SECURITY DEPOSITS AND MOVE IN AND MOVE OUT INSPECTIONS

​Security Deposits in Lease Transactions
 
Georgia law requires that the tenant, prior to tendering a security deposit, be presented with a comprehensive list of any existing damages to the premises. (F910, Move-In/Move-Out Condition Report)
O.C.G.A. 44-7-33. Per Seth Weissman in The Red Book on Real Estate Contracts in Georgia, some landlords and their agents try to comply with this section of the law by characterizing the security deposit as a refundable lease administration or application fee that is then converted into a security deposit upon the completion of the move-in inspection. Whether temporarily giving the security deposit a different name alters its character is unclear and has yet to be ruled on by an appellate court. 

Security Deposits Held in Trust
If RMAA is holding a security deposit, the funds must be deposited into the RMAA trust account. This is the case, even if the property being leased is owned by the licensee. However, if the security deposit is being held by the landlord, it does not have to be held in a trust account if the landlord is exempt from the requirement.  Exempt landlords are those who own 10 or fewer properties (either by themselves or in the name of their spouse or minor children) and who are natural persons and where the property is not being managed by a third party.2122. OCGA 43040-25
 
The funds must be held in a trust account if the landlord owns more than 10 properties (either by themselves or in the name of their spouse or minor children) or the landlord is not a natural person (an LLC) or where the property is being managed by a third party.
 
Return of the Security Deposit to the Tenant
The security deposit must be returned to the tenant within one month after the later of either (i) termination of the residential lease or (ii) the surrender and acceptance of the premises.
 
If the security deposit or a portion thereof is retained to cover damage to the premises, the damages must be listed in the move-out inspection. Of course, the security deposit can also be retained for nonpayment of rent, nonpayment of utility charges, repair work, cleaning, unpaid pet fees, or other fees and charges relating to the tenant’s breach of the lease.
 
The portion of the security deposit being returned to the tenant along with the statement explaining any deductions to the security deposit may be mailed to the last known address of the tenant via first-class mail. If the letter is returned to the landlord undelivered and the landlord is unable to locate the tenant after reasonable effort, the payment becomes the property of the landlord 90 days from the date that the payment was mailed.