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Refund of security deposits in 10 days
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Posted on May 07 2005
Concerned businesses are now mandated to refund security deposits within 10 days after the property is returned, as embodied in a newly enacted legislation.
Gov. Juan N. Babauta signed House Bill 14-81, authored by Rep. Arnold I. Palacios, which requires the issuance of refunds for security deposits “in a timely manner” or 10 days after the rented/leased property is returned.
“This type of consumer protection legislation is good for the people of the Commonwealth as well as for responsible businesses,” said Babauta in his letter to the Legislature on May 2.
In his bill, Palacios said that “certain businesses take an unusually long time to issue a refund to depositors.”
This practice, the lawmaker said, deprives the depositor the right to the use of his or her money and unjustly benefits the business establishment through accrued interest derived from withholding funds from people.
The law applies to businesses that require security deposits prior to the leasing or renting of property.
A business that violates the law will be with fined up to $1,000 per offense.
Babauta said the measure shall not affect the return of deposits that were made or entered in a contract prior to the date of the enactment of the law.
