Q. I gave my landlord a security deposit, first and last month's rent at move-in. Is he required to pay interest on any of that? I've lived in the apartment for twelve years.

A. Under Ohio law, a security deposit is any deposit of money or property to secure performance by the tenant under a rental agreement.

Ohio law also states that "any security deposit in excess of fifty dollars or one month's periodic rent, whichever is greater, shall bear interest on the excess at the rate of five per cent per annum if the tenant remains in possession of the premises for six months or more, and shall be computed and paid annually by the landlord to the tenant."

Wow, there's a lot going in there! Let's say your rent is $500 a month and your security deposit was $500. At move-in, you paid $1500. $500 of that was for the first month's rent. Now, we're left with $1000. You could make an argument that last month's rent was really part of the security deposit. Technically, the landlord held on to the extra $500 for almost twelve years.

If we interpret the statute correctly, it is saying that any security deposit greater than one month's rent ($50 doesn't come into play in this situation) shall earn interest ON THE EXCESS at the rate of five per cent per annum IF the tenant lives at the unit for six months or more.

The excess here is $500. That amount earns 5% interest per year if the tenant lives there for more than six months. Since the statute indicates that the interest should be paid annually, I'm assuming that the interest is not compounded in our twelve year scenario.

It appears that the tenant can argue that the landlord owes him $25 a year (5% interest on $500) for six years. Hey, that's $150. There's one big IF here - the tenant must convince the court that the last month's rent (collected up front) should be considered part of the security deposit.

If you found this information helpful and are looking for more information or would like to support this website, please consider ordering a copy of our security deposit recovery kit on Ohio landlord tenant law.

Disclaimer: The information provided on ohiolandlordtenant.com is not intended to be legal advice, but general information related to legal issues commonly encountered. The law in your state may be different from that discussed here. The facts in your case may be different too.

Having trouble finding what you are looking for, then search our site below:

	www.ohiolandlordtenant.com