SB 943 — AN ACT CONCERNING THE RETURN OF SECURITY DEPOSITS UPON THE TERMINATION OF TENANCY.

Senate General Assembly RaisedFile Bill No.

943144 January Session, 2023 LCOSubstitute Senate Bill No.

3087943 ReferredSenate, toMarch 21, 2023 The Committee on HOUSINGHousing Introducedreported by:through SEN.

(HSG)MOORE ANof ACTthe CONCERNING22nd THEDist., RETURNChairperson OFof SECURITYthe DEPOSITSCommittee UPONon THEthe TERMINATIONpart OFof TENANCY.the Senate, that the substitute bill ought to pass.

AN ACT CONCERNING THE RETURN OF SECURITY DEPOSITS UPON THE TERMINATION OF TENANCY.

Subsection (d) of section 47a-21 of the general statutes is repealed andthefollowing issubstitutedis substituted inlieuthereof(EffectiveOctober 1, 2023):

If the landlord at the time of termination of a tenancy is a rent receiver, such rent receiver shall return security deposits in accordance with the provisionssSB943 of/ subdivisionFile (3)No. of this subsection.

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3087144 1provisions of 4subdivision Raised(3) Bill No.943 (2)Uponterminationofatenancy,anytenantmaynotifythelandlord in writing of suchthis tenant'ssubsection. forwarding address.

Not(2)Uponterminationofatenancy,anytenantmaynotify laterthelandlord thanin [thirty]writing ten days after termination of a tenancy or fifteen days after receiving written notification of such tenant's forwarding address,address. whichever is later, each landlord other than a rent receiver shall deliver to the tenant or former tenant at such forwarding address either (A) the full amount of the security deposit paid by such tenant plus accrued interest, or (B) thebalance of such security deposit andaccruedinterest after deduction for any damages suffered by such landlord by reason of such tenant's failure to comply with such tenant's obligations, together with a written statement itemizing the nature and amount of such damages.

Not later than [thirty] fifteen business days after termination of a tenancy or fifteen days after receiving written notification of such tenant's forwarding address, whichever is later, each landlord other than a rent receiver shall deliver to the tenant or former tenant at such forwarding address either (A) the full amount of the security deposit paid by such tenant plus accrued interest, or (B) the balance of such security deposit and accrued interest after deduction for any damages suffered by such landlord by reason of such tenant's failure to comply with such tenant's obligations, together with a written statement itemizing the nature and amount of such damages.

(i) On and after July 1, 1993, each landlord other than a landlord of a residential unit in any building owned or controlled by any educational institutionsSB943 and/ usedFile by such institution for the purpose of housing LCO No.

3087144 2 ofsSB943 4File Raised Bill No.

943144 institution and used by such institution for the purpose of housing students of such institution and their families, and each landlord or owner of a mobile manufactured home or of a mobile manufactured home space or lot or park, as such terms are defined in subdivisions (1), (2) and (3) of section 21-64, shall pay interest on each security deposit received by such landlord at a rate of not less than the average rate paid, as of December 30, 1992, on savings deposits by insured commercial banksas published intheFederalReserve BoardBulletinroundedto the nearest one-tenth of one percentage point, except in no event shall the rate be less than one and one-half per cent.

If the tenancy is terminated before the anniversary date of such tenancy, or if the landlord or owner returns all or part of a security deposit prior to termination of the tenancy, the landlord or owner shall pay the accrued interest to the tenant or resident not later than [thirty] tenfifteen business days after such termination or return.

2 October 1, 2023 47a-21(i) StatementHSG ofJoint Purpose:Favorable Subst.

TosSB943 require/ landlordsFile toNo. return any security deposit due to a tenant not later than ten days after the termination of tenancy.

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3087144 3The offollowing 4Fiscal RaisedImpact Statement and Bill No.Analysis are prepared for the benefit of the members of the General Assembly, solely for purposes of information, summarization and explanation and do not represent the intent of the General Assembly or either chamber thereof for any purpose.

943In [Proposedgeneral, deletionsfiscal impacts are enclosedbased inupon brackets.a variety of informational sources, including the analyst’s professional knowledge.

ProposedWhenever additionsapplicable, areagency indicateddata byis underline,consulted exceptas thatpart whenof the entireanalysis, texthowever offinal aproducts billdo ornot resolutionnecessarily orreflect aan sectionassessment offrom aany billspecific ordepartment. resolution is new, it is not underlined.] LCO No.

3087OFA 4Fiscal ofNote 4State Impact:

Agency Affected Fund-Effect FY 24 $ FY 25 $ Banking Dept.

BF - Potential See Below See Below Revenue Gain Note:

BF=Banking Fund Municipal Impact:

None Explanation The bill shortens the time period by which landlords must return a tenant'ssecuritydepositandinterestondeposits,resultinginapotential revenue gain to the Banking Fund, if the reduced time period results in increased fines from violations.

Under current law, landlords are subject to fines of up to $250 per offense for failure to return a security deposit and up to $100 per offense for failure to pay accrued interest.

The Department of Banking has generally imposed fines for such violations at a rate fewer than once per year.

The Out Years The annualized ongoing fiscal impact identified above would continue into the future subject to the number of violations per year.

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144 4 sSB943 File No.

144 OLR Bill Analysis sSB 943 AN ACT CONCERNING THE RETURN OF SECURITY DEPOSITS UPON THE TERMINATION OF TENANCY.

SUMMARY This bill generally shortens the deadline for landlords to return a tenant’s security deposit and interest on deposits under certain circumstances.

Under current law, after a tenancy terminates, landlords must return the tenant’s security deposit, or the deposit balance if any, plus accrued interest, within the greater of (1) 30 days or (2) 15 days after receiving written notification of the tenant’s forwarding address.

The bill reduces this 30-day deadline to 15 business days.

Under existing law and unchanged by the bill, any landlord that violates this requirement is liable for twice the security deposit amount (or, if the landlord fails only to deliver the accrued interest, the greater of twice the accrued interest or $10).

Thebillalsomakesa similarchangetoastatutoryprovisionrequiring landlords to pay interest annually on tenants’ security deposits.

Under current law, a landlordmust pay their tenant theaccrued interest within days after (1) the tenancy is terminated before its anniversary date or (2) he or she returns all or part of a security deposit before the tenancy’s anniversary date.

The bill reduces this deadline to 15 business days.

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