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  1. #1

    Thumbs down "Non-Refundable" Security Deposit

    My question involves a security deposit in the State of: Colorado.

    I am looking to move and was just reading over a lease. They want a $300 security deposit, $100 of which is Non-refundable. In addition to this there is a $100 Non-refundable Pet Deposit.

    I've paid non-refundable pet deposits before, but isn't that kind of odd to automatically state that 1/3rd of the housing deposit will not be returned?

    I'm assuming there is no law against non-refundable deposits, I'm assuming it's just shady landlord-ing, but would love to know otherwise if anyone has advice.

  2. #2
    Join Date
    Mar 2008
    Posts
    1,995

    Default Re: "Non-Refundable" Security Deposit

    Quote Quoting oncegoneagain
    View Post
    My question involves a security deposit in the State of: Colorado.

    I am looking to move and was just reading over a lease. They want a $300 security deposit, $100 of which is Non-refundable. In addition to this there is a $100 Non-refundable Pet Deposit.

    I've paid non-refundable pet deposits before, but isn't that kind of odd to automatically state that 1/3rd of the housing deposit will not be returned?

    I'm assuming there is no law against non-refundable deposits, I'm assuming it's just shady landlord-ing, but would love to know otherwise if anyone has advice.
    It's just bad terminology.

    But "to pay" to lease a place had been established practice for a long time. Out where I am, it's referred to as "key money", basically, you pay the fees, you get the keys. It's been quite common and expected in commercial leases.

    As far as I know, legally, it's never been referred to as key money. For commercial leases, it's sometimes referred to as an advance payment, or leaseup fee. It's somewhat unethical and illegal when it is paid under the table, where it's paid to a leasing agent in cash for instance, as a bribe.

    However if it's all in black and white on the lease, it is part and parcel of the rent payments, and legal. In fact it's like the baggage fee that airlines charge nowadays on top of the ticket.

    To be technical, "nonrefundable" and "deposit" is an oxymorom.

  3. #3
    Join Date
    Jan 2006
    Posts
    38,867

    Default Re: "Non-Refundable" Security Deposit

    somebody needs to check out the actual laws. I know some states where something that is intended to be retained by the LL, it must be referred to as a fee. As chin stated, nonrefundable and deposit are incongruent terms.

    if it is referred to as a security deposit, my suspicions are that they cannot retain any portion of that unless justified with deductions as allowed by law. If they list it as a rental fee, or app fee, or a i want to charge you because I can fee, then it is a very different situation.

  4. #4

    Default Re: "Non-Refundable" Security Deposit

    The most disturbing part of this is that it is a roommate/room rental, I would not even be renting the entire house. I would be responsible for 1/3rd of the rent, etc. And the other tenants are the LL's daughter and her boyfriend.

    Colorado State Law states:
    definition of "security deposit" - means any advance or deposit
    of money, regardless of its denomination, the primary function of
    which is to secure the performance of a rental agreement for
    residential premises or any part thereof.

    And also states: "No security deposit shall be retained to cover
    normal wear and tear." in the rules stating procedures to return/keep security deposits. (so if they say this $100 of the deposit is to cover cleaning cost or wear and tear, they would need to re-word the agreement...right?)

    So my own interpretation is that I am contacting the LL and asking them to revise the Lease to call it a fee (or remove it altogether), or that I will not sign the lease since I am pretty sure it would be illegal for them to keep any part of a deposit (unless I cause damages, of course).

    Thanks for the help :-)

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