Is Asking for 1st Month's Rent & Last Month's Rent Plus Security Illegal in PA?

Is Asking for 1st Month's Rent & Last Month's Rent Plus Security Illegal in PA?

Rental Property Investor · Philadelphia, PA · Member since 2020 · 26 posts · 7 votes

PA Landlords,

Someone just told me that it's illegal to ask for first month's rent, last month's rent, and one month's security deposit in PA?

I understand that...

"Pennsylvania law limits the amount of security deposit a landlord can demand. During the first year of the lease, the security deposit cannot be more than two months’ rent. A landlord might ask the tenant to pay a security deposit plus “the last month”. Regardless of what the landlord may call it, this “last month’s rent” payment is still part of the two-month maximum security deposit for the first year."
--Housing Equity Center

This person maintains that I can't ask for "3 months of rent" up front. But there seems to be a semantic issue here that doesn't quite make sense to me. The first month's rent has to be paid before move-in regardless, so am I really asking for "three months of rent," or am I asking for the "first month's rent and "two months of security" (including "security deposit" and " last month's rent") to move in?

And how does it work if I need a "double deposit" for a risky tenant? Does this mean I can't then ask for "last month's rent"? What about even asking for "first month's rent plus double security deposit"?

What are other PA landlords doing?



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Nathan MillerPro Member
Property Manager · Grants Pass, OR · Member since 2009 · 429 posts · 202 votes
3y

Each state is going to be different, but based on the language you pasted (if it's accurate and current), it sounds fine to ask for 1st months rent + 2 month rent as a security deposit.  Just be careful not to call any part of it "last month's rent" or you risk earning yourself one extra month of lost rent and lost time if they stop paying.  If it's all a security deposit, you can often apply security to unpaid rent.

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  • Nathan GesnerBusiness Member
    Moderator
    Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
    3y

    Here's a good resource: https://www.nolo.com/legal-encyclopedia/overview-landlord-te...

    I recommend you buy "Every Landlord's Legal Guide" by NOLO. Written by attorney investors, it's full of practical advice pertaining to management of investment property, has sample forms that can be edited, and - most importantly - they tell you what your primary state laws are and where you can read them. It's updated every year and is the best $40 you'll spend as a Landlord.

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  • Nathan MillerPro Member
    Property Manager · Grants Pass, OR · Member since 2009 · 429 posts · 202 votes
    3y

    Each state is going to be different, but based on the language you pasted (if it's accurate and current), it sounds fine to ask for 1st months rent + 2 month rent as a security deposit.  Just be careful not to call any part of it "last month's rent" or you risk earning yourself one extra month of lost rent and lost time if they stop paying.  If it's all a security deposit, you can often apply security to unpaid rent.

  • Russell BrazilBusiness Member
    Moderator
    Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
    3y

    Im Pretty sure last months rent needs to be treated as a deposit until the time that it converts to rent, then all laws of deposits become applicable to it. Note, after a tenant completes 1 year, if you have 2 months of a deposit you must return 1 month of that deposit back to the tenant.

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