Many residential and commercial landlords are unfamiliar with the requirements which Missouri law imposes upon landlords with respect to security deposits. In Missouri, security deposits are governed by §535.300, RSMo. By law, a landlord is not permitted to demand or receive a security deposit in excess of two months’ rent. A landlord is not permitted to retain any portion of a security deposit following termination of the tenancy unless the landlord, within thirty (30) days of termination of the tenancy, has conducted an inspection of the unit in order to determine what amount, if any, should be withheld from the security deposit. The landlord is required to give the tenant reasonable notice, in writing, of the date and time when the landlord will inspect the unit following termination of the rental agreement and the tenant has the right to be present at the inspection. Within thirty (30) days after termination of the tenancy, the landlord is required to return the full amount of the security deposit to the tenant or furnish the tenant a written, itemized list, of the damages for which the security deposit or any portion thereof is to be withheld, along with the balance of the security deposit, if any. A landlord may withhold from the security deposit only such amounts as are reasonably necessary:
- To remedy a tenant’s default in the payment of rent;
- To restore the unit to its condition at the commencement of the tenancy, ordinary wear and tear excepted; or
- To compensate the landlord for actual damages sustained as a result of the tenant’s failure to give proper notice of lease termination, provided that the landlord is required to take reasonable steps to mitigate its damages.
A landlord who fails to comply with §535.300 is not entitled to retain any portion of a security deposit, and a landlord who withholds any portion of a deposit without complying with the statute may be assessed damages in an amount equal to twice the amount of the deposit withheld.
All landlords should utilize checklists to insure their compliance with Missouri law relating to security deposits, and carefully document all aspects of compliance.