PRINTER'S NO. 3599
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No.
2427
Session of
2020
INTRODUCED BY GAYDOS, APRIL 21, 2020
REFERRED TO COMMITTEE ON CONSUMER AFFAIRS, APRIL 21, 2020
AN ACT
Amending the act of April 6, 1951 (P.L.69, No.20), entitled "An
act relating to the rights, obligations and liabilities of
landlord and tenant and of parties dealing with them and
amending, revising, changing and consolidating the law
relating thereto," in recovery of possession, further
providing for escrow funds limited and for recovery of
improperly held escrow funds.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Sections 511.1 and 512 of the act of April 6,
1951 (P.L.69, No.20), known as The Landlord and Tenant Act of
1951, are amended to read:
Section 511.1. Escrow Funds Limited.--(a) No landlord may
require a sum in excess of two months' rent to be deposited in
escrow in the form of cash or other security in accordance with
subsection (d.1) for the payment of damages to the leasehold
premises and/or default in rent thereof during the first year of
any lease.
(b) During the second and subsequent years of the lease or
during any renewal of the original lease the amount required to
be deposited may not exceed one month's rent.
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(c) If, during the third or subsequent year of a lease, or
during any renewal after the expiration of two years of tenancy,
the landlord requires the one month's rent escrow provided
herein, upon termination of the lease, or on surrender and
acceptance of the leasehold premises, the escrow funds together
with interest shall be returned to the tenant in accordance with
sections 511.2 and 512.
(d) Whenever a tenant has been in possession of premises for
a period of five years or greater, any increase or increases in
rent shall not require a concomitant increase in any security
deposit.
(d.1) A tenant shall have the right to satisfy the amount
required to be deposited in the form of:
(1) cash through a schedule of installment payments,
specified in the contract, for a period of no less than three
months; or
(2) other security acceptable to the landlord.
(d.2) If a landlord requires a security deposit, the
landlord must participate in a deposit alternative program, such
as lease insurance, which allows the renter an alternative
option to placing a security as defined in subsection (d.1). The
following apply:
(1) A landlord may charge the tenant a monthly fee no
greater than 7% of the monthly lease value to offset the
landlord's costs associated with the landlord's participation in
any deposit alternative or lease insurance programs.
(2) The deposit alternative or lease insurance provider must
be an approved carrier and reinsured by a carrier licensed by,
and in good standing with, the Insurance Department.
(3) The deposit alternative or lease insurance coverage must
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be effective upon the payment of the first premium and remain
effective for the entire lease term.
(e) This section applies only to the rental of residential
property.
(f) Any attempted waiver of this section by a tenant by
contract or otherwise shall be void and unenforceable.
Section 512. Recovery of Improperly Held Escrow Funds.--(a)
Every landlord shall within thirty days of termination of a
lease or upon surrender and acceptance of the leasehold
premises, whichever first occurs, provide a tenant with a
written list of any damages to the leasehold premises for which
the landlord claims the tenant is liable. Delivery of the list
shall be accompanied by payment of the difference between any
sum deposited in escrow, including any unpaid interest thereon,
for the payment of damages to the leasehold premises and the
actual amount of damages to the leasehold premises caused by the
tenant. If a deposit alternative insurance policy has been
sourced and delivered by the tenant and accepted by the landlord
as the security under this act, the landlord shall include with
the list a copy of any claim filed by the landlord with the
insurer under the policy and a statement of the claim status. If
a form of security other than cash or an insurance policy has
been delivered by the tenant and accepted by the landlord as the
security deposit under this act, the landlord shall include with
the list a statement as to the status of the security. Nothing
in this section shall preclude the landlord from refusing to
return the escrow fund, including any unpaid interest thereon,
for nonpayment of rent or for the breach of any other condition
in the lease by the tenant.
(b) Any landlord who fails to provide a written list and, if
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applicable, a copy of any insurance claim and statement of claim
status or statement relating to security status within thirty
days as required in subsection (a), above, shall forfeit all
rights to withhold any portion of sums held in escrow, including
any unpaid interest thereon, to payment under the insurance
claim, if applicable, or to bring suit against the tenant for
damages to the leasehold premises.
(c) If the landlord fails to pay the tenant the difference
between the sum deposited in the form of cash, including any
unpaid interest thereon, and the actual damages to the leasehold
premises caused by the tenant within thirty days after
termination of the lease or surrender and acceptance of the
leasehold premises, the landlord shall be liable in assumpsit to
double the amount by which the sum deposited as cash in escrow,
including any unpaid interest thereon, exceeds the actual
damages to the leasehold premises caused by the tenant as
determined by any court of record or court not of record having
jurisdiction in civil actions at law. The burden of proof of
actual damages caused by the tenant to the leasehold premises
shall be on the landlord.
(d) Any attempted waiver of this section by a tenant by
contract or otherwise shall be void and unenforceable.
(e) Failure of the tenant to provide the landlord with his
new address in writing upon termination of the lease or upon
surrender and acceptance of the leasehold premises shall relieve
the landlord from any liability under this section.
(f) This section shall apply only to residential leaseholds
and not to commercial leaseholds.
Section 2. This act shall apply to leases entered into,
renewed or amended on and after the effective date of this
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section.
Section 3. This act shall take effect in 60 days.
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