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Connecticut Laws for Collecting a Security Deposit

The Connecticut General Statutes Chapter 831 Section 47a-21 governs how a landlord is to collect and handle a tenant’s security deposit for residential rental property in the following manner:

Deposit into Escrow Account

(1) Each landlord shall immediately deposit the entire amount of any security deposit received by such landlord from each tenant into one or more escrow accounts established or maintained in a financial institution for the benefit of each tenant. Each landlord shall maintain each such account as escrow agent and shall not withdraw funds from such account except as provided in subdivision (2) of this subsection.

Withdrawing Funds

(2) The escrow agent may withdraw funds from an escrow account to:

  • (A) Disburse the amount of any security deposit and accrued interest due to a tenant pursuant to subsection (d) of this section;
  • (B) disburse interest to a tenant pursuant to subsection (i) of this section;
  • (C) make a transfer of the entire amount of certain security deposits pursuant to subdivision (3) of this subsection;
  • (D) retain interest credited to the account in excess of the amount of interest payable to the tenant under subsection (i) of this section;
  • (E) retain all or any part of a security deposit and accrued interest after termination of tenancy equal to the damages suffered by the landlord by reason of the tenant’s failure to comply with such tenant’s obligations;
  • (F) disburse all or any part of the security deposit to a tenant at any time during tenancy; or
  • (G) transfer such funds to another financial institution or escrow account, provided such funds remain continuously in an escrow account.

Successor to Landlord

(3)(A) Whenever any real estate is voluntarily or involuntarily transferred from a landlord, other than a receiver, to a successor, including a receiver, such landlord shall withdraw from the escrow account and deliver to the successor the entire amount of security deposits paid by tenants of the property being transferred, plus any interest accrued pursuant to subsection (i) of this section. If at the time of transfer of such real estate the funds in such account are commingled with security deposits paid by tenants in real estate not being transferred to such successor, and if at such time the funds in such account are less than the amount of security deposits paid by all tenants whose security deposits are contained in such account, such landlord shall deliver to such successor a pro rata share of security deposits paid by tenants of the real estate being transferred to such successor.

Court Appointed Receiver to Successor

(B) Whenever any real estate is transferred from a receiver to a successor, such receiver shall dispose of the escrow accounts as ordered by the court which appointed such receiver. The order of such court shall provide for the priority of the present and future rights of tenants to security deposits paid by them over the rights of any secured or unsecured creditor of any person and shall provide that the funds in such account shall be delivered to the successor of such receiver for immediate deposit in an escrow account for tenants who paid security deposits.

Notice to Tenant Required

(4) (A) The landlord shall provide each tenant with a written notice stating the amount held for the benefit of the tenant and the name and address of the financial institution at which the tenant’s security deposit is being held not later than thirty days after the landlord receives a security deposit from the tenant or the tenant’s previous landlord or transfers the security deposit to another financial institution or escrow account.

Commissioner Requests

(B) If the commissioner makes a written request to the landlord for any information related to a tenant’s security deposit, including the name of each financial institution in which any escrow account is maintained and the account number of each escrow account, the landlord shall provide such information to the commissioner not later than seven days after the request is made.

Penalty for Failing to Comply

Any person who knowingly and wilfully violates the provisions of these laws on or after October 1, 1979, shall be subject to a fine of not more than five hundred dollars or imprisonment of not more than thirty days or both for each offense. It shall be an affirmative defense under the provisions of this subdivision that at the time of the offense, such person leased residential real property to fewer than four tenants who paid a security deposit.

Conn. Gen. Stat. Title 47a Ch 831 Sec 47a-21.

See also Connecticut Laws for Returning a Security Deposit.

Return to Connecticut Landlord-Tenant Laws.