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June 22, 2009


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In the 1980s and 1990s when I rented, I never got my rent deposit back, ever, not once, even though I was a model tenant (neat young woman grad student).

I did get the "last months" rent part back, by deliberately not paying it, but the rest of the deposit? Forget it. Even without anyone getting foreclosed, even without a recession.

Basically, you should just have to realize that landlords are scum. They'll rip you off because they know your only recourse is small claims court and that's a costly bother.

As a landlord myself, I can't think of anything I'd be willing to do that would allow a tenant to protect himself from such a scenario.

There's no chance in heck I'd accept a tenant without a deposit.

You could propose something like putting your deposit into a bank account that requires both of your signatures to withdraw the money, but there's no way I'd agree to that as a landlord.

The only protection I'm aware of is small claims court: the landlord stops paying, you sue. (And then yeah, try to collect.)

@MC: not all landlords are scum. I don't know where you were renting from, but your generalizations really aren't appropriate.

I've received my security deposit back from both places I've rented in Chicago. It's really not that hard if you document everything in the place before you move in, then take pictures while you're moving out to show there is no damage or changes since the time you moved in.

Also, small-claims court is usually <$100 to file and if the landlord realizes you're serious about getting your deposit back, they'll refund it to not deal with court.

Sorry -- no advice specifically for the original question, but I would take a detailed look at your state's law for tenants. Many times your question will already be addressed.

I think that recent legislation basically guarantees you get at least 90 days notice to move out following a foreclosure.

Getting a security deposit back is always a crap shoot. Though individual landlords may be more blatant in not paying it back, Rental companies are only a little better by often making up some kind of excessive wear/damages charge and keeping half.

Even if you do lose the $1200-$1400, the $100-$200 saved each month will quickly recoup in:

* 6 months if you save $200 with a $1200 deposit
* 7 months if you save $200 with a $1400 deposit
* 12 months if you save $100 with a $1200 deposit
* 14 months if you save $100 with a $1400 deposit

Balance the amount you'll save against the risk of foreclosure and the time it would take to recoup your deposit.

If this is a strong concern, you could only apply for apartments at places that are paid off. Explain your concern, and anyone who won't tell is probably still paying a mortgage.


Technically, I think what you're looking for is an escrow account. You give your money to a neutral third party, and then whoever breaks the contract doesn't get the money back. For $1200, I think it's probably not worth it since escrow involves more fees.

I'd politely ask the landlord about their situation. If they own the property outright then you don't really have to worry about foreclosure. Or if they've owned the place for many years and have a stable job then thats probably fairly safe too. If they bought the house 2 years ago or are renting it cause they used to live there but can't afford the payments then thats more risky. But I would just ask them casually "how long have you owned it?" and "so what do you do for a living?" Rather than "I'm afraid you'll foreclose and I can't afford to lose my deposit" which would just scare off a landlord.

As a landlord, I would not agree to any kind of escrow system or reduced deposit. There would be too much risk that the tenant would skip out and I wouldn't get damages paid for.

Maybe they're worrying too much. The vast majority of properties in the USA are not in risk of foreclosure. The foreclosure rate is in the 1-3% rate annually nationally. Thats high relatively for foreclosures but its still better than 97% homes are not foreclosed on. If you're not in a high foreclosure state then you have even less to worry about.

MC's generalization of landlords as 'scum' is uncalled for and false. I'm a landlord and I am not 'scum'. My father is a landlord and he is not 'scum'. There are bad landlords out there but there are also many bad tenants too. I've been a renter myself and had good and bad landlords. I've been a landlord and seen good and bad tenants.

I've got my deposit back in the last two places I've rented. Granted both times it was a little bit of a struggle. This time however I have no fears of things being handled properly. My current landlord is a realtor and I actually made her my realtor and am purchasing a house through her. My deposit was put into some sort of escrow acct, which gains a small bit of interest. Not much but this was the only landlord to do this from anyone I know, all my friends were shocked at how responsible and fair it was on my landlord's behalf. Since I've been a good tenant I expect most if not all of it back and I wouldn't expect my landlord/realtor to delay at all as she has been the best landlord I've ever had. Maybe try and get your landlord to put it in a similar account, I had to fill out an I-9 for the interest it is earning and can only imagine this would get your landlord in more trouble if they don't pay up, since there is a paper trail.

