If you’ve ever rented an apartment, chances are you shelled out at least several hundred dollars for the security deposit. This money acts as a type of insurance for the property owner, and it can be used to ensure tenants are serious about upholding the terms of their lease or to repair damages once tenants move out. For those who follow the rules and leave the apartment in good condition when they move out, the security deposit will be waiting in full. Even if there are minor damages, most people get back at least a portion of their deposit money. In a strange, yet common twist, however, landlords are constantly facing the issue of people not claiming their security deposits when they move out.
Why it Happens
If you’ve ever moved, you know how stressful it can be. The packing and transporting of all your worldly belongings is difficult enough, but moving can also bring with it stress related to a new job, moving away from friends and family or escaping a situation that no longer serves you. With so much going on, you might simply forget that you’re owed a security deposit at all. You might also forget to provide your landlord with a forwarding address or telephone number. This happens all too often, and it means apartment rental companies must spend time making efforts to find you in order to refund your deposit.
Steps Rental Companies Must Take
By law, the apartment rental company must make reasonable efforts to reach you. This means trying any physical addresses, phone numbers or email addresses they may have on file. If you are owed more than $250, the law requires them to also take the following steps:
- Keep the Security Deposit and any Related Records
Rental companies are generally required to keep security deposit records for a minimum of three years after the tenant has moved out. In the case of an unclaimed security deposit, it is even longer. The money will be kept in the company’s trust account during this time.
- Maintain a List of Abandoned Security Deposits
Every year, apartment rental companies must make a list of every security deposit they presume to be “abandoned” by a tenant they cannot reach after reasonable efforts are made. Deposits are usually considered abandoned after there is no activity by the tenant for one year. After this point, they must send one last letter of notice to the tenant’s last known address. If a tenant responds, their deposit will no longer be considered abandoned.
- Transfer Unclaimed Assets to the State Treasury Office
If the one-year mark has passed and the tenant has not responded to a final letter, the rental company will transfer the money from their account to the state treasury office in the state where the tenant rented the apartment.
At this point, unclaimed security deposits become searchable through the National Association of Unclaimed Property Administrators (NAUPA). Simply pop your name into the search box for the state in which you rented the apartment, and you’ll be able to see whether you are owed any funds.