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How to Break a Lease Escrow Account

When a tenant enters into a lease, he is often required to provide a security deposit. This down payment is held by the landlord to pay for future repairs to fix damage in excess of normal wear and tear caused by the tenant. The amount left over is returned to the tenant when the lease ends. The District of Columbia, Oklahoma and Pennsylvania require landlords to keep security deposits in an escrow account. The allows the tenant to deposit money for the landlord in a way that ensures the appropriate amount is returned at the end of the lease. If you want to break a lease escrow account, the lease must end first.

Instructions

    • 1

      Review your lease for the circumstances that would allow you to terminate the rental agreement. A lease is the formal contract that defines the length and terms of the rental agreement between you and your landlord. Therefore, the lease may contain provisions that specify when the lease, and ultimately the lease escrow account holding the security deposit, may be terminated.

    • 2

      Determine if your landlord violated any common-law warranties regarding use of the property. When a tenant leases property, he is guaranteed that it will be habitable and that he will be able to enjoy it quietly. There must be a relatively egregious condition, such as an infestation or blaring music being played consistently at night, for one of these warranties to be breached. Most states require the tenant to give the landlord an opportunity to remedy the problem before ending the lease. If the landlord fails to remedy the condition in a reasonable amount of time, you can terminate the lease.

    • 3

      Check state law and local ordinances for when a landlord must surrender a security deposit and how much he must return. Beyond the standard common-law tenant guarantees, state and local ordinances may have specific rules on refunding security deposits. Chicago requires a landlord to return a security deposit plus any interest accumulated, minus any unpaid rent and damages, within 45 days of the tenant moving out.

    • 4

      Claim the security funds owed from the escrow account. Presuming the lease was legally terminated and the tenant didn't owe any back rent, the tenant should have the security deposit returned, minus any amount used to repair excessive damage. "Excessive damage" isn't well defined. Consult with an attorney to determine whether the damage meets the "excessive damage" standard established in the local courts.

Tips & Warnings

  • When considering breaking a lease escrow account, consult with a licensed attorney in the area to ensure that any action you take complies with local ordinances and state law. Breaking a lease could harm your credit score.

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