CATHERINE M. MATTHEWS (R), GRI
Broker-In Charge, Callahan Realty, Ltd.
Past President, Oahu Chapter
National Association of Residential Property Managers
Q. I moved out of my apartment at the end of last month. My landlord hasn’t returned my deposit yet and says she needs to wait until her next payday. She had to replace the carpet in the unit because it was very old, not because I did anything. She says she is really short on money but will be sure to get it to me. She also said she is going to deduct $100 from my deposit to cover the “carpet cleaning” cost, but the carpets aren’t getting cleaned…they are being replaced.
I need the deposit now, not in another two weeks. I had to pay my new rent and my new deposit too. What can I do?
A. First, the landlord should NEVER have spent your security deposit. Licensed real estate agents are bound by very strict licensing laws governing the keeping and safeguarding of money that they hold for others, and these laws include security deposits. The same laws do not extend to individual owners.
HOWEVER, the exact same laws about refunding a deposit to a tenant apply to individual non-licensed landlords. Individual landlords may not have the same laws about separating funds and avoiding comingling (mixing together) of their personal funds with a tenant’s funds (deposit), but it is very good business sense to maintain a separate account to hold the security deposit for your tenant. By making a separate account, landlords ensure the deposit is always accounted for and never in question of being able to be refunded properly and timely. Security deposits are held in trust by landlords for tenants, as the money still belongs to the tenant during the tenancy.
Returning to your specific question, to summarize HRS Chapter 521-44, your security deposit must be returned to you postmarked no later than 14 days after your lease ends. Also, the landlord MUST provide you with receipts and estimates (followed by an invoice) for any deductions.
Unless you agree to an arbitrary deduction, such as $100 to cover the cost of carpet cleaning, this would be a very gray area. Your lease may call for a professional carpet cleaning, but if you do not arrange the carpet cleaning prior to vacancy because the landlord states that the carpets are being replaced, I don’t personally see aything in the law (keeping in mind that I am NOT an attorney) that allows her to charge you and just assess a fee. She can’t produce a receipt for a service that was not provided. You may want to voluntarily come to an agreement on this issue or she could in fact charge you to clean the carpets (assuming your lease requires this) and then rip them out anyway, which seems wasteful but has happened.
If the landlord fails to provide you with the receipts or estimates within 14 days, she forfeits the right to withhold ANY of your deposit even if otherwise warranted and she may be held liable to refund you triple the amount of the deposit. If there is a dispute about security deposits, the Hawaii Landlord-Tenant Code requires that the dispute be filed in small claims court, where neither party may be represented by an attorney. As a side note, this does not apply if a tenant abandons a property, but this is not your case.