It depends on who owns the landlord's loan. If it's a Fannie Mae/Freddie Mac, they will let you stay in your place.


Good luck.


in massachusetts, security deposit laws are very strict. your deposit would not be able to be touched by anyway legally. Even in foreclosure, the security deposit would remain with the property and when a new buyer takes over, it would transfer. A security deposit in mass is under the tenant's ss# so if anyone took it, it would be totally illegal and you could sue for triple damages plus court costs and you will win every time. I suggest you check your state's laws about security deposits and my guess is that you will find out that it is protected. I am a landlord and I never take security deposits because the paperwork, disclosures, and laws are very difficult to adhere to.

I've rented 5 different places from 5 different owners. Two were individual owners with no company involved. Two were individual owners with everything handled by a managment company. One was a large (100s of units) complex. I got substantially all of the security deposit back from each of them. The most difficult to get the security deposit back was the large complex -- I eventually got it, but they waited until the legal deadline to mail the check. The individual owners? No problem at all.

The "Helping Families Save Their Homes Act of 2009" may also give you some comfort.

Sorry - just realized that my Wikipedia link was useless because it doesn't discuss the tenant protection aspects of the Act.

Try this for a quick overview:

"Basically, you should just have to realize that landlords are scum. They'll rip you off because they know your only recourse is small claims court and that's a costly bother."

As MC and Jim said - don't generalize. Not only have I always got my complete deposit back when I rented - though I did rent from companies, but I also returned the deposit to the penny to my tenants when I was a landlord and couldn't have dreamed of doing otherwise. I view it the same as stealing. And no, they didn't use it during the last month - in fact, I charged first/last month rent upfront to prevent this. I also have raised the rent only once in 5 years because I appreciated how good my tenants were. Also when I was a tenant every lease said that the deposit is NOT the same as last month rent. Deposit is a protection in case something is broken or stolen.

Some landlords are scum - true. So are some tenants. I can tell you some horror stories from a couple of my close friends regarding thousands in unpaid rent or/and thousands in repairs needed. As a general rule, there are honest people and there is scum - among both landlords and tenants. Both landlords and tenants can go to court to get back deposit or, in case of the landlord, unpaid rent or damages. In many cases, the judge decides in your favor and even orders to pay for legal costs, but if the person is broke and doesn't pay, there is not much one can do.

I have rented at about 6 different places in Minnesota in my life. I never had any trouble getting all or most of my deposit money back. I am now a landlord and have always given back all or most of the deposit when there was minor damange (luckily I have not yet had major damage requiring me to keep most or all of the deposit and if the damage was bad the deposit likely would not be any where near enough). I am required by law in Minnesota to pay interest on the deposit and to return any deposit that is not used to cover damages.

There are some bad landlords out there, but I always try to treat my tenants fair and well and hope they will do the same to my property. MC has apparently had some bad experiences, but her/his generalizations are not fair to many good landlords. We put a lot on the line to provide reasonable housing in hopes that the tenants will pay our rent which we need to cover our costs and don't often have large profits left and hope they don't do too much damage to the property. Everyone knows that people are less likely to be as careful with something they are renting as if they owned it themselves. So we have plenty of risk as landlords too. I have had many great tenants who took great pride in the place they rented and I am careful about who I choose as tenants and try to keep the place nice and be an agreeable and helpful landlord. I hope that is reciprocated. But I would never cheat someone out of their deposit just because I thought I could get away with it. So I too would count myself in the not scum category.

Main problem is friends of friends have found their townhouse foreclosed upon and kicked out (deposit gone). Which worries me, especially knowing the prices in my area for housing is greatly inflated. I can easily see something happening like this in my area full of overpriced townhomes and condos.

Other kicker is I'm not guaranteed to stay for the full 12 month lease due to my job. I could be relocated anywhere as soon as 4 months from now. So I don't like the idea of assuming I have 12 months to recoup the money.

Guess everyones responses are what I expected. I have no choice but to take the risk.

re: Taking landlord to small claims court to get your deposit back.

A bigger problems is that searchable online databases have increased the cost to tenants who sue landlords who rip them off:

A tenant who sues to recover damages can easily be identified by all subsequent screening processes, and a tenant who has previously sued a landlord is considered too risky. (Just as a tenant who gets sued is viewed by other landlords as risky.)

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