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Senate kills security deposit bill

February 12, 2003|by LAURA ERNDE

laurae@herald-mail.com

Landlords must continue to pay 4 percent interest on their tenants' security deposits now that a Washington County lawmaker's bill has been killed.

Sen. Donald F. Munson, R-Washington, introduced legislation this year to lower the interest rate because, he said, savings rates are so low right now that landlords are losing money on the security deposits.

Richard Willson, director of the Housing Authority of Washington County, testified in favor of the bill last week.

But the Senate Judicial Proceedings Committee killed the bill.

"I think we felt we shouldn't be chasing interest rates in law. Sometimes they're high. Right now they're low. It's a moving target," said Committee Chairman Brian E. Frosh, D-Montgomery.

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When interest rates were high, the landlords earned money on the security deposits.

The only way to be fair to both tenants and landlords would be tying the rate to a standard fluctuating interest rate, Frosh said.

But real estate industry representatives argued that would be too much of an administrative burden.

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