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Comment by tyoma | Hacker News Reader

Refusing to return security deposits is absolutely a low income landlord strategy.

It was so endemic in Chicago that it was standard practice to withhold last month’s rent and send the landlord a letter saying to take the security deposit and send you a bill for any repairs.

This is both against the lease and financially equivalent to what an honest landlord would do, except the burden to get paid is now on the landlord.

If they have kept your security deposit in a separate, interest bearing account as the law requires[0] there should be no problem in the transaction.

0. Hahahahaha there was exactly one landlord I had who actually did this (not in Chicago) and returned my full security deposit with interest.

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> Refusing to return security deposits is absolutely a low income landlord strategy.

Oh I've had this happen to me from a "high income landlord" in San Francisco. Penny pincher lady living in a wealthy neighborhood, repairing herself the leaky roof of the SF building she owns with duct tape. Tried to keep my deposit until, like the comment you're replying to, I threatened to bring her to small claims court. I had the deposit in my mailbox the next day.

In Barcelona (and I think all of Spain), your 1-month deposit is kept by the state and is automatically returned to you unless the landlord can prove that you did something that entitles them to it.

The landlord is supposedly legally enforced to put the money in the chamber of commerce, but ALAS not all of them will (even if it's illegal) and many will also try to scam you out of your deposit if they see they can get away with it.

Its the same in the UK. But many landlords aren't compliant with this, and enforcement varies

In Chicago landlords have to send you an annual check paying out the interest, which during the low interest rate years amounted to 10-30¢ a year. The postage stamp cost more.

In response landlords started to require non-refundable move-in fees in lieu of a security deposit. These can range between about 40-60% of a month's rent.

This is considerably more fair than charging some tenants 100% of a months rent (if they don’t know their rights) and others 0% (if they do). Also the fact the money is gone is stated upfront and agreed to by both parties.

More fair but more deadweight loss for everyone involved.

I’ve never rented in a low-income area, but I’ve still had this problem with every single landlord I’ve had. Never did have the pleasure of meeting the “honest landlord” though I have always been, by all accounts, a model tenant.

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