Landlord Tenant Law Changes – Reminder
A reminder to all landlords about a significant change in the Landlord-Tenant Law. Don’t be caught unaware. Missouri revised the law concerning tenant security deposits. Made effective August 28, 2016, this change results in a necessary modification of procedures for the vast majority of property owners and developers. The law specifies how tenant security deposits must be handled.
Tenant Security Deposits
Before the enactment of this change, tenant security deposits could be placed into the landlord’s general operating account. Under the revised law, these deposits must be held in a trust account at a credit union, bank or depository institution insured by an agency of the federal government and segregated from a landlord’s operating accounts.
In a nutshell, landlords who routinely keep tenant security deposits in their operating accounts and refund said deposit at the end of the tenant’s occupancy/term will now need to establish separate accounts to satisfy the new law. While this may be an inconvenience for landlords, it is important to comply with the new regulation.
This is the actual language of the law …
All security deposits shall be held by the landlord for the tenant, who is a party to the rental agreement, in a bank, credit union, or depository institution which is insured by an agency of the federal government. Security deposits shall not be commingled with other funds of the landlord. All security deposits shall be held in a trust established by the landlord and deposited in a bank, credit union, or depository institution account in the name of the trustee. Any interest earned on a security deposit shall be the property of the landlord. A landlord licensed under and subject to the requirements of chapter 339, in lieu of complying with this subsection, shall maintain all tenant security deposits in a bank, credit union, financial or depository institution account, and shall not commingle such security deposits with other funds of the landlord except as provided in section 339.105. A housing authority created under section 99.040 or any other government entity acting as a landlord shall not be subject to this subsection.
An additional change in the law provides landlords with the permission to charge tenants for carpet cleaning assuming their lease form specifies the charge.