% interest rate. Where are you getting that?

                  If you read post number 2, which states laws in Pennsylvania, the only place it mentions 1% is the 1% fee a landlord may retain, but that is after the tenant has been there 3 years or more.

                  Again, please go back and read, carefully, post# 2 in its entirety.

                  Comment


                  • #10
                    Re: Tenant Wants to See Receipts

                    The account that the security deposit was place in was earning .465% interest per month. So if I deduct a 1% admin fee - the tenant would not receive any interest on the account. Correct?

                    Comment


                    • #11
                      Re: Tenant Wants to See Receipts

                      No. The 1% fee is based on the amount of the security deposit, plus any interest the deposit has thus far earned.

                      Comment


                      • #12
                        Re: Tenant Wants to See Receipts

                        All savings accounts are paying less than 1% in interest right now. Your interest rate sound correct for most banks. The 1% administrative fee you can keep eats up all of this interest, and then some!

                        Comment


                        • #13
                          Re: Tenant Wants to See Receipts

                          The percentage does not matter. Read post # 2 again.

                          Comment


                          • #14
                            Re: Tenant Wants to See Receipts

                            This isn't rocket science. I assume you meant that it earned .465 of 1% for the year. .465 would be 46 and 1/2%! .00465 is just less than 1/2 of 1%. That amount per month would be equal to 5.58% interest per year. No savings account pays that now. It is a yearly rate. The tenant DOES earn interest on that deposit for 9 months (months 25 through 33). 9 out of 12 months is .75.

                            1) Take the deposit amount x .00465 x .75 and that equals what interest they earned on the deposit.
                            2) Add that interest that they earned (from #1 above) to the original deposit amount. That gives you the current total they have on deposit.
                            3) Then multiply that amount (from #2 above) x .01 to get your 1% administrative fee.
                            4) Deduct your administrative fee (#3 above) from their total amount (#2 above) .

                            You will end up with less money than you started. An example with a $1000 deposit:
                            1) $1000 x .00465 x .75 = $3.49 interest earned on that deposit for those 9 months.
                            2) $1000 + $3.49 = $1003.49 total now on deposit.
                            3) $1003.49 x .01 = $10.03 for your administrative fee
                            4) $1003.49 - $10.03 = $993.46 still left on deposit after your fee and before deductions for damages.

                            For the itemized list of damages and deductions from the deposit, receipts are not required unless it goes to court (except in CA if deductions total over $125). Receipts are only shown if it goes to court or arbitration. Period. There can be charges for which there are no receipts. (For instance, states that allow a LL to deduct his own labor costs. Or supplies taken from the LL's stock on hand. The tenant still has to pay the fair market value of items used from supplies on hand.) There is a downside to providing receipts now. This allows the tenant to bargain shop to find lower prices for the goods or services, to attempt to prove that you overspent when you didn't. Don't provide any more ammunition to fuel a lawsuit. If they want to sue and you are in the right, any and all court costs will be on them. If you provide the itemized list as described below, that is all that is required. And even that isn't required in some states in certain instances.

                            An itemized list of damages states what was damaged, what needed to be done to repair it, and how much it costs. It could not say "Cleaning $100" since that isn't sufficient enough to allow a tenant to know what the deduction was for. It could say "Cleaning: wipe dirty kitchen counters, wash cabinets and walls to remove grease, clean dirty stove and fridge due to food buildup, sweep and mop sticky floor, scour dirty sink, wash baseboards to remove dust and pet hair, wash filthy windows that are on the ground floor - $100". The list must be itemized and specific enough that the tenant would know what was done and why.

                            As for damages, take dated digital photos of the damages, get receipts whenever possible. If you use items from stock, photograph them as well, and use the internet to get current values of those supplies for reference. Make sure you depreciate where ever required. The example of the fridge is one instance where the LL would have to depreciate if it could not be repaired. Follow the IRS guidelines on depreciation. Do not worry about law suits. Any one can sue anyone nowadays. Even if there is no merit to the suit.

                            Comment


                            • #15
                              Re: Tenant Wants to See Receipts

                              Originally posted by Unregistered View Post
                              This isn't rocket science. I assume you meant that it earned .465 of 1% for the year. .465 would be 46 and 1/2%! .00465 is just less than 1/2 of 1%. That amount per month would be equal to 5.58% interest per year. No savings account pays that now. It is a yearly rate. The tenant DOES earn interest on that deposit for 9 months (months 25 through 33). 9 out of 12 months is .75.

                              1) Take the deposit amount x .00465 x .75 and that equals what interest they earned on the deposit.
                              2) Add that interest that they earned (from #1 above) to the original deposit amount. That gives you the current total they have on deposit.
                              3) Then multiply that amount (from #2 above) x .01 to get your 1% administrative fee.
                              4) Deduct your administrative fee (#3 above) from their total amount (#2 above) .

                              You will end up with less money than you started. An example with a $1000 deposit:
                              1) $1000 x .00465 x .75 = $3.49 interest earned on that deposit for those 9 months.
                              2) $1000 + $3.49 = $1003.49 total now on deposit.
                              3) $1003.49 x .01 = $10.03 for your administrative fee
                              4) $1003.49 - $10.03 = $993.46 still left on deposit after your fee and before deductions for damages.

                              For the itemized list of damages and deductions from the deposit, receipts are not required unless it goes to court (except in CA if deductions total over $125). Receipts are only shown if it goes to court or arbitration. Period. There can be charges for which there are no receipts. (For instance, states that allow a LL to deduct his own labor costs. Or supplies taken from the LL's stock on hand. The tenant still has to pay the fair market value of items used from supplies on hand.) There is a downside to providing receipts now. This allows the tenant to bargain shop to find lower prices for the goods or services, to attempt to prove that you overspent when you didn't. Don't provide any more ammunition to fuel a lawsuit. If they want to sue and you are in the right, any and all court costs will be on them. If you provide the itemized list as described below, that is all that is required. And even that isn't required in some states in certain instances.

                              An itemized list of damages states what was damaged, what needed to be done to repair it, and how much it costs. It could not say "Cleaning $100" since that isn't sufficient enough to allow a tenant to know what the deduction was for. It could say "Cleaning: wipe dirty kitchen counters, wash cabinets and walls to remove grease, clean dirty stove and fridge due to food buildup, sweep and mop sticky floor, scour dirty sink, wash baseboards to remove dust and pet hair, wash filthy windows that are on the ground floor - $100". The list must be itemized and specific enough that the tenant would know what was done and why.

                              As for damages, take dated digital photos of the damages, get receipts whenever possible. If you use items from stock, photograph them as well, and use the internet to get current values of those supplies for reference. Make sure you depreciate where ever required. The example of the fridge is one instance where the LL would have to depreciate if it could not be repaired. Follow the IRS guidelines on depreciation. Do not worry about law suits. Any one can sue anyone nowadays. Even if there is no merit to the suit.
                              This was extremely helpful. Thank you.

                              Comment

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