Metro Apartment Manager, January 2006

Q: Gresham recently increased its business license fee so I’m now paying $25 per unit, which adds up to serious money since we have 60 units. We decided to pass that on to our tenants, so sent them a bill for the annual fee. A few objected that it didn’t seem fair. I explained that when taxes and utilities go up, we increase the rent. The only reason we billed this directly was that I don’t feel this kind of tax on landlords is fair, so wanted the tenants to know about it and to know they were paying it. One tenant is adamantly refusing to pay. I suppose I could take it out of his security deposit. Otherwise, am I correct that I need to use a 30-day for-cause notice?

A: You are right that the remedy for nonpayment of anything other than rent for the current month is a thirty-day notice. You are also right that you can take nonpayment of a fee out of the security deposit. The latter comes with caveats, however.

Security deposits can be withheld by a landlord for any physical damage to the premises and “to remedy the tenant’s defaults” under the rental agreement. That makes having a well-thought-out rental agreement important. I remember reading a rental agreement that neglected to require the tenant to return the premises clean — after the landlord had taken the tenant to court for not cleaning and therefore losing.

The law covering security deposits requires the landlord within 31 days after then end of the tenancy to account for any amount not returned to the former tenant within that time. The law doesn’t talk about claims made against the deposit during the tenancy but I know landlords routinely charge such little stuff to deposits and send tenants notice. Doing that has the benefit of not losing track of amounts owed you or arguing that the statute of limitations hasn’t run on that claim, but it has the disadvantage of reducing your security deposit which you may need some day.

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