Can a Security Deposit Be Retained By Landlord in Georgia?
Full Question:
Answer:
An oral agreement to lease a premises for not more than a year is enforceable. A tenant under an oral lease is typically considered a tenant-at-will, and as such, the tenant must give 30 days' written notice to terminate the tenancy early. If the landlord is not at fault, your rights to a return of the deposit will be governed by the terms of the agreement regarding refunding the deposit. If the agreement isn't followed, or the landlord was at fault for your decision to end the tenancy, it is possible to file a claim for breach of contract. A mechanics lien may only be filed if you weren't paid for work performed on the property.
Contracts are agreements that are legally enforceable. A contract is an agreement between two parties that creates an obligation to do or refrain from doing a particular thing. The purpose of a contract is to establish the terms of the agreement by which the parties have fixed their rights and duties. An oral contract is an agreement made with spoken words and either no writing or only partially written. An oral contract may generally be enforced the same as a written agreement. However, it is much more difficult with an oral contract to prove its existence or the terms.
Oral contracts also usually have a shorter time period within which a person seeking to enforce their contract right must sue. A written contract generally provides a longer time to sue than for breach of an oral contract. Contracts are mainly governed by state statutory and common (judge-made) law and private law. Private law generally refers to the terms of the agreement between the parties, as parties have freedom to override many state law requirements regarding formalities of contracts. Each state has developed its own common law of contracts, which consists of a body of jurisprudence developed over time by trial and appellate courts on a case-by-case basis.
An unjustifiable failure to perform all or some part of a contractual duty is a breach of contract. A legal action for breach of contract arises when at least one party's performance does not live up to the terms of the contract and causes the other party to suffer economic damage or other types of measurable injury. A lawsuit for breach of contract is a civil action and the remedies awarded are designed to place the injured party in the position they would be in if not for the breach. Remedies for contractual breaches are not designed to punish the breaching party.
A lien is a claim to property for the payment of a debt, typically one connected to the property. It is the right to retain the lawful possession of the property of another until the owner fulfills a legal duty to the person holding the property, such as the payment of lawful charges for work done on the property. The right of lien generally arises by operation of law, but in some cases it is created by express contract. There are two kinds of liens; particular and general. When a person claims a right to retain property, due to money or labor invested in that property, it is a particular lien. Liens may arise by express contract; from implied contract, as from general or particular usage of trade; or by legal relation between the parties, such as created with common carriers and inn keepers. In certain circumstances, the lien holder may foreclose on the property if the debt is not paid in full.
To create a valid lien, it is essential that the party claiming a lien should have the absolute property or ownership of the thing or, at least, a right to vest it; that the party claiming the lien should have an actual or constructive, possession, with the assent of the party against whom the claim is made; that the lien should arise upon an agreement, express or implied and not be for a limited or specific purpose that contradicts the express terms or the clear, intent of the contract. In certain circumstances, the lien holder may foreclose on the property if the debt is not paid in full. Liens can generally be removed by the payment of the amount owed. This payment can occur at any time up to and including the stage at which the closing documents for the sale of the property are signed.
There are several types of liens, all of which could cloud the title and prevent the seller from conveying marketable title to the buyer. A judgment lien is created when a court grants a creditor an interest in the debtor's property, based upon a court judgment. A judgment lien can be filed if an actual judgment in a lawsuit is obtained from a court. Such cases include failure to pay a debt, including credit cards, bank loans, or deficiency judgments on repossessed vehicles. In some circumstances, judgments can be enforced by sale of property until the amount due is satisfied. A plaintiff who obtains a monetary judgment is termed a "judgment creditor." The defendant becomes a "judgment debtor." secure payment of the claim to the injured party. After the judgment creditor places a lien upon the attached property, the next step in the collection process is to conduct a sale of the attached property to satisfy the judgment debt.
Liens that arise in construction situations include construction liens, contractor liens, mechanic liens, attorney liens, architect liens and other liens applicable in your state. By virtue of express statutes in most states, mechanics and material men or persons who furnish materials for the erection of houses or other buildings, are entitled to a lien or preference in the payment of debts out of the houses and buildings so erected and to the land, to a greater or lessor extent, on which they are erected.
The following are GA statutes:
44-7-2. (a) Contracts creating the relationship of landlord and tenant
for....
(a) Contracts creating the relationship of landlord and tenant for
any time not exceeding one year may be by parol.
