SB 56: "An Act relating to security deposits, prepaid rent, and interest in landlord-tenant transactions."
00 SENATE BILL NO. 56 01 "An Act relating to security deposits, prepaid rent, and interest in landlord-tenant 02 transactions." 03 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 04 * Section 1. AS 34.03.070(b) is amended to read: 05 (b) Upon termination of the tenancy, property or money held by the landlord 06 as prepaid rent or as a security deposit, along with the interest owing to the tenant 07 under (c) of this section, may be applied to the payment of accrued rent and the 08 amount of damages that the landlord has suffered by reason of the tenant's 09 noncompliance with AS 34.03.120. The accrued rent and damages shall [MUST] be 10 itemized by the landlord in a written notice mailed to the tenant's last known address 11 within the time limit prescribed by (g) of this section, together with the amount due 12 the tenant. In this subsection, "damages" 13 (1) means deterioration of the premises and, if applicable, of the 14 contents of the premises;
01 (2) does not include deterioration 02 (A) that is the result of the tenant's use of the premises by 03 normal, nonabusive living; 04 (B) caused by the landlord's failure to prepare for expected 05 conditions or by the landlord's failure to comply with an obligation of the 06 landlord imposed by this chapter. 07 * Sec. 2. AS 34.03.070(c) is amended to read: 08 (c) All money paid to the landlord by the tenant as prepaid rent or as a security 09 deposit in a lease or rental agreement shall be promptly deposited by the landlord, 10 wherever practicable, in an interest-bearing [A] trust account in a bank or [,] savings 11 and loan association, or with a licensed escrow agent, who shall hold the money in 12 an interest-bearing trust account in a bank or savings and loan association, and 13 the landlord shall provide to the tenant the terms and conditions under which the 14 prepaid rent, [OR] security deposit, and interest, or portions of them may be withheld 15 by the landlord. Nothing [; NOTHING] in this chapter prohibits the landlord from 16 commingling prepaid rents and security deposits in a single financial account. 17 However, subject to a deduction from the interest under (h) of this section, the 18 landlord is liable to a tenant for the greater of the 19 (1) actual interest that is paid on the account and that is 20 attributable to the tenant's prepaid rent and security deposit; or 21 (2) interest on the tenant's prepaid rent and security deposit at the 22 rate of one percentage point above the annual rate charged member banks for 23 advances by the 12th Federal Reserve District on the day on which the rental 24 agreement was entered into. 25 * Sec. 3. AS 34.03.070 is amended by adding a new subsection to read: 26 (h) A landlord may deduct from the interest due to a tenant under (c) of this 27 section 28 (1) the entire amount of the actual charge made by the bank, savings 29 and loan association, or escrow agent for establishing or maintaining the account, if a 30 separate account is established for the tenant; or 31 (2) a proportionate part of the actual charge made by the bank, savings
01 and loan association, or escrow agent for establishing or maintaining the account, if 02 the prepaid rent and security deposits of more than one tenant are commingled in one 03 account under (c) of this section; in this paragraph, "proportionate part" means a part 04 that represents the proportion that the prepaid rent and security deposit of the tenant 05 bears to the prepaid rent and security deposits of the other tenants in the account. 06 * Sec. 4. AS 34.03.160(d) is amended to read: 07 (d) If the rental agreement is terminated, the landlord shall return all prepaid 08 rent, [OR] security deposits, and interest recoverable by the tenant under 09 AS 34.03.070. 10 * Sec. 5. AS 34.03.200(b) is amended to read: 11 (b) If the rental agreement is terminated, the landlord shall return all prepaid 12 rent, [AND] security deposits, and interest recoverable under AS 34.03.070. 13 Accounting for rent in the event of termination or apportionment shall occur as of the 14 date of the casualty. 15 * Sec. 6. AS 34.03.210 is amended to read: 16 Sec. 34.03.210. Tenant's remedies for landlord's unlawful ouster, 17 exclusion, or diminution of service. If the landlord unlawfully removes or excludes 18 the tenant from the premises or wilfully diminishes services to the tenant by 19 interrupting or causing the interruption of electric, gas, water, sanitary, or other 20 essential service to the tenant, the tenant may recover possession or terminate the 21 rental agreement and, in either case, recover an amount not to exceed one and one-half 22 times the actual damages. If the rental agreement is terminated, the landlord shall 23 return all prepaid rent, [AND] security deposits, and interest recoverable by the 24 tenant under AS 34.03.070. 25 * Sec. 7. AS 34.80.030 is amended to read: 26 Sec. 34.80.030. Interest on escrow money. Notwithstanding any other 27 provision of law, except, when applicable, AS 34.03.070(c), interest may not be 28 collected or paid by a settlement agent on money held for an escrow transaction unless 29 authorized in writing by the parties to the escrow transaction, including the settlement 30 agent.