Is it illegal for a landlord to spend a tenants security deposit?

My previous landlord spent my security deposit on something other than repairs and rent. She can't give me an accounting of what it was spent on (rather she wont) Is it illegal for her to spend my security deposit on whatever she wants?


She doesn't have the replacement cost, in fact she is filing bankruptcy. We already took her through small claims and the judgment is in our favor.

Update 2:

I live in Nevada

26 Answers

  • ?
    Lv 6
    1 decade ago
    Favorite Answer

    It depends on the laws of your state. Some require the deposit be put in an escrow account, though most have no such requirements. Regardless of what he can do with the money itself, he does have to give you money in the same amount of your deposit or an itemized list of repairs after you move out. You can sue if he does neither.


    If she goes into bankruptcy, there's likely nothing you can do. Her debt to you will likely be discharged.

  • Anonymous
    1 decade ago

    Technically when you give a security deposit to a landlord they have to take that money and put it in an account separate from their normal checking or savings account. You are entitled to any interest they earn on that money. It's worth noting though that I've NEVER seen any landlord follow these rule and I've lived in (or had other college friends who lived in) quite a few apartments. Nobody seems to fight their landlord for the interest earned because it's usually about 52 cents.

    Once you leave the apartment the landlord is typically required to get your deposit back to you in a certain time period, (varies from state but it's usually 30-60 days), unless you caused damages to the apartment that require repair. If repairs need to be done than the landlord can use your deposit money to make the repairs assuming that they aren't "normal wear and tear".

    If your landlord refuses to give you information regarding what your deposit was spent on then you have every right to take them to court...this can be pretty costly and time consuming though which is why most tenants don't do it. A really scummy landlord will bank on the fact that you won't take him/her to court and just keep your deposit claiming that you damaged the apartment.

  • What state/country are you in? The laws vary by jurisdiction, but in most US states, YES IT IS ILLEGAL for the landlord to spend your security deposit on her own expenses!

    Everyone above who says the landlord can spend it on whatever she wants as long as she pays it back when you move out is WRONG and doesn't know what he/she is talking about!!

    In most US states, the landlord is required to put your security deposit in an escrow account in your name, and NOT spend it OR even mix it with her own money. Failure to follow this law usually results in big penalties for the landlord (e.g. having to return the deposit, or owing the tenant 2-3 months' rent).

    However, if your landlord actually declares bankruptcy, you probably won't be able to collect the money: the debt will be discharged. But only if your landlord actually declares bankruptcy through the federal courts: not if your landlord just tells you she's "bankrupt." Ask to see a court order, and don't take her word for it. In fact, she has to serve you with official papers from the court when she declares bankruptcy, or else her debt to you won't be discharged. And you can go to court during her bankruptcy hearing and ask for some of her assets (if she has any).

    Source(s): law school (disclaimer: i am NOT a lawyer and cannot give legal advice. giving general information only.)
  • 1 decade ago

    No, she can only use the money for repairs/cleaning after you have left the apartment, and cannot apply it to anything else, such as back rent.

    And in some states, she has to also give you the interest earned on the deposit while it was in the bank.

    However, since you've already gotten a judgment against her, I fail to see why you are asking this question.

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  • Anonymous
    1 decade ago

    Technically, yes. She's supposed to put it in an interest bearing escrow.

    But, basically as long as she gives you your security back when you give back the apartment is pretty much a non-issue.

    Now if you left the apartment and you aren't given your security back without reasons (the security is there to give the landlord the ability to pay for damages you may have done to the apartment) then you can go to small claims court to reclaim your security from her.

    Source(s): myself
  • 1 decade ago

    She can't spend it on whatever she wants. She can spend, after you've move out, on anything that was apartment related regarding cleaning, repair, etc.

    Call your local Attorney General and tell them the situation. Their consumer protection department should be able to help you.

    Some law schools offer free help. They can tell you how to go about collecting money from your judgment and pressing charges, if applicable. The bankruptcy court may handle the collections depending on the whole scenario.

    It sounds to me like she thought she could spend your money and then be protected by bankruptcy.

  • Anonymous
    5 years ago

    It depends on the state that you live in. For example, in NY, landlords are required to keep deposits separate from there own monies. If this is the case where you live, you might be able to keep what you are owed out of the bankruptcy. However, it sounds like it will be difficult, costly and time consuming to follow up on this. It is up to you to decide if you want to do this.

  • 1 decade ago

    Your security deposit is suppose to be put into an interest bearing account specifically for you, or a join-tenant account with meticulous records. Within 30 days of leaving that apartment you are entitled to an accounting or refund.

  • Anonymous
    1 decade ago

    She can spend it on anything she want's as long as you get it back in the end. If she does not give it back to you in the end it is becuase she has to repair the house with it or she did spend it on something eles and at that point is where you need to go get a lawyer and tell them about the problem.

  • 1 decade ago

    Usually (if not universally), yes. Landlord/tenant laws are state by state, but generally they have to hold it in a separate (interest bearing) account and provide you with a statement. Usually a tenant can pretty easily go after a landlord that does not do so.

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