Question:
Security Deposit Limited to 2 months ? receiving 6 month Security Deposit + Last month rent
Maryland Landlord Tenant Act
I have a tenant (potential tenant) with poor application and poor credit and poor rental verification, poor (unverifiable income references and employment references) so basically what ever is the application you can consider YOU DO NOT HAVE AN APPLICATION –
The credit reports show the Tenant had previous filed bankruptcy.
In order to offset, the 'weak' application, The Tenant offered a 6 month Security Deposit + Last month rent ($3,700 x 7 = $25,900), which I accepted and we signed a 3 year residential lease on a single family house. The deposit is paid in installments over the next 6 months. Tenant paid already 2 months security deposit and will pay 1 more month Security Deposit before moving in along with the first month rent.
The next day, I started reading the Maryland Landlord Tenant Act and discovered that I am only entitled to 2 months Security Deposit (including a last month rent) and that the Tenant can sue me the Landlord for 3 times the amount of Security Deposit for having gotten more Security Deposit then what is permitted by Law (Maryland Landlord Tenant Act). Is my reading of the Law correct?
If so how can I resolve this? Should I just not accept to receive the Security Deposit and last month rent that are in excess of the 2 months allowed by law? But then I got the lease signed already and I end up with a very 'risky' tenant without the extra Security of a Security Deposit in excess of the 2 months permitted by Law.
I can not even call the additional monies pre-paid rent because this would still fall in the 2 months limitation for both Security Deposit and Pre-paid rent.
I am considering calling it pet deposit (tenant has 2 dogs) but a pet deposit can not be a large amount, so the max I could put under a 'pet deposit' I would think is about $1,000. So this not a solution the Deposit being $25,900 ( 7 months ).
The risk for me is great to be sued for 3 times that amount by the Tenant and the risk is also great for having now a Tenant with poor payment record, bankruptcy and poor and unverifiable data in the rental application. The tenant has not moved in yet, he will later, next month.
I am also wondering if this possibly a set up by the Tenant, in order for him to sue me for 3 times the amount of the deposit. (may be he is aware of this provision in the Maryland Landlord Tenant Act) and I was not. I am being suspicious because, it seems a 'too good to be true' scenario where a tenant comes and offers that much security deposit. (wondering what could it be hiding besides the poor application qualifications of the tenant)
My reading of the Law is correct?
Any solutions? For my situation. Any ideas? Any suggestions?
Maryland Landlord Tenant Act
§ 8-203
(a)
(3) "Security deposit" means any payment of money, including payment of the last month's rent in advance of the time it is due,
Section § 8-203
(b)
(1) A landlord may not impose a security deposit in excess of the equivalent of two months' rent per dwelling unit, regardless of the number of tenants.
(2) If a landlord charges more than the equivalent of two months' rent per dwelling unit as a security deposit, the tenant may recover up to threefold the extra amount charged, plus reasonable attorney's fees.
(3) An action under this section may be brought at any time during the tenancy or within two years after its termination.
Security Deposit Limited to 2 months ? receiving 6 month Security Deposit + Last month rent
Maryland Landlord Tenant Act
I have a tenant (potential tenant) with poor application and poor credit and poor rental verification, poor (unverifiable income references and employment references) so basically what ever is the application you can consider YOU DO NOT HAVE AN APPLICATION –
The credit reports show the Tenant had previous filed bankruptcy.
In order to offset, the 'weak' application, The Tenant offered a 6 month Security Deposit + Last month rent ($3,700 x 7 = $25,900), which I accepted and we signed a 3 year residential lease on a single family house. The deposit is paid in installments over the next 6 months. Tenant paid already 2 months security deposit and will pay 1 more month Security Deposit before moving in along with the first month rent.
The next day, I started reading the Maryland Landlord Tenant Act and discovered that I am only entitled to 2 months Security Deposit (including a last month rent) and that the Tenant can sue me the Landlord for 3 times the amount of Security Deposit for having gotten more Security Deposit then what is permitted by Law (Maryland Landlord Tenant Act). Is my reading of the Law correct?
If so how can I resolve this? Should I just not accept to receive the Security Deposit and last month rent that are in excess of the 2 months allowed by law? But then I got the lease signed already and I end up with a very 'risky' tenant without the extra Security of a Security Deposit in excess of the 2 months permitted by Law.
I can not even call the additional monies pre-paid rent because this would still fall in the 2 months limitation for both Security Deposit and Pre-paid rent.
I am considering calling it pet deposit (tenant has 2 dogs) but a pet deposit can not be a large amount, so the max I could put under a 'pet deposit' I would think is about $1,000. So this not a solution the Deposit being $25,900 ( 7 months ).
The risk for me is great to be sued for 3 times that amount by the Tenant and the risk is also great for having now a Tenant with poor payment record, bankruptcy and poor and unverifiable data in the rental application. The tenant has not moved in yet, he will later, next month.
I am also wondering if this possibly a set up by the Tenant, in order for him to sue me for 3 times the amount of the deposit. (may be he is aware of this provision in the Maryland Landlord Tenant Act) and I was not. I am being suspicious because, it seems a 'too good to be true' scenario where a tenant comes and offers that much security deposit. (wondering what could it be hiding besides the poor application qualifications of the tenant)
My reading of the Law is correct?
Any solutions? For my situation. Any ideas? Any suggestions?
Maryland Landlord Tenant Act
§ 8-203
(a)
(3) "Security deposit" means any payment of money, including payment of the last month's rent in advance of the time it is due,
Section § 8-203
(b)
(1) A landlord may not impose a security deposit in excess of the equivalent of two months' rent per dwelling unit, regardless of the number of tenants.
(2) If a landlord charges more than the equivalent of two months' rent per dwelling unit as a security deposit, the tenant may recover up to threefold the extra amount charged, plus reasonable attorney's fees.
(3) An action under this section may be brought at any time during the tenancy or within two years after its termination.