(b) In any contract, lease, license agreement, or similar agreement,
oral or written, for the use or rental of real property as a dwelling
place, a landlord or a tenant may not waive, assign, transfer, or
otherwise avoid any of the rights, duties, or remedies contained in
the following provisions of law:
(1) Code Section 44-7-13, relating to the duties of a landlord as to
repairs and improvements;
(2) Code Section 44-7-14, relating to the liability of a landlord for
failure to repair;
(3) Ordinances adopted pursuant to Code Section 36-61-11;
(4) Article 3 of this chapter, relating to proceedings against
tenants holding over;
(5) Article 4 of this chapter, relating to distress warrants;
(6) Article 2 of this chapter, relating to security deposits; and
(7) Any applicable provision of Chapter 11 of Title 9 which has not
been superseded by this chapter.
(c) A provision for the payment by the tenant of the attorney's fees
of the landlord upon the breach of a rental agreement by the tenant,
which provision is contained in a contract, lease, license agreement,
or similar agreement, oral or written, for the use or rental of real
property as a dwelling place shall be void unless the provision also
provides for the payment by the landlord of the attorney's fees of
the tenant upon the breach of the rental agreement by the landlord.
44-7-7. Sixty days' notice from the landlord or 30 days' notice from
the....
Sixty days' notice from the landlord or 30 days' notice from the
tenant is necessary to terminate a tenancy at will.
44-7-31. Except as provided in Code Section 44-7-32, whenever a
security....
Except as provided in Code Section 44-7-32, whenever a security
deposit is held by a landlord or such landlord's agent on behalf of a
tenant, such security deposit shall be deposited in an escrow account
established only for that purpose in any bank or lending institution
subject to regulation by this state or any agency of the United States
government. The security deposit shall be held in trust for the tenant
by the landlord or such landlord's agent except as provided in Code
Section 44-7-34. Tenants shall be informed in writing of the location
of the escrow account required by this Code section.
44-7-32. (a) As an alternative to the requirement that security deposits
be....
(a) As an alternative to the requirement that security deposits be
placed in escrow as provided in Code Section 44-7-31, the landlord may
post and maintain an effective surety bond with the clerk of the superior
court in the county in which the dwelling unit is located. The amount of
the bond shall be the total amount of the security deposits which the
landlord holds on behalf of the tenants or $50,000.00, whichever is
less. The bond shall be executed by the landlord as principal and a
surety company authorized and licensed to do business in this state as
surety. The bond shall be conditioned upon the faithful compliance of the
landlord with Code Section 44-7-34 and the return of the security
deposits in the event of the bankruptcy of the landlord or foreclosure of
the premises and shall run to the benefit of any tenant injured by the
landlord's violation of Code Section 44-7-34.
(b) The surety may withdraw from the bond by giving 30 days' written
notice by registered or certified mail or statutory overnight delivery to
the clerk of the superior court in the county in which the principal's
dwelling unit is located, provided that such withdrawal shall not release
the surety from any liability existing under the bond at the time of the
effective date of the withdrawal.
(c) The clerk of the superior court shall receive a fee of $5.00 for
filing and recording the surety bond and shall also receive a fee of
$5.00 for canceling the surety bond. The clerk of the superior court
shall not be held personally liable should the surety bond prove to be
invalid.
44-7-33. (a) Prior to tendering a security deposit, the tenant shall be....
(a) Prior to tendering a security deposit, the tenant shall be
presented with a comprehensive list of any existing damage to the
premises, which list shall be for the tenant's permanent retention. The
tenant shall have the right to inspect the premises to ascertain the
accuracy of the list prior to taking occupancy. The landlord and the
tenant shall sign the list and this shall be conclusive evidence of the
accuracy of the list but shall not be conclusive as to latent defects. If
the tenant refuses to sign the list, the tenant shall state specifically
in writing the items on the list to which he dissents and shall sign such
statement of dissent.
(b) Within three business days after the date of the termination of
occupancy, the landlord or his agent shall inspect the premises and
compile a comprehensive list of any damage done to the premises which is
the basis for any charge against the security deposit and the estimated
dollar value of such damage. The tenant shall have the right to inspect
the premises within five business days after the termination of the
occupancy in order to ascertain the accuracy of the list. The landlord
and the tenant shall sign the list, and this shall be conclusive evidence
of the accuracy of the list. If the tenant refuses to sign the list, he
shall state specifically in writing the items on the list to which he
dissents and shall sign such statement of dissent. If the tenant
terminates occupancy without notifying the landlord, the landlord may
make a final inspection within a reasonable time after discovering the
termination of occupancy.
