OLR Bill Analysis

HB 5437 (as amended by House "A")*

AN ACT CONCERNING SECURITY DEPOSITS.

SUMMARY:

This bill eliminates the requirement that a landlord pay a minimum 1. 5% interest rate on residential security deposits. Current law requires a landlord to pay at least the average savings deposit interest rate paid by insured commercial banks published in the Federal Reserve Board Bulletin in November of the prior year (i. e. , deposit index), but not less than 1. 5%. (The 2010 deposit index rate is 0. 28%. ) The bill retains this method for calculating the security deposit interest rate.

The bill also makes technical changes.

*House Amendment “A” removes the provision allowing a tenant to provide his or her forwarding address to a landlord by email and changes the bill's effective date from October 1, 2011 to January 1, 2012.

EFFECTIVE DATE: January 1, 2012

COMMITTEE ACTION

Insurance and Real Estate Committee

Joint Favorable

Yea

19

Nay

0

(02/10/2011)

Housing Committee

Joint Favorable

Yea

9

Nay

0

(03/22/2011)