How Do I Figure Out The Interest My Landlord Owes Me For My Deposit?
I‘m about to move out of my apartment that I’ve lived in since December 2005. What’s the deal with the Landlord’s who must pay the interest on security deposits to the tenants? I have never received this interest from this landlord. Can I make her pay this to me?
Absolutely. San Francisco Administrative Code §49.2 provides that simple interest shall be paid to tenants who have lived in their units for at least one year. The interest rates for each year are calculated by the San Francisco Rent Board.The interest is payable annually.
The law applies to all rental units in San Francisco, not just rent controlled units. Interest is due on an annual basis.
A landlord is liable to a tenant for interest on the security deposit if the tenant vacates the unit after more than one year. A tenant who vacates at the expiration of a one-year lease is not entitled to interest on her deposit. This is a source of confusion because some landlords read this as not owing interest for the first year when calculating interest for a qualified tenant, but that is not true.
As I said in, Tenant Troubles: Does My Landlord Owe Me Interest For My Security Deposit?, “It’s one of the few times tenants get to act like Capital One. The interest starts accruing the second the landlord gets his mitts on the dough!”
Before you demand the interest from the landlord, you should calculate how much the landlord owes you. In Does My Landlord Owe Me Interest… I illustrate the often cumbersome procedure to calculate interest. The procedure is also described on the Rent Board website. (BTW, when I reviewed the old column yesterday I realized my math was off, the method was fine but the results were wrong.)
If the landlord paid Rent Board fees you will need to subtract your share of those fees from the total interest. A tenant’s share of the fees is also provided by the Rent Board. The fees are assessed on a per unit basis. Tenants are responsible for half of the annual fee. Payment is accomplished by deducting the fee from the annual interest owed. If the landlord pays interest annually (many do not) and your security deposit is small, there may be years when you owe him money for part of the fee.
The law permits the landlord to collect the tenant’s portion of the Rent Board fee from those tenants in occupancy as of November 1st of each year.This is key because, for example, if your lease did not commence until after November 1st, you will not be liable for fees assessed during the first tax year of your tenancy.
Using December 1, 2005 as the date of inception of your lease, a hypothetical $1000.00 security deposit and assuming a move-out February 29, 2012, your landlord will owe you $185.98. If the landlord paid Rent Board fees, subtracting your share of $82.00, your landlord owes you $103.98. Why didn’t I painstakingly go through the calculation process here? I didn’t need to.
I used the San Francisco Security Deposit Interest/Rent Board Fee Calculator to come up with your interest.
The folks at ReLISTO a San Francisco Bay Area residential leasing brokerage, developed the calculator to do the work for me! It even navigates the mid-year change in interest rate in August 2002!
Back in 2009 I lamented, “There has got to be a way to develop an automatic calculator for this.” By god they did it! This is a service that will save (me, at least) hundreds of hours of tedious work–hours better spent investigating and writing about landlord abuses. This is probably the only time I will ever publicly plug a real estate company.
Disclosure: When I did the calculation by hand, I got $185.99. I spoke to Eric Baird at ReLISTO. He sent me some spread sheets based upon a couple of examples we discussed. The difference is based upon rounding methodology, number of days in a year, etc. But a penny or two difference does not warrant the time spent to shlog through the complex calculation by hand.
Use this calculator to figure your actual interest and Rent Board fees and remind the landlord that she owes you.
When you have to sue her to return the security deposit, add the interest to your demand.