(c) A tenant who disputes the accuracy of the final damage list given
pursuant to subsection (b) of this Code section may bring an action in any
court of competent jurisdiction in this state to recover the portion of
the security deposit which the tenant believes to be wrongfully withheld
for damages to the premises. The tenant's claims shall be limited to
those items to which the tenant specifically dissented in accordance with
this Code section. If the tenant fails to sign a list or to dissent
specifically in accordance with this Code section, the tenant shall not be
entitled to recover the security deposit or any other damages under Code
Section 44-7-35, provided that the lists required under this Code section
contain written notice of the tenant's duty to sign or to dissent to the
list.
44-7-34. (a) Except as otherwise provided in this article, within one
month....
(a) Except as otherwise provided in this article, within one month
after the termination of the residential lease or the surrender and
acceptance of the premises, whichever occurs last, a landlord shall
return to the tenant the full security deposit which was deposited with
the landlord by the tenant. No security deposit shall be retained to
cover ordinary wear and tear which occurred as a result of the use of the
premises for the purposes for which the premises were intended, provided
that there was no negligence, carelessness, accident, or abuse of the
premises by the tenant or members of his household or their invitees or
guests. In the event that actual cause exists for retaining any portion
of the security deposit, the landlord shall provide the tenant with a
written statement listing the exact reasons for the retention thereof. If
the reason for retention is based on damages to the premises, such
damages shall be listed as provided in Code Section 44-7-33. When the
statement is delivered, it shall be accompanied by a payment of the
difference between any sum deposited and the amount retained. The
landlord shall be deemed to have complied with this Code section by
mailing the statement and any payment required to the last known address
of the tenant via first class mail. If the letter containing the payment
is returned to the landlord undelivered and if the landlord is unable to
locate the tenant after reasonable effort, the payment shall become the
property of the landlord 90 days after the date the payment was mailed.
Nothing in this Code section shall preclude the landlord from retaining
the security deposit for nonpayment of rent or of fees for late payment,
for abandonment of the premises, for nonpayment of utility charges, for
repair work or cleaning contracted for by the tenant with third parties,
for unpaid pet fees, or for actual damages caused by the tenant's
breach, provided the landlord attempts to mitigate the actual damages.
(b) In any court action in which there is a determination that neither
the landlord nor the tenant is entitled to all or a portion of a security
deposit under this article, the judge or the jury, as the case may be,
shall determine what would be an equitable disposition of the security
deposit; and the judge shall order the security deposit paid in
accordance with such disposition.
44-7-35. (a) A landlord shall not be entitled to retain any portion of
a....
(a) A landlord shall not be entitled to retain any portion of a
security deposit if the security deposit was not deposited in an
escrow account in accordance with Code Section 44-7-31 or a surety
bond was not posted in accordance with Code Section 44-7-32 and if
the initial and final damage lists required by Code Section 44-7-33
are not made and provided to the tenant.
(b) The failure of a landlord to provide each of the written statements
within the time periods specified in Code Sections 44-7-33 and 44-7-34
shall work a forfeiture of all his rights to withhold any portion of the
security deposit or to bring an action against the tenant for damages to
the premises.
(c) Any landlord who fails to return any part of a security deposit
which is required to be returned to a tenant pursuant to this article
shall be liable to the tenant in the amount of three times the sum
improperly withheld plus reasonable attorney's fees; provided, however,
that the landlord shall be liable only for the sum erroneously withheld
if the landlord shows by the preponderance of the evidence that the
withholding was not intentional and resulted from a bona fide error which
occurred in spite of the existence of procedures reasonably designed to
avoid such errors.
44-7-36. Code Sections 44-7-31, 44-7-32, 44-7-33, and 44-7-35 shall not
apply....
Code Sections 44-7-31, 44-7-32, 44-7-33, and 44-7-35 shall not apply to
rental units which are owned by a natural person if such natural person,
his or her spouse, and his or her minor children collectively own ten or
fewer rental units; provided, however, that this exemption does not apply
to units for which management, including rent collection, is performed by
third persons, natural or otherwise, for a fee.
