Property Management
Pennsylvania's landlord-tenant law requires that a security deposit held in an interest-bearing account for more than 2 years must have the accrued interest:
ATransferred to the state's general fund
BPaid to the tenant annually or at the end of each lease year after the first 2 years✓ Correct
CRetained by the landlord as additional compensation
DApplied to reduce the following month's rent
Explanation
After the tenant has been in occupancy for 2 years, Pennsylvania law requires landlords to annually pay or credit the tenant with the interest earned on the security deposit. This ensures tenants benefit from the interest on their own money held over extended tenancy periods.
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Key Terms to Know
Earnest Money
A deposit made by the buyer when submitting a purchase offer, demonstrating serious intent and serving as consideration for the contract.
ContingencyA condition in a purchase contract that must be satisfied before the sale can proceed to closing.
Purchase AgreementA legally binding contract between a buyer and seller that outlines the terms and conditions of a real estate sale.
Option ContractA contract giving the buyer the right, but not the obligation, to purchase a property at a specified price within a specified time period.
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