how much interest should have been paid to me or decducted from my rent if I paid a $500 security deposit in 2004 and currently live in campbell, ca?

Asked by Johnellswife, 95008 Wed Oct 5, 2011

I moved into my apartment in 2004 and still live here (2011). I have never received a deduction on my rent or a check and recently found out I should have had either. How do I find the interest rates and if they change throughout the year?

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Shane Milne, Mortgage Broker Or Lender, South Jordan, UT
Wed Oct 5, 2011
California state law does not require landlords to pay interest on security deposits, but some local rent control laws do - Campbell, CA nor anywhere in Santa Clara County is subject to landlords having to pay interest on deposits. You go to http://www.ci.campbell.ca.us/Building/Housing.htm and down in the Housing Services section lists Project Sentinel which does rent mediation (408) 243-8565 http://www.housing.org knows all about landlord/tenant laws in Campbell & the entire county. As far as I can tell, only Berkeley, Santa Monica, and San Francisco have a law that says the landlord must pay interest.
0 votes
Don Tepper, Agent, Burke, VA
Wed Oct 5, 2011
You learn something new every day. You're correct . . . if you live in New Jersey. (Though it's confusing--you listed this as financing in Irvington, New Jersey, but you say you currently live in California):
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NEW JERSEY
Interest on your security deposit
The Rent Security Deposit Act requires landlords who rent 10 or more apartments to place tenants’ security deposits in either an insured money market fund or a federally insured bank account. The account must pay a rate of interest set at least quarterly and equal to the average rate of interest paid by the bank on money market accounts.

These higher interest accounts must be in New Jersey-based institutions. Cite: N.J.S.A. 46:8-19(a).

The law requires landlords who rent fewer than 10 apartments to place security deposits in bank accounts that pay at least the regular rate of interest. Cite: N.J.S.A. 46:8-19(b).

Whichever type of account your security deposit is in, all of the interest earned on it is yours. The law no longer allows the landlord to keep any amount to cover his or her administrative expenses. Cite: N.J.S.A. 46:8-19(a).

The law now requires that the interest earned on the deposit must either be paid to you in cash every year or subtracted from the amount of rent you owe on the renewal or the anniversary of the lease. This must be done either when your lease is to be renewed or on January 31 each year. (The landlord must give you a written notice that he or she will be paying you on January 31 of each year instead of the date your lease is renewed.) Cite: N.J.S.A. 46:8-19(c).
http://www.lsnjlaw.org/english/placeilive/irentmyhome/tenant…
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The question then is: What interest rate should you receive? Though what I've excerpted above is a summary of the actual law--not the law itself--it appears that the rate could vary slightly depending on whether your landlord is renting 10 or more units.

Here's the Federal Reserve page with all that information: http://www.federalreserve.gov/releases/h15/data.htm And, yes, interest rates do change. Example: Mortgage rates now are about 4%. I remember back in the late 1970 when they were around 17%. I remember when savings accounts paid 5% on your money. Now you're lucky to get 1%.

However, you're really not talking about a huge amount of money. I won't do it year-by-year, and I don't know whether your landlord rents 10 or more units. But let's assume that the average interest rate from 2004 to 2011 has been 3%. If that'd been in the bank, you'd have earned $615. If it had been paid back to you annually, you'd have received a check (or a rent credit) of $15.

One suggestion: Don't be confrontational with your landlord if you do raise this issue. Obviously, you've been a dependable tenant. And apparently your landlord has been good enough that you've continued renting from him for 7 years. You probably wouldn't want to jeopardize that relationship over a relatively small amount of money.

Hope that helps.
0 votes
Ron Thomas, Agent, Fresno, CA
Wed Oct 5, 2011
you mean that your lease agreement says that you will be paid interest on your deposit?

i have never heard of that.

it would have to be in writing, it would have to be extended for 7 years
and it would have to spell out the interest rate.
even at that, it could not be very much.

good luck and God bless
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