A recent change in Missouri law requires landlords to make changes to the way they handle security deposits. As a result, Missouri landlords need to understand the requirements for security deposits and compliance with Missouri law. Section 535.300 RSMo., provides the specifics on security deposits. Therefore, landlords should be aware of the statute and its requirements.

1. Maximum Security Deposit Cannot be More than Two Months’ Rent
A  security deposit mus be less than two months’ rent.

2. Are Security Deposits Nonrefundable?
No. Deposits belong to the tenant under Missouri law. As a result, a landlord must return security deposits within 30 days after the end of the lease, less allowable deductions.

3. When Can Security Deposits be Kept?
A Missouri landlord may keep some or all of the security deposit:

(a) To remedy a tenant’s default in payment of rent, in accordance with the lease agreement;
(b) To cover damages in excess of ordinary wear and tear; or
(c) To compensate the landlord for actual damages sustained as a result of the tenant’s failure to give adequate notice of termination.

If a Missouri landlord wrongfully withholds any or all of a tenant’s security deposit, the tenant shall recover up to two times the amount wrongfully withheld in court.

4. Landlord’s Must Return Security Deposits in 30 Days
A landlord has 30 days after the termination of a tenancy to either return the full security deposit or return part of the security deposit. If returning only part of the security deposit, the landlord also must send a written itemized list of any deductions to the deposit.

The landlord must mail these items to the last known address of the tenant.

5. Do Deposits Have to Earn Interest in Missouri?
There is no requirement that a security deposit earn interest. If it does, however, the statute is clear that the interest belongs to the landlord. Missouri law now requires the landlord, however, to keep the security deposits in a separate bank account. The landlord cannot commingle the security deposits with the landlord’s other funds. This means that interest earned must be drawn out of the account immediately upon receipt.

6. Walk-Through Inspections Are Required After the Tenant Moves Out
The landlord especially must perform a walk-through inspection after the tenant moves out. This inspection determines the portion of the security deposit, if any, returned to the tenant. The statute requires the walk-through to be held at a “reasonable time.”

How Can We Help with Security Deposits?

The statute requires the deposits be held “in a trust established by the landlord and deposited in a bank, credit union or depository institution in the name of the trustee.”  This implies that a landlord create a trust document. Our attorneys can help prepare a trust document for Missouri landlords. Contact us or call us at (573)686-2459. We are here for you when you need us.