Kansas landlords have a duty to comply with the security deposit laws that govern the state and understand their responsibilities.
Quick Facts for Kansas
- Maximum Amount: 1 month’s rent if unit is unfurnished; 1 1/2 months’ rent if furnished
- Duration for Return: For partial refund, 14 days; 30 days for full refund
- Penalty for Wrongful Withholding: Tenant gets full security deposit & 1 1/2x amount withheld
- Applying Security Deposit as Last Month’s Rent: Not allowed
Purpose of a Security Deposit
The purpose of a security deposit is to serve as a safety net for landlords if they suffer financial losses that may have been caused by damages to the rental property, unpaid rent or other breaches of the lease agreement. A security deposit ensures that a landlord is compensated for losses and may also incentivizes tenants to adhere to their lease obligations in order to have their security deposit returned at the end of the lease term.
Allowable Security Deposit Charge in Kansas
Kansas landlords can charge one month’s rent for a security deposit for an unfurnished rental unit. For furnished rental agreement, landlords can charge 1 1/2 months’ rent. If the rental agreement allows the tenant to keep or maintain pets in the rental unit, landlords are allowed to charge tenants 1/2 of one month’s rent. A municipal housing authority which is entirely or partially subsidized by aid from the federal government may demand and receive a security deposit in accordance with a schedule created by the housing authority, which is required to provide a deferred payment plan that will allow the tenant to pay the deposit in reasonable increments over a period of time (KSA 58-2550(a)).
Security Deposit Rules & Regulations in Kansas
- Security Deposit Interest: Kansas landlords are not required to pay interest on security deposits; however, they can choose to do so, but should agree on a fixed percentage rate at the time of payment and that the interest be paid at the time of move-out.
- Allowable Deductions from Security Deposit: In Kansas, landlords are allowed to make deductions from a tenant’s security deposit to cover:
- Unpaid rent
- Damage in excess of normal wear and tear
- Other damages or breaches to the lease agreement
- Applying Security Deposit as Last Month’s Rent: A security deposit is not intended to be used as the tenant’s last month’s rent, but a rental agreement could provide for such a provision. If it’s not explicitly stated in the rental agreement, Kansas doesn’t allow a tenant to apply or deduct any portion of the security deposit from the last month’s rent or use the security deposit at any time to cover last month’s rent. If a tenant fails to pay the last month’s rent, the security deposit will be forfeited and the landlord has the right to recover unpaid rent as if the rent was not deducted from the deposit (KSA 58-2550(d)).
- How to Get a Full Refund: At the end of the tenancy, a full security deposit can be returned to the tenant if there is no damage to the rental property, rent is paid in full and all charges in the rental agreement are covered.
- New Property Owner’s Resposibility: If the property changes ownership during the period of a tenant’s rental agreement, the new owner becomes responsible for the security deposit and returning it to the tenant when the lease ends, all or in part. The current landlord can refund the security deposit if the transaction occurs at the end of the tenancy.
Returning Security Deposits in Kansas
When a lease is terminated, a Kansas landlord is required to provide the tenant with a written notice if he/she plans on making any deductions from the security deposit. The notice should include an itemized list highlighting the specific deductions that will be made from the deposit and the amount due for each deduction.
- Time frame: Kansas landlords need to take note of two time frames when returning a tenant’s security deposit.
- 14 Days: If the landlord plans on withholding any portion of the security deposit for expenses, damages, or other allowable charges related to the rental agreement, other than rent, the landlord is required to return the balance of the security deposit to the tenant within 14 days after the amount of such expenses, damages or other charges are determined.
- 30 Days: Landlords have 30 days after the termination of the tenancy, delivery of possession and demand by the tenant, in any case, to return the remaining portion of the tenant’s security deposit. If the tenant does not demand a refund of the security deposit within 30 days, the landlord is required to mail the remaining portion of the security deposit to the tenant’s last known address (KSA 58-2550(b)).
- Wrongful Withholding: If a Kansas landlord wrongfully withholds all or a portion of a tenant’s security deposit, the tenant may be awarded the portion of the security deposit due, plus damages of up to one and a half times the amount wrongfully withheld, along with reasonable court costs and attorney fees (KSA 58-2550(c)).
Security Deposits and Tax Filing in Kansas
A security deposit can either be held to cover losses suffered by the landlord or refunded to the tenant, all or in part. How security deposits are treated for tax purposes depends on whether or not a landlord retains or provide the tenant with a refund when the lease is terminated.
- Accounting for Security Deposits: Security deposits are treated as either assets or liabilities when filing taxes. It is not automatically rental income when first received. Tenants shouldn’t deduct security deposits as expenses when filing their taxes and landlords shouldn’t declare them as income when in escrow intended to be returned to the tenant at the end of the tenancy. Security deposits are not income until they become as such.
- Security Deposit Write-off: Usually, landlords cannot deduct security deposits when filing taxes as expenses before they are used for one purpose or another. If a landlord withholds part or all of the security deposit for unpaid rent, then that amount should be included as income for that year when filing taxes. Forfeited deposits should be declared as income on a landlord’s tax return. A deposit is taxable income only if and when a landlord has no obligation to refund the tenant.
“Normal Wear and Tear” vs. Damage in Kansas
- “Normal wear and tear” is deterioration that occurs as a result of use for which the rental unit is intended and without negligence, carelessness, accident, or misuse or abuse of the premises or contents by the tenant or members of his household, or their invitees or guests. It can include minor issues, such as gently worn carpets, loose door handles, fading wall paint and flooring, stained bath fixtures, lightly scratched glass and dirty grout that occur naturally as a result of the tenant using the property as it’s designed to be used.
- “Damage” refers to destruction to the rental unit that occurs because of abuse or negligence by a tenant during the course of the tenancy and can affect usefulness, value, normal function of the rental unit. Pet damage (heavily stained and ripped carpet), broken tiles, hole in the wall, broken windows and missing fixtures are all examples of damage.
The Law on Security Deposits in Kansas
Kansas security deposit law is found in Kansas Statutes Annotated (K.S.A)§§ 58-2550.
Tips for Kansas Landlords on the Right Practices for Security Deposits
- Charge one month’s rent for a security deposit for an unfurnished rental unit and for furnished rental agreement, 1 1/2 months’ rent.
- When making deductions from a security deposit, return the balance of the security deposit to the tenant within 14 days, with an itemized list of deductions.
- In any event, 30 days must not pass before returning a tenant’s security deposit.
- Withhold security deposits for unpaid rent, damages and breach of lease agreement.
- Seek damages in legal proceedings if the security deposit is insufficient to cover the losses caused by the tenant.
Landlords have a responsibility to properly store and handle tenants’ security deposit as the law requires. Make sure to refer to the Kansas Statutes Annotated (K.S.A)§§ 58-2550 for more on security deposits.